Latest Update in the SMM Silicon Market

[Next week, oriented silicon prices may fluctuate downward with limited volatility] End-use demand remains weak, with purchasing intentions continuing to be subdued. Most downstream enterprises primarily make just-in-time procurement and have no large-scale restocking plans for now. On the trader side, influenced by cost-side factors and steel mill price adjustments, many attempt to raise prices slightly to sell goods. However, downstream enterprises show low acceptance of higher-priced resources and strong resistance sentiment, leading to actual transaction volumes falling short of expectations. Traders' profit margins also continue to narrow.

[Silicon Metal Prices Fall Below Expectations, Silicon Enterprises Show Weak Willingness to Sell]: This week, the price center of silicon metal was weak, with differentiated sales performance among different suppliers. Since last Friday, silicon metal futures prices have been under pressure and declined. After the futures market fell, trading volume from traders and downstream buyers increased significantly, spot-futures merchants sold smoothly, and the spot-futures price spread strengthened by about 50-100 yuan/mt. Calculated as an absolute price, it weakened noticeably WoW. Most silicon enterprises adopted a wait-and-see approach, either temporarily not offering prices or maintaining original prices, with overall strong sentiment to hold prices firm among silicon enterprises.

December 11 news: The SM2603 contract opened at 5,724 yuan/mt and closed at 5,712 yuan/mt, down 0.49%. The highest price was 5,756 yuan/mt and the lowest was 5,702 yuan/mt. Trading volume was 183,800 lots, and open interest was 290,271 lots. During the daytime session, futures edged higher initially then pulled back, lacking upward momentum. Cost side, the manganese ore market remained firm, with high-grade oxide ore showing notable gains, providing strong cost support for SiMn. Supply side, alloy plants in both northern and southern regions maintained stable operations. Spot SiMn prices in production areas were below most enterprises' cost levels, putting producers under heavy loss pressure. Demand side, a new round of steel mill tenders was gradually unfolding. HBIS Group set its December SiMn price at 5,770 yuan/mt, up 70 yuan from the first inquiry of 5,700 yuan/mt, but down significantly from November's price of 5,820 yuan/mt, leading to negative market sentiment for SiMn. In the short term, spot SiMn prices are expected to remain in the doldrums.

[SMM Silicon-Based PV Morning Conference Minutes] Silicon Metal: In the past two days, silicon metal futures prices have fallen sharply and continuously, with the SI2601 contract closing at 8,340 yuan/mt yesterday, down 335 yuan/mt from the previous day. SMM oxygen-blown #553 silicon in east China was at 9,100-9,300 yuan/mt. As futures prices declined, spot-futures price spread resources followed the downtrend, with some downstream users and traders increasing purchase volumes. Transactions improved, and some spot-futures price spread quotations strengthened by 50-100 yuan/mt. Due to the rapid decline in silicon prices, silicon metal producers adopted a wait-and-see approach, either temporarily suspending quotations or maintaining prices steady from the previous week.

December 9 news: The SM2603 contract opened at 5,722 yuan/mt and closed at 5,732 yuan/mt, up 0.03%, with the highest price at 5,748 yuan/mt and the lowest at 5,678 yuan/mt. Trading volume was 259,100 lots, and open interest stood at 282,351 lots. Futures fluctuated upward today. Cost side, the manganese ore market remained firm, with traders confident in holding prices firm, providing strong cost support for SiMn. Supply side, alloy plants in the north and south maintained stable operations. Spot SiMn prices in production areas were below the cost prices of most enterprises, putting significant pressure on manufacturers' losses. Demand side, a new round of steel mill tenders was gradually unfolding, with HBIS Group's first December SiMn inquiry at 5,700 yuan/mt, compared with the November SiMn price of 5,820 yuan/mt, a significant decline. The market is watching for the final tender pricing. Overall, as the market awaits the new round of steel tender prices, spot SiMn prices are expected to remain in the doldrums in the short term.

December 8: The SM2603 contract opened at 5,750 yuan/mt and closed at 5,736 yuan/mt, down 0.42%. The highest price during the daytime session was 5,766 yuan/mt, and the lowest price was 5,696 yuan/mt. Trading volume was 265,100 lots, and open interest stood at 271,282 lots. Today, futures were under pressure. Cost side, the manganese ore market remained firm, with traders showing strong confidence in holding prices firm, providing solid cost support for SiMn. Supply side, alloy plants in both the north and south maintained stable operations. Spot SiMn prices in production areas were below the cost levels of most enterprises, putting significant pressure on producers with losses. Demand side, a new round of steel mill tenders was gradually unfolding. HBIS Group's December SiMn procurement volume was 14,700 mt, down from the November tender volume of 16,000 mt. Overall, the market is watching for the new round of steel tender prices, and spot SiMn prices are expected to remain in the doldrums in the short term.

[ SMM Silicon-Based PV Morning Meeting Minutes: Silicon Metal Transaction Center Weakens, Polysilicon Prices Temporarily Stabilize ] Over the weekend, N-type recharging polysilicon was quoted at 49.6-55 yuan/kg, the N-type polysilicon price index stood at 51.99 yuan/kg, and granular polysilicon was quoted at 49-51 yuan/kg. Polysilicon prices temporarily stabilized over the weekend, with the current market showing strong wait-and-see sentiment. The Guangzhou Futures Exchange added new delivery brands, downstream sentiment was somewhat weaker, and prices were temporarily stable.

[Market Confidence Recovery Remains Weak, GO Silicon Steel Prices Expected to Remain in the Doldrums Next Week] This week, GO silicon steel market prices showed a rangebound fluctuation trend, with overall trading activity sluggish. Market feedback indicates that the loose fundamentals in the spot market have seen little improvement, coupled with persistently weak downstream demand. Actual transaction performance remained subdued, while spot inventory stayed at a relatively high level. Traders, aiming to accelerate turnover and recoup funds, showed strong willingness to sell, with quotations largely stable but room for negotiation in actual transactions increasing. Downstream enterprises, such as transformer manufacturers, affected by production pace and cost control, primarily purchased as needed. Their outlook on the market remained cautious, with restocking purchases being rare, and most opting to maintain existing inventory levels. Overall, current market confidence recovery remains weak, and the supply-demand imbalance has yet to be effectively alleviated. Spot prices for GO silicon steel are expected to remain in the doldrums next week.

[Silicon Metal Stalemate Weakens, Polysilicon Price Range Stabilizes]: On the supply side, silicon metal operating rates showed an increase in the north and a decrease in the south, with south China experiencing further seasonal production cuts by silicon enterprises in Sichuan and Yunnan during the dry season, while individual silicon enterprises in the north increased or resumed production. Under these adjustments, silicon metal supply in December is expected to remain roughly stable MoM. According to supply-demand balance calculations, silicon metal supply in Q4 showed inventory buildup, with the theoretical inventory buildup rate in November narrowing from October. If no unexpected disruptions occur on the supply side in December, the balance is expected to maintain inventory buildup expectations. The spot price of silicon metal has fluctuated rangebound for two months, and the stalemate in silicon metal competition has not yet changed, with recent spot prices still mainly fluctuating rangebound.