SMM Nov. 27: Silicon Metal: Spot silicon metal prices maintained a largely stable trend with narrow fluctuations this week. As of Nov. 27, SMM oxygen-blown #553 silicon in east China was at 9,500-9,600 yuan/mt, flat WoW; #441 silicon was at 9,700-9,800 yuan/mt, flat WoW; #421 silicon (used in silicone) was at 9,800-10,200 yuan/mt, flat WoW. In the futures market, the most-traded SI2601 contract traded in the range of 8,950-9,200 yuan/mt this week, settling at 9,115 yuan/mt on Thursday afternoon, up 40 yuan/mt WoW. Trading-wise, domestic end-user inquiries and transactions were sluggish. After suppliers raised spot quotes, some end-users showed resistance, with the overall downstream maintaining a low-price purchasing sentiment.
Demand side, silicone operating capacity increased slightly this week, mainly due to production resumptions at a few monomer units after maintenance. According to the earlier joint production cut and price support plan in the silicone industry, silicone monomer capacity is expected to see production cuts and a lower operating rate starting Dec. 1. Market participants will monitor the actual production schedules of silicone enterprises next week. The polysilicon weekly operating rate decreased WoW. Polysilicon enterprise production schedules for December are mixed compared to November, with an expected limited decrease in silicon metal consumption. The weekly operating rate of aluminum-silicon alloy enterprises was basically stable WoW, and the December operating rate is forecast to dip slightly MoM but remain higher than the same period last year, primarily supported by solid end-use demand from automotive orders.
Supply side, Sichuan and Yunnan regions are set for a new round of seasonal production cuts around late November and early December, leading to a narrowing trend in total silicon metal supply. With both supply and demand weakening in December, the theoretical industry inventory buildup is expected to narrow further, and the supply-demand balance may show a tight balance. The short-term silicon metal price outlook maintains a fluctuating stalemate. Next week, joint production cuts and price support by silicone monomer enterprises could create a bearish sentiment for silicon metal due to reduced consumption. However, the production cuts might push DMC prices to explore slight gains again, and potential profit transmission along the industry chain could stimulate bullish sentiment in the silicon market. The tug-of-war between longs and shorts will focus on changes in capital sentiment.
Polysilicon: The polysilicon price index was 51.9 yuan/kg this week. N-type recharging polysilicon was quoted at 49.7-55 yuan/kg, and granular polysilicon was quoted at 50-51 yuan/kg. Polysilicon prices were largely stable overall. The downstream market saw frequent price cuts, casting a slightly pessimistic overall sentiment. Top-tier polysilicon enterprises held a firm stance on supporting prices, keeping them unchanged for now. December production changes are mixed, with operating rate adjustments likely concentrated in regions like Inner Mongolia and Xinjiang. Polysilicon production in November fell short of previous expectations, likely below 120,000 mt.
Wafer: Overall wafer prices declined this week, with N-type 183 wafer prices at 1.15-1.2 yuan/piece, 210R wafer offers at 1.2-1.25 yuan/piece, and 210mm wafer offers at 1.5-1.55 yuan/piece. Wafer enterprise prices once again fell below support levels this week, with average prices for all sizes dropping to cash costs, and low prices even breaching cash costs. The logic that wafer price reductions cannot stimulate more demand has become clear; current prices are driven by a price collapse, and some enterprises with tight cash flow are eager to dump wafers to recapture funds. Wafer production is expected to see significant cuts in December, and strategies adopted by enterprises with and without material will change.
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