SMM Dec. 31: Silicon Metal: Spot silicon metal prices were stable this week, while futures prices moved sideways in a narrow range. In the spot market, as of Dec. 31, SMM oxygen-blown #553 silicon in east China was at 9,200-9,300 yuan/mt, flat WoW; #441 silicon was at 9,300-9,500 yuan/mt, flat WoW; #421 silicon (used in silicone) was at 9,800-10,200 yuan/mt, flat WoW; and #3303 silicon was at 10,200-10,500 yuan/mt, flat WoW. In the futures market, on Dec. 31, the most-traded SI2605 contract closed at 8,860 yuan/mt, down 20 yuan/mt WoW. Supply side, a few silicon enterprises in the north recently had production cut plans, and the January silicon metal production schedule is expected to decrease MoM. Demand side, the monthly operating rates in the polysilicon and silicone industries also declined, so the fundamentals in January showed weak supply and demand. In market transactions, suppliers found it difficult to conclude deals at high offers, while downstream buyers bought the dip, resulting in a generally muted trading atmosphere in the spot market.
Demand side, polysilicon enterprise weekly production was basically stable. December polysilicon production increased slightly by 1% MoM, resulting in limited change in silicon metal consumption. In January, a small number of domestic polysilicon enterprises are reducing loads or cutting production, and the production schedule is expected to decline MoM. Silicone enterprise weekly production changed limitedly WoW. Against the backdrop of emission reduction and holding prices firm, silicone monomer enterprises began reducing loads and cutting production successively from early December. Based on the current production schedule, there are no plans to increase operations in January, and individual monomer plants may further reduce loads, so the silicone industry operating rate in January is expected to be weaker MoM. Aluminum-silicon alloy enterprises were basically stable, purchasing silicon metal based on demand at low prices.
Supply side, domestic silicon metal production in December was 397,100 mt. The supply-demand balance in December showed inventory buildup, with a theoretical buildup of around 30,000 mt. In January, silicon metal supply and demand are both weak, with supply expected to remain relatively loose. Silicon metal prices still face upward pressure, while downside is supported by costs. Recently, silicon metal prices are expected to mainly fluctuate rangebound.
Polysilicon: The polysilicon price index this week was 52.87 yuan/kg. N-type recharging polysilicon was quoted at 50-56 yuan/kg, and granular polysilicon was quoted at 49-51 yuan/kg. Market transactions for polysilicon were extremely limited this week. However, influenced by rising downstream prices and polysilicon plants holding prices firm, small-lot transaction prices for polysilicon increased somewhat. Currently, talk of polysilicon price increases is widespread, but downstream buyers, constrained by demand and cost pressure, have limited acceptance for high prices, especially those exceeding 60 yuan/kg. Downstream attitudes remain undecided, and the positioning of mainstream transaction prices requires continued observation.
Wafer: Overall wafer prices rose this week, with N-type 183 wafer prices at 1.35-1.4 yuan/piece, 210R wafer offers at 1.45-1.5 yuan/piece, and 210mm wafer offers at 1.65-1.7 yuan/piece. Following the latest round of price increases, battery enterprises accepted a small volume, with the majority of orders transacted at offers 0.05 yuan/piece lower. Previously low-priced orders were renegotiated and transacted, and wafer enterprises showed strong willingness to hold prices firm. The core logic behind this round of wafer price increases is following the upward cycle of bulk commodities. Silicon, with its semiconductor properties, is also the fifth largest non-ferrous metal variety and one of China's core strategic reserves. Recent output controls across various segments of the PV industry chain played a crucial role in price improvement. Evidence shows that supply tightened after production cuts, allowing wafer prices to rise reasonably and reversing the previous situation of "more production, more losses." Profit improvement in January makes it inevitable for specialized enterprises to increase production, but potential inventory buildup risks should still be guarded against. Each enterprise should anchor demand to reasonably raise operating rates and cherish the hard-won results.
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