SMM January 8: Silicon Metal: Spot silicon metal prices held steady this week, while futures prices rose first then fell with large fluctuations. Spot market, as of January 8, SMM oxygen-blown #553 silicon in east China was at 9,200-9,300 yuan/mt, #441 silicon at 9,300-9,500 yuan/mt, #421 silicon (used in silicone) at 9,800-10,200 yuan/mt, and #3303 silicon at 10,200-10,500 yuan/mt, all flat from pre-New Year's Day. Futures market, the most-traded silicon metal futures contract moved sideways near 8,700-9,000 yuan/mt initially, with some silicon plants selling on high spot-futures price spread. Thursday afternoon, the market was in the doldrums, with the afternoon futures decline steepening; the SI2605 contract hit a low of 8,465 yuan/mt and closed at 8,535 yuan/mt. Market transactions, large plants actively sold spot cargo with quotes lower than most trading firms engaging in both spot and futures market and other silicon enterprises; downstream users purchased at low prices. After futures pulled back on Thursday, the volume of buyer futures point-price purchases increased.
Demand side, polysilicon operating rate saw limited change WoW. Monitor changes in polysilicon enterprise operating rates. Silicone monomer enterprise weekly operating rate was basically stable WoW; a meeting related to holding prices firm was held again this Friday among silicone monomer enterprises. DMC prices currently held steady at 13,500-13,700 yuan/mt. Monomer plants' purchase prices for #421 silicon were largely stable MoM. Aluminum-silicon alloy enterprises' operating rate was slightly weak, mainly affected by the industry shifting to the off-season and production pressure from high-priced aluminum scrap, resulting in primarily low-price purchases of silicon metal.
Supply side, due to production cuts at some northern silicon metal capacity around late December and early January, the silicon metal operating rate trended weaker WoW. Cost side, spot silicon coal prices were unchanged recently, and costs were largely stable. Silicon metal futures face hedging pressure on the upside and buy order support on the downside, while spot prices fluctuated rangebound. Monitor downstream users' restocking ahead of the Chinese New Year.
Polysilicon: This week's polysilicon price index was 55.32 yuan/kg, with N-type recharging polysilicon quoted at 52-59 yuan/kg and granular polysilicon at 50-59 yuan/kg. Polysilicon market transaction volume increased this week, with several crystal pulling plants seeing deals in the thousands of tonnes; the market roughly estimated new signings between 10,000-20,000 tonnes. Transaction prices have reached above 60 yuan, but often come with additional clauses or dual distribution agreements, so some extremely high prices were disregarded. Later in the week, market news intertwined regarding self-discipline and anti-monopoly; subsequent mid-January self-discipline meeting progress may see some changes. Market confidence waned, with futures experiencing a sharp decline on January 8. Subsequent spot markets continued to follow suit.
Wafer: This week, overall wafer prices continued to rise, with N-type 183 wafers priced at 1.38-1.4 yuan/piece, 210R wafers quoted at 1.48-1.5 yuan/piece, and 210mm wafers quoted at 1.68-1.7 yuan/piece. Today, a top-tier enterprise once again raised its quotation to 1.4-1.55 yuan/piece, primarily to pass on the fact of rising raw material costs. On the other hand, the raw material inventory held by futures and spot traders is below market prices, leading to recent changes in the procurement patterns of wafer enterprises. Top-tier enterprises are still insisting on holding prices firm, but despite significant profit improvements, battery plants continue to engage in bargaining. In contrast, the core risk in the wafer segment lies in the pace of inventory accumulation in January and the extent of production cuts in February. To maintain or even further increase prices, substantial production cuts to below 35 GW in February would be necessary to achieve a tight supply-demand balance and keep overall inventory at reasonable levels.
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