Metallurgy / Chemicals / Rubber & Plastics

Last week, industrial silicon futures prices failed to continue the previous week's rebound, leading to another weakening of prices and weak demand leading market sentiment. SI2308 rose or fell by -3.71% for the entire week, closing at 12730 yuan/ton. Last week, the main contract transactions fell, and the holdings slightly increased. Some funds shifted to September contracts. In the Spot market, the price of 553 was generally stable, while the price of 421 continued to decline. Although the silicon factory had the intention to support the price, the overall performance of downstream industries was sluggish, and the demand side maintained just needed procurement, with limited price support.

From a supply perspective, the number of industrial silicon furnaces increased last week, mainly due to the arrival of the rainy season in the southwest region, with some silicon factories operating and the number of furnaces in other regions temporarily stabilizing. According to data from Baichuan Yingfu, as of June 8th, the number of silicon metal furnaces in China has reached 299, with an overall start-up rate of 41.64%, an increase of 17 units compared to the previous month.

From a demand perspective, the demand for polycrystalline silicon remains stable. Last week, the price of polycrystalline silicon further fell, and the profit margin of polycrystalline silicon production continued to be under pressure, mainly due to the continuous release of polycrystalline silicon production capacity and the increasing supply. At present, polycrystalline silicon enterprises as a whole still maintain strong construction, and the actual demand for industrial silicon is increasing. However, due to the weak market situation of industrial silicon, grinding enterprises often have a wait-and-see attitude towards procurement, which has formed a certain degree of inhibition on the demand for industrial silicon.

The performance of organic silicon is sluggish. The organic silicon market is temporarily deadlocked, and the DMC quotation is temporarily stable. Despite the reduction in raw material prices to alleviate cost pressure, weak demand continues to squeeze industry profits, and the industry as a whole is still in a state of loss. Enterprises still maintain a state of reduced production burden, and the core contradiction in the industry is still weak demand, with low demand for industrial silicon from organic silicon.

The demand for aluminum alloys is weak. Last week, the price of aluminum alloy ADC12 remained stable, and aluminum alloy companies temporarily started operating smoothly. However, as temperatures rose, the aluminum alloy industry gradually entered the off-season. In addition, the overall weakness of the automotive industry makes it difficult for aluminum alloy companies to boost their demand for industrial silicon.

Customs data shows that last week, industrial silicon exports continued to be weak, and export prices continued to decline. Weak overseas demand and declining export volume have dragged down industry demand. Customs data shows that in April, China's silicon metal export volume was 45000 tons, a decrease of 7% month on month and 18% year-on-year. Customs data shows that from January to April, the cumulative export volume of metal silicon reached 191600 tons, a year-on-year decrease of 18%.

From the perspective of cost and profit, the cost of industrial silicon continues to decline, mainly due to the arrival of the rainy season in the southwest region, the reduction of electricity prices, and the temporary stability of reducing agent prices. Industrial silicon production profits have slightly recovered, but the industry as a whole still faces significant pressure. At the current profit level, manufacturers in the southwest region are relatively weak in their willingness to start production.

According to customs data, in terms of inventory, industrial silicon inventory temporarily stabilized last week, with a social inventory of 151000 tons, which remained unchanged from the previous week; Factory inventory slightly increased, with 122000 tons of industrial silicon factory inventory last week, an increase of 3000 tons compared to the previous week.

Customs data shows that overall, the performance of industrial silicon futures remained weak last week, and market concerns about demand continue to dominate the market. At present, the profits of industrial silicon production are sluggish, and the resumption of production in silicon factories in the southwest region is slow. The supply increase may not be as expected, and there is some cost support for industrial silicon. However, the current industrial silicon inventory is still high, and in a state of weak demand, high inventory still needs time to digest. Overall, industrial silicon still faces strong pressure from weak demand. In the context of low profits, it is difficult to quickly release supply during the wet season, and the market is in the stage of actively removing inventory. Industrial silicon currently has no upward mobility. (Transferred from: China Nonferrous Metals Network)