Overview of 441 # Silicon Price Trend
In October, the current prices of metal silicon both fell, and after the National Day holiday, market demand continued to be sluggish, and spot prices continued to decline. Moreover, warehouse receipts in November may be centrally cancelled, and the outflow of futures warehouse receipts will increase the supply of the spot market. Under the current market demand and consumption, the market’s acceptance capacity is limited, and the performance of metal silicon prices in the future is not optimistic. According to the Commodity Market Analysis System of the Business Society, as of September 27, 2023, the reference price for the domestic 441 # metal silicon market was 1550 yuan/ton, a decrease of 2.15% from the beginning of the month and 7.09% from the same period last year.
Supply side
As of October 26th, the number of silicon metal furnaces in China has reached 438, with an overall furnace opening rate of 60.08%, an increase of 11 units compared to the previous month. In October, the supply of silicon metal steadily increased, and the number of furnaces opened reached a new high within the year. Due to the accelerated resumption of production by large factories in Xinjiang and the release of new production capacity, the cost center of Southwest silicon enterprises has shifted upwards during the dry season. The subsequent construction situation needs to be combined with the local electricity price situation. However, the current spot price difference is conducive to warehouse receipt cancellation and flowing into the spot market, supplementing the supply of industrial silicon during the dry season.
Demand side
In October, the price of polycrystalline silicon plummeted significantly, and the mainstream range of single crystal dense materials with a current model of primary solar grade has dropped to 70000-75000 yuan/ton. The recent increase in demand for silicon materials in the market is insufficient, and it is necessary to continue to follow up. With the expectation of increased supply, prices will continue to loosen and decline in the future. The market is concerned that the decline in profits from polycrystalline silicon will drag down industrial silicon prices, leading to a pressure drop in industrial silicon prices\
In October, the organic silicon DMC market fell first and then rose, with the domestic organic silicon DMC market price reference at 14760 yuan/ton. The trading atmosphere in the organic silicon DMC market is mild, with leading factories scheduling orders for a long time. The market is still relatively high in price and spot circulation is still tight. Currently, the overall performance of factory orders is still relatively smooth, and the domestic organic silicon DMC market is mainly stable, medium to strong in the short term.
Aluminum alloy prices fluctuate at high levels, with aluminum alloy ADC12 quoting 19500 yuan/ton. Small and medium-sized factories have insufficient orders, low enthusiasm for construction, and overall stable procurement of metal silicon.
Future Market Forecast
Overall, the current supply performance of metal silicon is relatively loose, with disturbances from the resumption of production by large factories in the north and an increase in warehouse receipt cancellations in November, and short-term metal silicon prices will continue to be under pressure. However, due to the expected cost increase and production reduction during the dry season in the Southwest region from November to December, the inventory pressure of silicon factories is not significant, and supported by costs. It is expected that metal silicon will first decline and then rise in November.
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