441 # Overview of Silicon Price Trends
In November, metal silicon first fell and then stabilized. According to the commodity market analysis system of Shengyi Society, as of November 29, 2023, the reference price for domestic 441 # metal silicon market was 15180 yuan/ton, a decrease of 1.94% from the beginning of the month and a decrease of 25.04% from the same period last year. At the beginning of the month, there was news of the shutdown of Southwest Power Co., Ltd., but the cancelled warehouse receipts have gradually flowed into the spot warehouse and have not yet been released. Overall, the supply has remained stable and the flow of goods is relatively abundant. Coupled with the decline in polycrystalline silicon prices, it has seriously pressured the price of metal silicon. Under the resonance of supply and demand, metal silicon is under pressure. In the mid to late period, the price of silicon metal tends to stabilize, with a slight decrease in prices in Xinjiang. In the context of the electricity price trend during the dry season in the southwest region, manufacturers have a clear willingness to raise prices, and the upstream and downstream are deadlocked in a game, resulting in stable prices.
Supply side
The main production areas in Southwest China have gradually entered the flat and dry seasons. Based on the current scale of production stoppage, the production reduction in Southwest China in November did not exceed expectations. In the later stage, there is still room for further production reduction, and it is expected that the production will decrease month on month. The slow release of new production capacity from major factories in the northwest, coupled with warehouse receipt cancellations, is expected to result in an overall oversupply in the market in December.
Cost side
Electricity prices in Sichuan and Yunnan have both increased in November, and it is expected that there will still be some room for increase in December, with the cost bottom further moving upwards. The ongoing border conflict in Myanmar has led to an increase in the price of wood chips, but the slowdown in procurement due to the reduction in construction in the southwest has partially offset the impact. Xinjiang’s silicon coal saw a slight increase due to the recent strong dual focus and contraction in mining supervision supply, resulting in a rise in prices at the end of the month.
Demand side
In November, the price of polycrystalline silicon further declined, and the mainstream range of single crystal dense materials with a current model of first-class solar energy has slipped to 68000 to 70000 yuan/ton. The new production capacity of polycrystalline silicon is still being continuously invested, but market transactions are limited, and there is a demand for stock of metallic silicon, but the price is severely suppressed.
The organic silicon DMC market is weakly declining, and on November 29th, the domestic organic silicon DMC market price reference was 14320 yuan/ton. The downstream demand for organic silicon DMC is limited, and the factory’s order volume is average. There is a strong wait-and-see sentiment on site, and some downstream factories have started operating at a reduced rate, indicating a further narrowing trend in demand for metallic silicon.
The operating rate of recycled aluminum alloy remained unchanged at 50.1% month on month, while the operating rate of primary aluminum alloy remained unchanged at 51.6% month on month. The procurement of recycled aluminum alloy raw materials has been hindered, and downstream orders have weakened, leading to a decrease in production to maintain essential procurement.
According to customs data, industrial silicon exports in October amounted to 43600 tons, a decrease of 15.01% compared to the previous month and a year-on-year increase of 12.95%. There was a significant decrease in exports compared to September, mainly due to weak overseas demand.
Future Market Forecast
Overall, the current production reduction in Southwest China has not exceeded expectations, and the price of metallic silicon has not fluctuated significantly for more than half a month. With no significant changes in fundamentals, it is difficult for silicon prices to break through. If the cost of Southwest China rises in December and some raw material inventory is consumed, silicon prices are expected to rebound. Continuous attention should be paid to the production reduction in Southwest China and changes in downstream demand. It is expected that the price of metallic silicon will remain stable in the short term.
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