The supply and demand side dominates the price trend of silicon metal, which may be weak in June

According to the data of business agency, on May 26, the average domestic market price of silicon metal (441 × 3) was 11058.33 yuan / ton, up 0.45% compared with 11008.33 yuan / ton at the beginning of the month, and down 6.55% compared with 11833.33 yuan / ton at the beginning of the year.


The price of 441 silicon in each region on the 26th is as follows:


The price range of metal silicon in Fujian area is 10600-10700 yuan / ton, that in Sichuan area is 10900-11000 yuan / ton, that in Kunming area is 10800-10900 yuan / ton, that in Shanghai area is 11500-11700 yuan / ton, that in Tianjin port is 11100-11200 yuan / ton, that in Huangpu port is 11100-11200 yuan / ton 。


In May, the price of silicon metal 441 was stable, and the supply and demand game was dynamic.


On the supply side, silicon companies started work less than expected, their inventory was lower than expected, and silicon companies were willing to hold up prices. Many start-up enterprises adopt the pre-sale mode to lock the production capacity in advance.


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At the sales end, the export market was weak in May, with a small amount of rigid procurement as the main demand; the downstream demand in the domestic market was relatively warmer, because of the doubt on the terminal demand and the short expectation on raw materials, the procurement of raw materials was more cautious, mainly on demand, and the inventory of raw materials was low.


Silicon enterprises open or increase in June


In June, the number of silicon enterprises in the southwest production area will increase, and Sichuan will gradually enter the water rich period, and the enthusiasm of silicon plants for furnace opening will gradually increase. In the direction of Yunnan, Baoshan and Lincang silicon plants may increase the starting load as usual, and Yunnan Dehong silicon plant is expected to gradually open in June.


In the direction of Xinjiang, production problems caused by silica shortage and power supply equipment are expected to be solved. With the increase of the operating rate of two large factories in Xinjiang and the smooth operation of medium-sized enterprises in Ili and other places, the capacity will be released or more fully in June.


Three major downstream demand


1. Polysilicon


According to data from the business agency, since April, domestic polysilicon prices have been falling continuously, reaching a historical low.


At present, the supply and demand of polysilicon market is unbalanced. At the supply side, the overall domestic operation rate remains at 80-90%. Although some manufacturers cut production and shut down due to shrinking demand orders, the overall operation rate is relatively high due to relative demand; at the demand side, the global terminal installation is blocked, and the overseas orders at the domestic component end are delayed or cancelled, resulting in the reduction of the domestic component manufacturers’ operation rate, which is then transmitted to the silicon part of the upstream industrial chain.


It is predicted that the demand for polysilicon will not be changed in the short term, the number of production cuts and production stops of enterprises will increase under the double blow of low price and hard to find orders, the operating rate and output may move down on a month on month basis, and the demand for raw metal silicon will be negative.


2. Organosilicon DMC


According to the data of business agency, after the return of the year, the price of organosilicon DMC fell sharply, and the low-level operation was mainly from April to May.


At present, the bottom of organosilicon DMC is fluctuating and the supply and demand game is dynamic and stable. It is reported that in the early stage, many factories have plans to reduce production and stop maintenance, and the market is expected to be better with the efforts of major monomer factories to increase. Recently, the starting load cycle ratio of organosilicon monomer has slightly increased, and the turnover of organosilicon DMC has improved.


Based on the factors of supply chain management, at present, organosilicon, especially some monomer plants, are mainly purchased on demand due to the influence of bearish silicon price and cautious factors on the downstream market, and the possibility of short-term expansion of the demand for raw metal silicon is small.


3. Aluminum alloy


Recently, the inventory of aluminum industry chain has been significantly reduced. As of May 21, the social inventory of aluminum ingots has decreased by 30000 tons to 964000 tons compared with that of last Monday. As of May 22, the inventory of aluminum in the previous period has decreased by 30300 tons to 322100 tons compared with that of last week. The inventory of LME aluminum has increased by 38400 tons to 1458100 tons compared with last week.


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It is reported that the consumption of profile and aluminum foil plate is better, and the consumption of aluminum plate belt and recycled aluminum and aluminum cable tends to be weaker. In terms of exports, in April 2020, 441000 tons of aluminum products were exported, down 19% year on year. From January to April, the total export was 1628000 tons, down 16% year on year. At the later stage, the aluminum outlet is under pressure.


The operation rate of domestic aluminum alloy is affected by the improvement of terminal automobile consumption, and the operation rate is relatively high. In April, automobile production and sales were 2.012 million and 2.07 million respectively, up 46.6% and 43.5% month on month, up 2.3% and 4.4% year on year respectively.


However, with the opening of the profit window of aluminum ingot import, the imported aluminum alloy may occupy the domestic aluminum alloy Market in the later stage. It is expected that the consumption of silicon metal for aluminum alloy will be weakened after June.


Future forecast


The metal silicon purchased under rigid demand is greatly affected by the overall supply and demand factors. With the arrival of the wet season, the production capacity may be released, while the downstream consumption may not be able to expand synchronously. It is expected that in the near future, the metal silicon will be mainly operated in the air, and in the later stage, it will focus on the environmental policy factors and the impact of the average cost of social production on the supply side.