In the new week, the silicone market is still deeply mired in a downward spiral, and the downward trend has "broken the defense", which is worrying.
Yesterday, some individual DMC factories in Shandong opened at 11500 yuan/ton, followed by a second round of bidding. Some individual factories also followed suit and the DMC transaction price was basically around 11500 yuan/ton. There is still room for negotiation for large quantities. This price not only fell below a ten-year low, but also far exceeded downstream expectations, stimulating downstream enterprises to increase their stocking efforts. As the end of the month approaches, some downstream companies have started building warehouses at the bottom, and this week many companies have launched a second round of bottom fishing and stocking up. However, the decline was rapid, and downstream demand for buying at the bottom was cautiously released in batches, following the principle of "buy again when the market falls, buy less when the market stops falling, and wait and see when the market rebounds".
From a cost perspective, the electricity price during the southwest flood season has been lowered, and the average production cost has further decreased. Some of the previously shut down enterprises have no plans to resume production, and there is no news of new scale reduction or shutdown in the near future. Although the overall supply is at a high level, it is difficult to achieve significant growth. In terms of demand, the futures price of polycrystalline silicon has plummeted significantly, and the sentiment in the photovoltaic market is sluggish. However, the monthly production schedule has not been significantly adjusted, which stabilizes the demand for industrial silicon; The price of organic silicon continues to decline, and monomer factories have limited purchases of industrial silicon in order to stabilize prices or further reduce production. Demand is sluggish, industrial silicon inventory is difficult to clear, and under inventory pressure, fundamentals continue to deteriorate. Futures and spot prices hit new lows, with the main futures contract Si2505 closing at only 8860 yuan/ton yesterday, and spot 421 # metal silicon prices falling to 10150-11450 yuan/ton, providing weak support for DMC.
In terms of operating rate, the demand is poor, and many individual factories are undergoing maintenance. Inner Mongolia, Zhejiang, Shandong and other places have basically reduced their load operation. However, the market continues to decline and profit recovery is difficult. In order to avoid risks, individual factories may expand their production reduction scale in the future.
At present, the decline in the silicone market is synchronized with bottom fishing. In this volatile market, both buyers and sellers are playing cautiously and observing, and the future market direction is still full of uncertainty.