As April draws to a close, various organic silicon companies are actively handing over their sources of goods, and the market transaction atmosphere is easing. Looking back at the market situation this month, due to the average follow-up of terminal demand, individual factories found it difficult to adhere to the layout of reducing production and maintaining prices. In the situation of high inventory and low demand, they had to lower their quotations. Moreover, downstream enterprises have not wavered, and DMC prices have repeatedly fallen below historical lows. Finally, in some areas, DMC prices fell to the level of 11000-11300 yuan/ton, and the bottom was finally reached. It is reported that after the start of downstream month end warehouse construction, the downward shift of the market transaction center of upstream enterprises has slowed down, and in the past two days, it has significantly stopped falling and stabilized. In addition, some DMC and rubber factories have recovered prices due to improved order acceptance, and the DMC transaction price of most individual factories has returned to 11500 yuan/ton. As of April 28th, the mainstream quotation for DMC is 11300-12500 yuan/ton, with a monthly decline of 2300 yuan or 15.86%; A year-on-year decrease of 8.91% compared to last year;
Looking at May, due to the loss in profit margins, it is imperative to repair the market. Therefore, if supply and demand ease in the future, individual factories are likely to launch a new round of exploratory rebound. However, the recovery of terminal demand is limited, and prices are difficult to adjust significantly. The overall trading range is limited, and the market may stabilize at the beginning of the month.
On the cost side: Currently, the pattern of high production in the north and low production in the south is maintained, but there is still an expectation of overall production recovery in the southwest production area during the wet season, and the situation of loose production capacity continues. On the demand side, the price of polycrystalline silicon is temporarily stable, but the production reduction in the silicon material sector has increased, resulting in a general demand for industrial silicon; In terms of organic silicon, the weak price has led to unstable performance in industrial silicon procurement. However, in recent times, the number of orders from individual factories has improved, and demand has increased to some extent. Overall, due to the difficulty in improving downstream demand and cautious observation, the depletion of industrial silicon inventory is not good, and the performance of the futures and spot markets is unstable and continues to weaken. Yesterday, the closing price of the main futures contract Si2505 was 8770 yuan/ton, and the spot price of 421 # metallic silicon fell to 9800-11500 yuan/ton, providing limited support for DMC. In terms of operating rate: In April, under the strategy of reducing negative loads, individual factories have basically reduced production. However, due to the failure to follow up on demand in a timely manner, individual factories have returned to price wars and reduced production behavior has become forced. Currently, the overall operating rate remains at around 63%. Although inventory has eased at this stage, the source of goods has not been truly digested by the end market. Individual factories may continue to reduce production in May.