Entering this week, May has entered its final period, and currently the DMC market is still caught in a bidding vortex. The last wave of trend before the holiday will settle this week. From the on-site perspective, some individual factories in Shandong unexpectedly rose slightly last Friday to stimulate downstream stocking, but other individual factories are still giving small discounts to core customers due to shipping pressure. Moreover, from the current supply and demand situation, the price of cost metal silicon continues to fall, giving individual factories room for discounts. Some downstream enterprises are gradually opening up bottom replenishment actions. Therefore, the current shipment of individual factories is relatively smooth, and it is more likely to continue to operate at a stable price. Overall, due to the average level of terminal consumption, some midstream and downstream enterprises are cautious about replenishing their positions at the bottom. However, upstream enterprises have some room for negotiation with large investors, and their price for volume behavior has also resulted in positive feedback on orders. It is expected that price fluctuations will be limited this week, and the DMC market will operate steadily.
Cost side: Large factories in Xinjiang may gradually resume production, silicon factories in the northwest region will maintain stable operating rates, and some silicon factories in Yunnan will resume production. Overall, production capacity will gradually increase. On the demand side, polycrystalline silicon production continues to decline, but some silicon material factories have plans to resume production, and production may increase slightly; The maintenance companies for the organic silicon equipment are about to resume production, and overall demand may rebound. In addition, there have been recent reports in the industrial silicon market that major factories in Xinjiang plan to resume production at the end of May and early June, which may boost the market. However, the demand for industrial silicon is currently difficult to improve. If major factories resume production, the pressure of excess will further increase. Overall, the closing price of the main futures contract Si2507 yesterday was 7610 yuan/ton, and the spot price of 421 # silicon metal fell below the 9000 mark, with a quoted price of 8900-12000 yuan/ton. It is expected that the industrial silicon market will maintain a volatile and weak trend in the short term. In terms of operating rate: Currently, due to weak demand and insufficient downstream gas purchasing, the supply side has limited relief. Therefore, the production reduction efforts of individual factories will not decrease, and the overall operating rate is around 60%. If the demand side still does not improve in June, there may be new maintenance plans for individual factories at that time.