The end of May is quietly approaching, and the DMC market is still trapped in a bidding vortex. The final price trend before the holiday will be revealed this week.
Last Friday, some individual factories in Shandong unexpectedly raised prices slightly in an attempt to stimulate downstream stocking. However, other individual factories still offer small discounts to core customers due to shipping pressure. Currently, the continuous decline in the price of cost metal silicon provides room for individual factories to make concessions. In this context, some downstream enterprises have initiated bottom replenishment actions, and individual factories have also shipped smoothly, with a higher probability of choosing to continue stabilizing prices. However, the level of terminal consumption is generally average, and some midstream and downstream enterprises still hold a cautious attitude towards bottom replenishment. However, there is some room for negotiation among upstream enterprises for large clients, and this strategy of exchanging price for quantity has resulted in positive feedback from orders. It is expected that DMC prices will have limited fluctuations this week, and the market will maintain a stable operating trend.
On the cost side, the situation is quietly changing. Large factories in Xinjiang may gradually resume production, while the operating rate of silicon plants in the northwest region remains stable. Some silicon plants in Yunnan have also resumed production, and 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 is expected to increase slightly; Organic silicon maintenance companies are about to resume production, and overall demand may rebound. However, the current demand for industrial silicon is unlikely to improve, and if the resumption plans of Xinjiang's major factories by the end of May and early June are implemented, the excess pressure will further increase. Yesterday, the closing price of the main futures contract Si2507 was 7610 yuan/ton, and the spot price of 421 # silicon metal fell below the 9000 mark, with a price range 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, due to the weak demand side, downstream gas purchasing is insufficient, and supply side relief is limited. The reduction in production by individual factories has not decreased, and the overall operating rate is currently around 60%. If there is still no sign of improvement on the demand side in June, individual factories may also initiate new maintenance plans. It is worth mentioning that a single giant has recently terminated its listing and increased capital. Whether this action will have an impact on the market structure has also attracted widespread attention in the industry. It is worth continuing to observe whether the DMC market will remain stable or face changes in the future.