Increase by 300! In the new week, the organic silicon market will usher in a new round of exploration and rise. With a unified and strong sentiment of hoping for an increase, multiple individual factories collectively rose another 300 today! DMC quotation is 11300 yuan/ton! 107 glue and raw glue are also following suit!
From the current market situation, the silicone market experienced a tentative rise last week, and now it has continued to rise. Some companies' stocking sentiment may have been affected, but most downstream companies have sufficient supply and have not rushed to follow the rise. In the context of sustained low terminal demand, companies generally digest their previous inventory and have limited ability to take on high-level orders. At the same time, most dealers in the market took advantage of this upward trend and actively fulfilled their orders.
Overall, although both upstream and downstream are hoping for a rise, the supply side of DMC is still loose and there has been no significant decrease in device load, which has brought a bearish atmosphere to downstream. In the environment of oversupply, it is expected that this round of upward trend will continue for a period of time, and after downstream gradually digest it, it is expected to enter a centralized stocking state. This week, the DMC market is expected to maintain large stability and small movements.
On the cost side: On the supply side, although major factories in Xinjiang have not yet resumed production, the southwest region has experienced a decline in costs due to the impact of the wet season. Silicon plants have resumed large-scale production, and the overall production capacity level is still relatively high. On the demand side, both polycrystalline silicon and organic silicon monomer factories have recently resumed production, resulting in an overall increase in demand for industrial silicon. In addition, the recent strengthening of macroeconomic policy expectations has continued to boost the market, and the market is running relatively strong.
Overall, driven by both macro and demand factors, silicon companies are continuously reducing their inventory, resulting in a sustained upward trend in futures and spot prices. Yesterday, the closing price of the main futures contract Si2509 was 8695 yuan/ton, up 275 yuan, while the spot price of 421 # metal silicon was 8600-9900 yuan/ton, up about 100 yuan. In the future, the supply and demand fundamentals of industrial silicon are still weak, and it is expected that spot prices will mainly adjust in a narrow range, with limited upward space.
In terms of operating rate: Currently, most individual factories are operating to maintain load reduction, but several units have resumed production and the overall operating rate has increased to over 70%. Some individual factories with poor inventory removal have shown the risk of accumulating inventory. If there is no good feedback in the short term, there may be a new round of concession acceptance or load reduction maintenance for individual factories in the future.