Entering mid August, the organic silicon market continued to operate at a stable price. Last week, due to the loosening of raw material prices, the bearish sentiment in the middle and lower reaches has intensified, while the stocking sentiment has synchronously subsided. In addition, the market demand has limited driving force, and the overall transaction situation has become increasingly unsatisfactory, further driving down market prices. In terms of individual factories, some individual factories in Shandong province fell sharply last week and were closed yesterday, which added a certain degree of bearish sentiment to the market. Downstream enterprises returning to the demand side may have the intention to layout at lower prices, while other individual factories continue to maintain stable prices with the support of pre-sale orders. DMC quotes range from 11800 to 12500 yuan/ton, and actual negotiations mainly focus on discounts. Overall, with the continuous loosening of DMC market prices, individual factories are becoming more active in arranging production orders and offering discounts to core customers to continue orders and balance profit margins. Downstream enterprises are mainly digesting inventory under a wait-and-see attitude and have not yet entered the market for stocking in August. Currently, everyone is closely monitoring the adjustment of bidding prices by Shandong Dongfeng before making plans. It is expected that DMC market prices will continue to operate steadily with small movements this week.
Cost side: On the raw material side, there has been a slight increase in the number of furnaces opened by large factories in northern production areas, and there has been a slight resumption of production in southwestern production areas during the wet season. At the same time, new production capacity has been added to output, resulting in an overall high supply. On the demand side, some polycrystalline silicon production lines have plans to resume production, and the output may increase; In terms of organic silicon, the operating load of individual factories is relatively high, and the overall demand for industrial silicon has slightly increased. In addition, there have been recent reports in the market that industrial silicon industry associations in five provinces, including Yunnan, Sichuan, and Fujian, have reached a "Kunming Initiative for Industrial Silicon Industry Association Representatives to Oppose Internal Rolling and Promote High Quality Development": jointly proposing that industrial silicon production enterprises across the country jointly resist the bad behavior of selling products below cash cost price, resist low price bidding, resist internal rolling competition, and all industrial silicon production enterprises shall not sell products below full cost price. The positive news resonates with the futures and spot market. As of August 11th, the closing price of the main futures contract Si2511 was 9000 yuan/ton, with a cumulative increase of over 4%. The spot price of 421 # silicon metal was 9750-10400 yuan/ton, with some rising by 100 yuan. In the future, due to the increased enthusiasm of downstream stocking, while easing the supply side, the profits of silicon plants have also been repaired. However, the overall supply is still relatively high, and the demand side has not been fully released, which poses a resistance to the overall market. In the short term, the industrial silicon market may continue to show a volatile trend. In terms of operating rate: The operating rate of individual factories is still relatively high this week, and with the continuous decline in shipments from individual factories and the improvement in pre received orders, the operating rate remains above 70%. However, the demand side release is limited, and some manufacturers with high inventory are still considering reducing load to reduce losses. Subsequent single plant construction or maintenance at a medium to high level.