In March, the spring tide surged and the rise of the organic silicon market was established, announcing the official start of a new round of upward cycle. Specifically, last weekend's actual control meeting clarified that the emission reduction target for the period from March to May would be increased to 35%, and the tightening of the supply side provided some support for prices. At the same time, driven by individual factories, the price of organic silicon has risen by 300 yuan/ton across the board, and the market has a strong upward trend. In terms of demand, although the upward trend has stimulated the stocking demand of middle and downstream enterprises to some extent, the current inventory of enterprises is generally sufficient, and their acceptance of high priced raw materials varies. The overall willingness to stock up is not strong, and most of them are mainly based on monthly stocking. However, under the pattern of supply reduction, the downstream order taking ability has been improved.
In addition, it is important to pay close attention to the trend of methanol in the near future: the geopolitical situation in the Middle East has significantly escalated, and domestic methanol imports are restricted. On March 2nd, the market for chemical products such as crude oil and methanol rose strongly. Among them, methanol 2605 futures rose by the limit up, closing at 2365 yuan/ton, an increase of 8.04%, while also driving up domestic methanol spot prices. According to the monitoring of Baichuan Yingfu Market, the average price of methanol in the domestic market was 1978 yuan/ton on that day, an increase of 62 yuan/ton or 3.24% from the previous trading day. On the morning of the 2nd, a senior industry researcher told a Shanghai Securities News reporter about the future trend of methanol. "If the shipment volume of methanol in the Middle East continues to decline in March, the tight supply situation in China will further intensify, and methanol prices are expected to see a broad rise." Overall, the enthusiasm for inquiries in the middle and lower reaches has rebounded, and the rise in methanol has formed strong cost support for individual factories. The mainstream DMC quotation is 14000-14300 yuan/ton, and there is sufficient confidence in short-term price increases. The subsequent trend depends on the implementation of emission reduction by individual factories and the pace of downstream stocking. It is expected that the silicone market will continue to operate steadily with a moderate to strong trend in the short term.
Industrial silicon: From the supply side perspective, silicon factories in the northern and southern regions continue to reduce production burden, but some large factories plan to gradually resume work in March, and there is an expectation of growth in supply in the future. In terms of demand, the sentiment during the post holiday recovery period for polycrystalline silicon is sluggish, market sentiment is weak, and procurement enthusiasm is not high; In terms of organic silicon, monomer factories have clearly increased their efforts to reduce emissions, which may further compress the demand for industrial silicon. Overall, the fundamentals of the industrial silicon market are weak, and the spot and futures markets continue to consolidate weakly. As of March 2nd, the closing price of futures Si2605 contract was 8325 yuan/ton, and the price of 421 # silicon metal remained in the range of 9500-10200 yuan/ton. We need to pay attention to the resumption pace of major factories in March, the implementation of organic silicon production restrictions, and the potential impact of changes in the geopolitical situation on the market. In terms of operating rate: Due to the impact of price increases, individual factories are currently operating steadily. However, in order to achieve the established 35% emission reduction target, individual factories plan to increase their efforts to implement production reduction and load reduction measures. It is expected that the overall operating rate will fluctuate within the range of 60-65%. In March, whether individual factories can carry out maintenance as planned is the key to supply side contraction.