Entering Tuesday, the organic silicon market continued to operate weakly and steadily. From the perspective of the market, as the scale of single plant load reduction in Shandong, Jiangsu, Zhejiang and other regions gradually expands, the supply level of DMC is shrinking day by day, and the price support is still acceptable. It is difficult for DMC to experience a significant decline in the short term. Yesterday's quotation remained at 14700-14800 yuan/ton, and the transaction price was at 14300-14800 yuan/ton. In terms of orders, with the gradual depletion of low-priced sources in the early stage, the inventory of middle and downstream enterprises is low, and the demand for essential goods is expected to gradually be released; However, the current terminal demand is still weak, which limits the procurement scale of mid to downstream enterprises and makes it difficult to form strong support for the upstream market. In the short term, the current supply and demand sides are still in a stalemate, and it is expected that the silicone market will continue to operate weakly in the short term.
Industrial silicon: On the supply side, silicon plants in the northern region have started operating steadily, while in the southwestern region, the resumption of production has accelerated under the influence of the wet season, and the operating rate has slowly increased. Currently, the overall pace of capacity release is average, but the turnover rate is slow, and the overall supply presents a relaxed situation. On the demand side, many polycrystalline silicon enterprises in various regions have plans to increase production, and it is expected that there will be incremental demand for industrial silicon; In terms of organosilicon, the reduction of production by monomer factories has been further promoted, resulting in limited demand for industrial silicon. Overall, the fundamentals of industrial silicon continue to operate weakly and are expected to maintain a volatile trend in the short term. As of June 15th, the closing price of the main futures contract Si2609 is 8670 yuan/ton; The quotation for 421 # metal silicon is 9300-9500 yuan/ton.
In addition, from June 9th to 11th, the China Industrial Silicon Industry Chain Annual Conference and Technical Seminar was held in Urumqi, Xinjiang, focusing on the discussion of three national standards, including "Energy Consumption and Carbon Emission Limits for Industrial Silicon and Magnesium Unit Products". The new policy sets mandatory carbon emission quotas for the first time, cancels the classification of reducing agents, and significantly tightens the three-level energy consumption red line, basically touching the line for thermal power lines. This means that 'spending money to buy carbon' cannot exempt illegal production capacity, inefficient production capacity faces a deadline for rectification or elimination, and industry supply will shrink in an orderly manner. At the same time, it forces enterprises to accelerate the replacement of green electricity and waste heat recovery, end the extensive expansion model, highlight the competitive advantages of top compliant enterprises, and move towards green and high-quality development in the long run. In terms of operating rate: Currently, individual factories generally maintain a mode of reducing production and load, and most enterprises actively reduce production capacity to cope with sluggish demand. And there is still a clear maintenance schedule in the future, with an overall industry operating rate of around 65%. It is worth noting that in order to stimulate downstream inquiries and alleviate inventory pressure, individual factories may further increase their efforts to reduce negative loads in the future, driving market sentiment to recover.
On the demand side: Under the influence of the traditional off-season, middle and downstream enterprises generally have fewer new orders, and their procurement of upstream raw materials tends to be conservative, mainly based on on-demand procurement, without any behavior of stockpiling in advance. At the same time, influenced by the continuous production reduction effect in the upstream, although enterprises are no longer bearish on the future market, they dare not rashly buy at the bottom. At present, the market is in a delicate balance of "not moving down and not daring to buy". Enterprises would rather maintain low inventory operation than stock up in advance for an uncertain rebound, and the overall sentiment is cautious. Overall, the current external environment is not fully clear, and midstream and downstream enterprises are maintaining a gradual follow-up to replenish their inventory, making it difficult to have concentrated behavior and unable to provide strong price driving force. It is expected that the short-term organic silicon market may show a bottom stalemate pattern. The real recovery still needs to wait for individual factories to reduce production beyond expectations or for downstream orders to show substantial improvement.