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Industrial Silicon Market Summary

Report: Guangda Securities Weekly Strategy Report - September 17, 2023

Industrial silicon market shows positive momentum with increased transactions and sustained price rises. Key aspects derived from the analysis include supply growth driven by regional production increases, demand responses with organic silicon and polysilicon segments showing volatility, declining inventories, and upward price trends in both spot and futures markets.

Supply Analysis

• Weekly production climbed by 1,510 tons to 820,000 tons, with an additional 5 furnaces started, bringing the total to 385 and utilization rate to 52.81%.
• Geographic factors: Inner Mongolia's new output is evident; Xinjiang's large-scale plants are expanding; Guangxi may scale up after electricity price agreements; Sichuan and Yunnan remain stable without expected curtailments.
• Overall supply pressures are increasing due to higher production capacity utilization.

Demand Analysis

• Organic silicon (DMC) demand surged, with prices rising 700 yuan/ton to 13,700-14,900 yuan/ton and output increasing 500 tons weekly to 396,000 tons.
• Polysilicon market is stable at around 78-79万元/ton, with weekly output up 900 tons to 283,000 tons but utilization rate dropping to 78.53% due to inconsistent downstream component demand.
• Aluminum alloy demand is supported by higher processing fees, but supply收紧 concerns persist.

Inventory Situation

• Domestic inventory decreased by 14,160 tons to 1,434,000 tons, with plant inventory reducing 7,160 tons.
• Port inventories: Delivered reductions at various hubs, indicating tight market conditions.

Price Trends

• Spot prices continued to rise, with specific grades like 421# up 600 yuan/ton; overall reference price hit 14,867 yuan/ton.
• Futures market: The主力 2310 contract closed at 14,825 yuan/ton, marking a 47% weekly increase.
• Spread dynamics: 553# inter-grade spread narrowed, while 421#-553# differential widened.

Key Viewpoint

• Market sentiment is positive, with active buying driven by supply momentum and concerns over shortages.
• Risks include potential downward pressure if solar-related demand wanes or production cuts occur.

Conclusion

The industrial silicon market is characterized by strength in supply and demand balances, leading to sustained price gains. However, vigilance is needed regarding demand uncertainties from components.

Research provided by Guangda Securities team with detailed data sources referenced in the full report.