Anteco: This week's favorable industrial silicon policy is being implemented, and the period is now linked to a rise

The Zhitong Finance App learned that, according to Antec, the industrial silicon market this week showed a pattern of “futures fluctuating at a high level and spot prices continuing to rise across the board”. Driven by favorable polysilicon policies and continued contraction on the supply side, futures prices once rose to around 8,630 yuan/ton; the spot market broke the stalemate situation for several weeks, market sentiment improved markedly, and prices in various specifications and regions generally increased.

Market performance: Futures fluctuated at a high level, and spot prices continued to rise across the board

In terms of futures, as of the close of August 13, the main 2,609 contract closed at 8,575 yuan/ton, up 150 yuan/ton from 8,425 yuan/ton last week (August 6), or about 1.78%. The market during the week was boosted by policy expectations related to polysilicon. At one point, it hit a high of 8,630 yuan/ton, but then declined slightly. In terms of positions, the main contract position volume on August 13 was about 140,000 lots, down from last week. Some of the funds chose to leave the market profitably.

On the spot side, according to Antec's August 13 quotation statistics, the comprehensive price of industrial silicon nationwide was 8,794 yuan/ton, up 71 yuan/ton from last week. By specification, 553 #报8554元 /ton, 441 #报8839元 /ton, and 421 #报9296元 /ton were up 99 yuan/ton, 42 yuan/ton, and 39 yuan/ton, respectively, from last week. Looking at the subregions, the comprehensive prices in Xinjiang, Yunnan, and Sichuan were 8,624 yuan/ton, 9,673 yuan/ton, and 9,650 yuan/ton respectively, up 88 yuan/ton, 2 yuan/ton, and 50 yuan/ton respectively from last week. In terms of export FOB, 553 #、441 #较上周分别上涨10美元 /ton, USD 5/ton, 3303 #与上周持平。

Judging from the transaction situation, as spot prices stopped falling and rebounded, the enthusiasm for downstream inquiries increased, but actual transactions were still mainly small orders that were just needed, and large-scale inventory replenishment has yet to occur. The partial commercial hedging window was opened, and the upward selling pressure was evident.

Supply side: The scope of production cuts has expanded, and supply continues to shrink

The supply-side contraction trend intensified further this week. The resumption of production during the Fengshui period in southwest China is nearing its end. Some enterprises in Sichuan continue to shut down their furnaces and cut production due to losses, and the pace of Yunnan enterprises resuming production is also slowing down. In terms of major production areas in northwest China, large silicon companies in the Xinjiang region still have maintenance arrangements; Gansu is being suppressed by high electricity prices, and the operating rate of local silicon plants continues to be low; companies in Inner Mongolia, Ningxia and other places continue to cut production, and it is expected that industrial silicon production will decline sequentially in August. Overall, the expansion of the scope of production cuts is gradually hedging production capacity during the flood season and providing positive support for prices.

Demand side: Polysilicon policy boosted, silicone production reduction deepened, aluminum alloy stabilized

Demand-side performance was divided, and favorable polysilicon policies boosted industrial silicon sentiment. In terms of polysilicon, the market was boosted by relevant favorable policy expectations this week, futures prices rose, and industry confidence recovered. However, the current inventory pressure on the industry is still there. Purchases of industrial silicon are mainly on demand, and the actual increase in demand remains to be seen. In terms of silicone, DMC prices rebounded from a low level, but the operating rate of enterprises dropped sharply, demand for industrial silicon was weak, and the contraction effect of production cuts on demand for industrial silicon continued to be unleashed. In terms of aluminum alloys, the operating rate of enterprises has remained stable. Demand for industrial silicon has remained stable, and demand has not changed much from month to month. Overall, the sentiment boost brought about by favorable polysilicon policies has spread to the industrial silicon futures and spot markets, but the increase in downstream substantial procurement has yet to be fully released.

Looking ahead to the future market: policy expectations are underpinned, and spot prices can be expected to rise

Taken together, the industrial silicon market is currently in an active recovery phase of “production reduction implementation and policy support”. The scope of supply-side production cuts continues to expand, and production is expected to decline sequentially in August; favorable demand-side polysilicon policies have boosted market sentiment, and spot prices have followed suit. Although large-scale downstream inventory replenishment has not yet begun, the effects of production cuts and policy expectations are gradually hedging the excess pressure in the early stages, and the bottom of the price is quite clear. In the short term, the effects of production cuts were supported by policy expectations, and prices continued to operate strongly. Focus of attention: changes in spot tracking strength and hedging pressure, subsequent implementation of polysilicon policies, and whether the scope of industrial silicon production cuts can be further expanded.