SMM

In October, spot silicon metal prices stopped falling and began to slowly rebound. On the supply side, sellers were reluctant to sell, leading to firm quotations, while on the demand side, buyers were cautious and restocked as needed. As a result, the recent silicon metal market has seen low trading volume and slight increases in unit prices.

From the fundamentals, the industry experienced destocking in Q1. By the end of Q2 and into Q3, with the resumption of production in silicon enterprises in Sichuan and Yunnan and the decline in the operating rate of downstream polysilicon, the industry began to see rapid inventory buildup. In Q3, the nationwide silicon supply was 364,000 mt (including silicon metal (Si≥97%), secondary silicon, and other silicon supplies). From January to October, the supply was 546,000 mt.

Overall, it is estimated that the total inventory of the entire industry, including upstream, traders, and downstream users, exceeds 1 million mt. From the inventory distribution structure, it is expected that more than 60% of the goods are in the intermediate trade, with a large portion hedged or non-standard hedged. The inventory levels at upstream factories vary, with silicon enterprises in Sichuan and Yunnan holding inventory but reluctant to sell due to production halts during the dry season. The characteristics of inventory distribution, combined with the transition from the wet to dry season in the southwest, favorable macro policies, and the conversion of new and old futures contracts, have led to tight spot cargo liquidity recently.

Downstream silicon users maintain a stable sentiment, and traders, considering profits and funding costs, are cautious in spot operations, resulting in limited silicon price fluctuations.