Keywords: Industrial silicon, weak demand, inventory pressure, cost support, latest price, hydropower, production restriction
Core Sentence: Industrial silicon runs weakly with sluggish downstream demand and high inventory, but the cost support from high electricity prices and raw materials has strengthened, and the price fluctuation range has narrowed.
On March 31, the domestic industrial silicon market maintained a weak fluctuation pattern, with no obvious improvement in supply and demand, but the price fluctuation range narrowed due to cost support. The mainstream quotation of spot 421# metal silicon was 9,700–10,000 RMB/ton, slightly up from the previous trading day, and the actual transaction price had a certain negotiation space. The main futures contract (SI2605) closed at 8,480 RMB/ton, down 185 RMB/ton from the previous day. As of mid-March, the mainstream quotation of 421# industrial silicon was 9,600 RMB/ton, and the price has remained in a narrow range recently[superscript:4].
On the supply side, the operating rate of industrial silicon enterprises in the north and south regions is basically stable, with an overall operating rate of about 65%. Yunnan and Sichuan are affected by the high electricity prices in the dry season, and the operating rate remains low, with enterprises having no strong willingness to resume production; large factories in Xinjiang maintain stable production, with no large-scale production increase or reduction plan, so the overall supply is stable. On the demand side, the downstream demand is still weak: organic silicon monomer factories mostly rely on self-supplied industrial silicon, with limited external procurement; polysilicon enterprises continue to reduce production and load, and the procurement volume of industrial silicon is significantly reduced, which is the main factor restricting the improvement of industrial silicon demand. In addition, the news of rising electricity prices in Xinjiang has boosted market sentiment recently, providing certain support for industrial silicon prices[superscript:8].
In addition, the high inventory level of industrial silicon also brings great pressure to the market. According to statistics, the current domestic industrial silicon inventory is about 150,000 tons, and the inventory turnover cycle is about 1.5 months. Market feedback shows that some small and medium-sized industrial silicon enterprises have been under pressure due to insufficient orders, and even suspended production temporarily. Industry analysts expect that the industrial silicon market will continue to operate weakly in the short term, with the price mainly fluctuating in a narrow range. The price will not have obvious upward momentum until the downstream organic silicon and polysilicon demand recovers significantly and the cost support further strengthens.
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