Recently, the bidding for silicon metal powder in polycrystalline silicon factories has almost come to an end, and other downstream factories of silicon metal have also completed stocking before the National Day holidays. The market’s sustained price increase has weakened support, and some traders are also actively shipping profit orders. However, the upstream and downstream of the industrial silicon market continue to be bullish towards the future.
The current bearish news comes from the cancellation of warehouse receipts and the influx of goods from the delivery warehouse into the spot market, which has impacted the price decline. However, the Futures market is highly variable, and the supply of goods entering the spot market is limited.
There is a lot of positive information about the silicon metal market.
Firstly, silicon metal raw materials costs rise, and products such as petroleum coke, silicon coal, and electrodes have all started to rebound after a decline. Producers have a strong desire to raise prices.
Secondly, the abundant water period in Sichuan and Yunnan almost has past, and in November, electricity costs is expected to increase. Only by covering the increased costs with profits can factories continue to operate at high level.
The third reason is that the resumption of production in large factories is not as expected, and it will take some time for production to increase. There are also many pre-sale orders, and the cycle of accumulating inventory to high inventory pressure after subsequent resumption of production is longer.
The fourth is that from June to July, large factories have bottomed out, while small factories have not followed suit. The probability of factories reducing or stopping production due to poor sales in the future is more than the probability of factories selling at low prices.
