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Silicon price soaring, related stocks go straight to the sky

The recent surge in silicon price has driven the stocks of related listed companies to skyrocket, but in sharp contrast with the downstream of the industrial chain, under the sudden increase in raw material costs, some companies have been overwhelmed and broke their contracts.

Today silicon price, the silicone sector continued to rise in the morning, and Tianci Materials’ daily limit, Hesheng Silicon, Jiangsu Cathay Pacific, Sanyou Chemical and other stocks were the top gainers. Since August, the silicone sector has continued to strengthen.

In terms of individual stocks, Tianci Materials, Hesheng Silicon, Share prices of Jiangsu Cathay Pacific, Dongyue Silicon Materials, etc. hit a record high today. Recently, domestic DMC supply tensions have intensified, and prices have risen again. Since August, the spot price of organic silicon has risen sharply. As of today, the average daily price of SMM spot DMC is 33,750 yuan/ton, which is an increase of 2,650 yuan/ton or 8.5% from the previous August 13th of 31,100 yuan/ton. (1 USD = 6.48 Yuan)

At the same time, the surge in silicon prices has caused chaos in the market. According to SMM research, the surge in prices has caused frequent breaches of contracts in the domestic and foreign markets of silicon plants and traders. Some silicon plants have continuously delayed the delivery of low-cost orders.

Another part of the silicon factory simply broke the contract directly, downstream customers could not get the goods, and only needed high prices to find other sources of goods. In addition to the breach of contract due to non-delivery by the silicon plant, the serious upside-down of profit after receiving the order and replenishing the goods is also a major reason for the breach of contract.

silicon price

SMM recently pointed out in the article “Silicon metal has jumped and stabilized at a new 20,000 new mark, with strong supply constraints and strong silicon price rises.” Silicon supply is particularly tight. In the first echelon of price increases, the price of metallurgical metal silicon is driven to rise, and the overall market performance is tight. From the demand side, silicon prices of 441# and 3303# have been flat or surpassed that of aluminum this week. In the future, more specifications of silicon metal will be upside down with aluminum prices.

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The cost of aluminum alloy enterprises has risen sharply, and downstream consumption is sluggish. , Some aluminum alloy enterprises temporarily postpone their purchases. In particular, the primary aluminum alloy plant has suffered a loss in processing fees this week and has begun to reduce production. It plans to only guarantee the supply of long-term customers and abandon bulk customers in the near future. Silicone and polysilicon companies mostly maintain normal purchases.

In terms of transactions in the silicon price spot market, according to SMM research, the average daily price of SMM Tongyang 553# Silicon (East China) today is 21,100 yuan/ton, an increase of 7,150 yuan/ton compared to 13,950 yuan/ton on July 20. 51.3%. In the spot market, high-grade metal silicon led the rise, driving the overall market to continue to rise. There were sporadic high-priced orders in the market, and other silicon factories followed to increase their quotations.

The rapid increase in price is the characteristic of this price increase, and the market has fluctuated. Fast also widened the actual trading range. Silicon factories have acceptable orders, basically no spot available, let alone overstocked inventory. Therefore, even if there are no new orders, it will not affect silicon factories to raise their quotations. The price increase mentality is relatively firm, and downstream and traders’ inquiries are more active. Wait and see The market is mostly.

In the recently issued “Barometer of Completion of Energy Consumption Dual Control Targets in Various Regions in the First Half of 2021”, the provinces whose energy intensity did not drop but increased in the first half of the year included Xinjiang and Yunnan, two major silicon metal supply provinces. In the second half of the year, provinces may implement more stringent energy consumption dual control policies, and the form of power supply is not optimistic.

The start of silicon plants in the second half of the year may be challenged. Regarding the new supply in the second half of the year, because the existing profits of the silicon plant are rare, some of the silicon plants that have been sealed for a long time intend to resume production. According to SMM’s understanding, if all production resumes as planned, it is expected to add new supply in the second half of the year. The amount is around 20,000 tons, which has limited impact on the overall silicon metal supply market.

Regarding future expectations (silicon price), SMM believes that at the beginning of the second half of the year, due to supply problems of raw material silicon coal and other supply problems, the yield of chemical grade metal silicon has plummeted, and the situation of superimposed silicon plants frequently occurs, resulting in tight supply of some grades, especially 421# silicon, and more than half of the wet period. Silicon metal downstream companies have not yet established safety stocks, and the national energy consumption dual control policy is still not optimistic about power supply in the second half of the year.

This directly affects the start-up of silicon metal plants. Except for a small number of conditional zombie production capacity plans to resume production in the second half of the year, existing metals The operating rate of silicon plants cannot continue to increase. In addition to the short-term correction risk, the silicon metal market is expected to maintain an upward trend in the second half of the year, constantly refreshing new historical high prices.

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