Guangfa Futures Research Era Fei Z0013180
On May 24, 2024, Industrial silicon Futures prices rose rapidly. The price of the main contract SI2407 once rose to nearly 13000 yuan/ton, up about 4.5% by 2 p.m. Recently, under the pressure of the drop in spot price and the increase of polysilicon maintenance and production reduction enterprises, industrial silicon futures have seen a relatively strong rise, and the basis has weakened rapidly, or it is related to the increase in buying of bulk commodities with low absolute prices of industrial silicon, but the fundamentals are still weak. However, it should be noted that the opening of the arbitrage window may also increase the hedging volume. The position has gradually increased. At present, the position of SI2406 contract is about 17000, the position of SI2407 contract is about 130000, and the number of warehouse receipts is about 54000.
Main driving factor: favorable macro atmosphere, bulk commodities driving industrial silicon price
Recently, there have been some new macro changes in the market. Bulk commodities, especially the nonferrous metals market, have performed well and played a certain role in driving the price of industrial silicon. On the one hand, the recent macro warming, the introduction of domestic real estate stimulus policies, the increase of interest rate cut expectations in the United States, the superposition of geopolitical crisis led to a stronger risk aversion, the general strength of metal prices, which led to the recovery of industrial silicon prices; On the other hand, some investors believe that the price of industrial silicon futures has dropped to near the cost end, and the downward space is small, so they are willing to arrange more orders. In addition, the current position is relatively high. The main contract SI2407 has about 130000 positions. At present, the number of warehouse receipts is about 54000. The position order ratio exceeds 2. Although the impact was not significant before, it may be difficult to generate so many warehouse receipts in the short term. In the process of price rise, hedging enterprises need to pay attention to position management in the early stage.
Fundamentals: supply growth is faster than demand growth, putting pressure on spot price of industrial silicon
From the perspective of supply, industrial silicon output is expected to continue to grow in May. On the one hand, 100000 tons of industrial silicon capacity is planned to be put into production in Xinjiang in May, and the release of new capacity will bring some output growth; On the other hand, in May, when the southwest region entered the wet season, the power supply was abundant, and the silicon enterprises in Sichuan began to resume production slowly. Enterprises in Sichuan have resumed production in succession. The operating rate in Sichuan has picked up significantly, and Xinjiang is close to full production. According to SMM, as of May 17, the total output of three major producing areas in Xinjiang, Yunnan and Sichuan has reached 49100 tons, a record high.
From the perspective of demand, polysilicon, as the core growth point of industrial silicon demand (accounting for about 45%) before, has dropped to almost the whole industry's loss with the rapid decline of capacity release price. Except for the average price of N-type material, which is still around 42.5 yuan/kg, other products have dropped below 40 yuan/kg. In May, several polysilicon enterprises reduced their production after maintenance. Although the release of Tongwei Baoshan's production capacity in May can supplement the market's production, with the price weakening, the summer also coincides with the maintenance period. After the price falls below the cost line, enterprises tend to carry out maintenance in advance, and it is expected that the number of maintenance enterprises in the later period will further increase. For the demand side of industrial silicon, the demand growth in May slowed down or even slightly decreased.
Therefore, from the perspective of supply and demand, it is highly probable that supply growth will exceed demand growth in May or even 2-3 quarters. Inventory is expected to continue to accumulate, and price expectations will be pressured around cost changes.
Price structure: pay attention to the impact on future price after the arbitrage window is opened
Although the macro positive expectation supports the strengthening of futures prices, in fact, the spot price has continued to decline recently, and the basis has also weakened rapidly. The arbitrage window has been opened, and attention should be paid to the impact of the opening of the arbitrage window on futures prices. On May 23, according to SMM statistics, the average price of oxygen connected Si5530 industrial silicon market in East China was 13100 yuan/ton, down 100 yuan/ton this week, and the average price of Si4210 industrial silicon market was 13600 yuan/ton, down 150 yuan/ton this week. As for the main industrial silicon contract SI2407, as of 2 o'clock, the quotation was about 12750 yuan/ton, and the basis difference between East China Si4210 and the main contract fell to about -1150 yuan/ton. The risk-free arbitrage window for buying spot and selling futures was opened, and attention should be paid to the change of hedging on the market, which may put pressure on the market.
Future prospects:
In general, although the spot price of the industrial silicon market has fallen due to the weakening demand due to the increase in supply, the forward price has risen slightly under the influence of the positive macro expectation. The difference between the reality and expectation has led to the decline of the spot price and the strengthening of the futures, which has led to the sharp weakening of the basis. It is not necessary to pay attention to whether the actual changes on the demand side can support the strengthening of the price in the far month, Otherwise, the increase of hedging order may bring a certain downward pressure to the order. In addition, considering the high volume of warehouse receipts and positions, hedging enterprises in the early stage need to pay attention to position management in the process of price rise.
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Editor in charge: Li Tiemin
