Polysilicon capacity release at the end of the fourth quarter or pull industrial silicon demand
2023/7/4
At present, the southwest region has entered the water period, according to the law of previous years, local producers will gradually resume production, but most of the first half of Yunnan is relatively dry, triggering market concerns about the postponement of the water period. In addition, because of the last two years in the southwest during the water supply has been unstable, so the southwest region can promote the resumption of production as scheduled to become a hot spot of market concern. From the perspective of power supply, thermal power supply is sufficient, hydropower is expected to come as scheduled, and supply stability is expected to be strong. In terms of thermal power, the supply of power coal is loose, social inventory is at a historically high level, and the probability of coal shortage occurring without substantial production cuts on the supply side is relatively small. In terms of hydropower, in mid-to-late June, many places in southern China received large rainfall. Among them, the cumulative rainfall in Yunnan is more than the level of the same period in previous years to more than 40%, and is expected to enter the abundant water period in July.
From the industrial silicon supply side, the resumption of production in the southwest is expected to be more certain, overlaid with new capacity to put, while regenerated silicon back to make up for the supply, the overall supply increment more. First of all, the southwest production area gradually into the abundant water period, electricity prices have been reduced, the local plant has substantial resumption of production operations. At present, the local rainfall has arrived, July is expected to fully enter the water period, the plant is expected to maintain the rhythm of resumption of production, supply recovery is expected to be more certain. Secondly, in the context of policy support for new "integrated" capacity, more than 1 million tons of new planning projects waiting to be put into operation during the year, the subsequent supply increment is large. Finally, as polysilicon production continues to increase, the production of recycled silicon continues to improve, which has become an important part of the supply can not be ignored, effectively replenishing the supply.
From the industrial silicon demand side, polysilicon demand increment is more certain, but capacity release still needs time, the rest of the consumer sector overall weak. Specifically, polysilicon, the second half of the planning capacity of more than 1 million tons, the current production profits have declined significantly, the production time or delayed, but more projects have been in the state of construction, after a lot of money invested, it is expected that the subsequent production certainty is still strong, but also will be the core incremental demand pull. Silicone, the domestic policy on real estate support has been increasing, the housing liquidity crisis is expected to be eased, the marginal demand for silicone is expected to improve. For aluminum alloy, after June, the downstream of aluminum alloy will enter the consumption off-season, and the start-up may be slightly weakened, and the production growth rate is expected to drop in the third quarter. In terms of exports, in the context of high interest rates overseas, the overall pressure on the overseas economy will still suppress industrial silicon exports, but also need to pay attention to overseas interest rate hike cycle or near the end, the subsequent marginal improvement in exports may exist.
Overall, the expected resumption of production in the southwest in the third quarter is more certain, the supply of loose pattern for the time being difficult to improve, but the industrial silicon futures prices have fallen to more plants in the cost of abundant water period, taking into account the policy boost in the downstream demand is expected to be repaired, industrial silicon prices are expected to oscillate stronger. However, at the end of the fourth quarter, the full release of polysilicon production capacity or pull industrial silicon demand, and the southwest region into the dry period, when the industrial silicon supply and demand pattern is expected to be greatly improved.
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