Source: futures Daily

The Development trend of Silicon Energy Industry in China is getting betterKatsubetbonuscodesIt provides an important support for the stable operation of the national economy and economic transformation. At the same time, industrial silicon futures have been on the market for more than a year, which provides an effective risk management tool for the silicon energy industry chain, and the futures market serves the real economy.

At present, what are the difficulties and pain points of the industrial silicon industry chain? Under the requirements of green development and new quality productivity, how to promote the high-quality development of the industry? Under the new rules, how will the future market of industrial silicon futures be interpreted? Recently, industrial silicon production and trading enterprises and futures industry people from all over the country gathered at the 2024 Annual meeting of China's Industrial Silicon Industry chain to explore the development opportunities of the industrial silicon industry.

Enterprises actively embrace futures tools

"after the listing of industrial silicon futures, we were able to carry out hedging business and transfer the risk of absolute prices. For example, in early January this year, we sold hedging to lock the production capacity of Nujiang International Trade Silicon Industry in the flood season to the high price in the dry season in advance, which not only hedged the risk of price decline, but also obtained better profits. this was impossible before the listing of industrial silicon futures. " When talking about the changes brought to the trading business after the listing of industrial silicon futures, Lin Haiyu, chairman of Xiamen International Trade Nonferrous Minerals, sighed.

It is understood that Xiamen International Trade has been engaged in industrial silicon spot trade for more than 30 years, has a smelter with an annual capacity of 30, 000 tons of industrial silicon in Nujiang, Yunnan, and an industrial silicon mill with an annual capacity of 120000 tons in Baotou, Inner Mongolia. According to Lin Haiyu, thanks to the company's relatively perfect layout in the silicon industry and rich hedging experience accumulated in other varieties, shortly after the listing of industrial silicon futures, Xiamen International Trade actively carried out the hedging business of industrial silicon futures to serve industrial customers. In March 2023, under the circumstances that the price of industrial silicon continued to fall and the sales of spot channels were not smooth, the company successively signed a purchase and sales contract with Nujiang factory for long-term delivery of industrial silicon (delivery in high water season) at the price of low water season. And through hedging means to hedge the risk of price decline, broaden the sales channels of Nujiang Silicon Plant, and achieve better production profits. However, many silicon factories can only face losses because they do not make good use of industrial silicon futures as a risk management tool. It is reported that under the escort of industrial silicon futures, the operating rate of industrial silicon enterprises in Nujiang reached 88% in June 2023, much higher than the operating rate of less than 20% in other producing areas of Yunnan in the same period.

The Futures Daily reporter learned that the cooperation between Xiamen International Trade and Nujiang Silicon Factory is just a microcosm of many industrial silicon production enterprises actively "embracing" industrial silicon futures. According to the person in charge of Guangshi Institute, since the listing of industrial silicon futures, Guangqi Institute has actively carried out market and industrial cultivation, and has studied and launched a number of measures to continuously deepen industrial enterprises' understanding of the futures market. to help industrial silicon enterprises "want to use" and "dare to use" futures. Up to now, the customers of industrial silicon industry have exceeded 1.KatsubetbonuscodesSince 2024, the average daily holdings of industrial silicon futures by corporate customers have exceeded 30%. More than 20 industrial silicon manufacturing enterprises have directly participated in futures trading and delivery, locking in production profits through hedging. At the same time, 105 industrial silicon production enterprises in 13 provinces such as Yunnan, Sichuan, Guangxi, Xinjiang and other provinces have carried out cooperative hedging business with futures companies, which has greatly alleviated the operation under the price downward cycle. As of the SI2404 contract, industrial silicon futures delivered a total of 86000 hands, involving an amount of 6.53 billion yuan, playing the role of delivery connecting the real economy and serving the real economy. At the same time, more than 80% of the cancelled industrial silicon futures standard warehouse receipts went into the photovoltaic industry, playing a positive role in reducing costs and increasing efficiency of the photovoltaic industry.

At the same time, the silicon energy industry is developing rapidly, and its attention and influence are increasing day by day. According to Lin Ruhai, executive vice president of the Silicon Industry Branch of the China Nonferrous Metals Industry Association, after years of efforts, the "proposal to modify the composition of the" Ten Nonferrous Metals "Project submitted to the National Bureau of Statistics was approved. Since 2023, industrial silicon has been included in the statistics of "Ten Nonferrous Metals". In addition, with the support of the significant expansion of the photovoltaic industry, China's industrial silicon production has been increasing in recent years, from 1.45 million tons in 2013 to 3.7 million tons in 2023. Among them, the production of polysilicon has increased from 83300 tons in 2013 to 1.47 million tons in 2023. From the demand side, the downstream demand structure has also undergone significant changes. According to Lin Ruhai, the annual consumption of industrial silicon (including recycled silicon) reached 3.53 million tons in 2023, an increase of 35.2% over the same period last year. Polysilicon accounts for the largest share, accounting for 1.76 million tons, accounting for 50%.

As polysilicon has become the largest consumption field downstream of industrial silicon, the consumption demand of photovoltaic industry has a more significant impact on the development of industrial silicon industry. In order to comply with the current situation of industrial development and improve the depth of the futures market serving the entity industry, Guangqi Institute issued a notice on April 12 to revise the detailed rules of Industrial Silicon Futures and options, mainly revising the delivery quality standards of industrial silicon futures. On April 17th, SI2412, the first contract after the revision of the industrial silicon futures contract, was listed. According to Wang Xinchao, executive manager of the commodity business department of Guangshi Institute, as of April 26, S12412 contract legal person customer participation is better.

"from the perspective of delivery resources, delivery resources across the country have declined slightly in the short term. In the long run, through the selection of raw materials and strict control of production, production enterprises have the ability to improve product quality to meet futures delivery requirements, and the decline in delivery resources is limited. " Talking about the impact of the new rules, Wang Xinchao believes that the problem of mismatch between the demand of polysilicon enterprises and industrial silicon grinding enterprises and futures delivery quality standards can be solved, which will play a positive role in reducing costs and increasing efficiency of photovoltaic industry chain enterprises.

We still face multiple challenges at present.

While seeing the achievements, we should also be soberly aware that the current development of the industrial silicon industry is still facing multiple pressures and challenges. "at present, there are some phenomena in the industrial silicon industry, such as overheated investment, too fierce competition, excessive internal friction and so on, which is not conducive to the development of current industrial enterprises." Lin Ruhai said.

According to Lin Ruhai, before 2021, the market price will fluctuate within a reasonable range and remain stable at 10,000 murals of 13,000 yuan / ton. Especially from 2019 to 2020, the market showed a trend of continuous destocking. However, since 2021, early destocking efforts, rapid growth in polysilicon demand and the implementation of energy consumption control policies have contributed to a sustained rise in prices. Under the influence of the high price and the reservoir effect of the futures market, the inventory of industrial silicon increased significantly from 2021 to 2023. At the same time, new production capacity has been put into operation one after another. Since 2022, the production capacity of new and proposed industrial silicon and polysilicon projects has been more than 5 million tons / year, of which the production capacity of industrial silicon and polysilicon integration projects is close to 3 million tons / year.

As a comprehensive industrial and trade enterprise engaged in the production, R & D, and sales of metal silicon and metal silicon powder earlier in China, and engaged in foreign trade of magnesium ingots, washing coal, petroleum coke, micro-silicon powder and other products, Shi Lanqing, general manager of Zhejiang Zhongcheng Silicon Materials, believes that at present, the periodic oversupply of industrial silicon is mainly affected by factors such as the release of new production capacity and weak downstream demand. Among the three major downstream of industrial silicon, aluminum alloy is currently in a relatively stable state, and the demand for organosilicon has been in a weak state since 2023. In the aspect of polysilicon, due to the recent accumulation of polysilicon, the demand for silicon powder in polysilicon plants is decreasing. Therefore, the price of industrial silicon has been reduced and the stock has been burdened. " Shi Lanqing explained.

As a manufacturer with a state-owned background and earlier engaged in furnace-type production in the industry, Jiang Gansheng, general manager of Eken Silicon Materials (Lanzhou), also admitted that the company has gone through many detours in the accumulation of production experience. At present, the price of industrial silicon is at a historical low, and the price does not reflect the real value of industrial silicon, which restricts the development of high-end industrial silicon and can not reflect the diversification of industrial silicon in production. There has also been a pause and lag in scientific and technological innovation. "at present, 99 silicon is flooding the whole market, and there is limited room for development and innovation of products such as 42Si and 220Si. At the same time, the intelligent development and AI application of industrial silicon are also limited, which is not conducive to the high-quality development of the current industrial silicon industry. " Jiang Gansheng said.

Take Fujian Province as an example, according to Jiang Yuanjin, president of the Silicon Industry Branch of Fujian Metallurgical Industry Association, there are 14 industrial silicon production enterprises in Fujian Province, with a total of 21 ore hot furnaces, with an annual production capacity of about 200000 tons and an actual output of about 120000 tons. "Fujian industrial silicon production has the characteristics of high electricity price, excellent products and low energy consumption. The main products are low iron, low phosphorus, low boron, low titanium and low calcium products." Jiang Yuanjin said that although Fujian industrial silicon has advantages in energy consumption and process, the cost of electricity price in Fujian is higher. For Fujian industrial silicon production enterprises, they should persevere in saving energy, reducing consumption and improving quality in order to survive.

From the price point of view, although the current industrial silicon prices show an overall downward trend, but the mainstream brands of industrial silicon prices have shown signs of stabilization. Take the oxygenation of East China as an example. Data from relevant institutions show that on May 7, the average price of oxygenation in East China was 13750 yuan / ton, down 13.24% from 15850 yuan / ton on January 2, but the quotation has been maintained at 13750 yuan / ton for nine consecutive working days since April 19. From the market price, industrial silicon futures main contract SI2406 hit a new low of 11479 yuan / ton on April 22, began to show a shock recovery trend.

Lin Ruhai believes that according to previous years' experience, although the output of Yunnan and Sichuan will increase significantly during the rainy season, the current price is not only lower than the cost of many small and medium-sized enterprises in Xinjiang, but also reaches the production cost line of Yunnan and Sichuan, and there is little room for prices to continue to fall. From the first quarter of 2024, industrial silicon downstream enterprises showed a state of destocking, and market prices also fell sharply after the Spring Festival. In this regard, Lin Ruhai believes that the main reason is that the market demand for polysilicon is not optimistic.

Maintain the ability of continuous innovation

How should the market face the pressure and challenges faced by the industrial silicon industry and promote the high-quality development of the industry? Chen Quanxun, consultant and former president of the China Nonferrous Metals Industry Association, believes that: first, we should always adhere to scientific and technological innovation and develop new productive forces; second, we should always adhere to green development and cultivate a green foundation for high-quality development; third, we should always strengthen the self-discipline behavior of industry enterprises and build a good ecology for industrial development; fourth, we should always adhere to bottom-line thinking and improve our ability to resist risks.

"Silicon energy industry is an emerging industry, a green industry, and it is also an industry that meets the current conditions of new quality productivity." Lin Ruhai believes that the healthy development of the silicon industry requires the joint efforts of all parties. At the national level, it is necessary to control the threshold for entering this track and set a certain threshold for entry according to the level of technology, energy consumption and environmental protection; from the industry level, it is necessary to conduct more research and grasp the development trends of the industry. fully understand the situation of industry enterprises in technology, energy consumption, environmental protection, efficiency and other aspects, and provide a reference basis for government departments to make decisions. From the enterprise level, it is necessary to think rationally about whether to invest when the industry is overheated.

"there is still a lot of work to be done in all aspects of the silicon industry chain, such as product performance improvement, cost reduction, production safety, green development, intelligent manufacturing and so on." Lin Ruhai suggested that a healthy competitive environment should be created to maintain the ability of sustainable innovation. Only by keeping a reasonable gross profit margin in each link can the corresponding head enterprises have the ability to maintain innovation, and the industry can develop continuously and healthily, thus contributing to the smooth realization of the goal of "double carbon". At the same time, enterprises should also actively adapt to the changes of the market situation, train professionals, be familiar with futures rules, and make full use of futures and other risk management tools. In addition, we can also establish a comprehensive evaluation system for the competitiveness of enterprises, regularly comprehensively evaluate the data of production technical and economic indicators, environmental protection, energy saving and emission reduction, and comprehensive utilization, and release advanced level index data. take it as the basis for the government to carry out differential electricity prices, sequential power outages and capacity withdrawal, and support advanced enterprises to do better and bigger and stronger.

As a leading enterprise in the domestic supply chain, Cai Yingbin, president of Xiamen International Trade, said that in recent years, new situations and changes continue to emerge in the global economic cycle, the macro environment at home and abroad is complex, and modern supply chain reconstruction is accelerating. The new energy industry is considered to be an important position for the development of new productivity, and industrial silicon, as an important basic material of silicon energy, will play a more and more important role in the future. According to its introduction, the operation scope of Xiamen International Trade covers the upstream and downstream areas of industrial silicon, including organosilicon, polysilicon and aluminum alloy, and can provide customers with trade and processing services from industrial silicon blocks to industrial silicon powder. and provide customized integrated services according to customer needs. In the future, Xiamen International Trade will maintain a long-term and stable cooperative relationship with major leading aluminum alloy and silicone enterprises at home and abroad, contributing to the enhancement of China's industrial silicon global pricing influence.

As for the furnace type that is newly put into production, Shi Lanqing believes that at the initial stage of construction, it is necessary to reflect the requirements of green development and new quality productivity, give priority to environmental protection, and at the same time embody the concept of intelligent operation, integrate AI technology, make production operation more intelligent, rapidly improve the level of domestic production operation, and walk in the forefront of the world. In addition, the silicon factory wants to make different characteristics and move towards high-quality development in the future. The furnace type newly put into production should not be simply copied, but should be based on the characteristics of the factory and the raw material cost of the region. For different industries, different customers, to produce specialized products suitable for customer needs, in order to increase higher added value for enterprises, in exchange for greater living space.

"the new furnace type in the future should reflect the requirements of new quality productivity, and green development should be used to realize the high-quality development of industrial silicon." Jiang Gansheng suggested that in the new furnace type, the design should reflect the concept of environmental protection, pay attention to the collection of smoke and dust, and ensure the green development and high-quality development of the industry. "of course, high-quality development is also inseparable from scientific and technological innovation." Jiang Gansheng called for a rational return to the price of industrial silicon, so that production enterprises have more capital and energy to invest in the development and innovation of science and technology.

It is worth noting that after the listing of industrial silicon futures, although many small and medium-sized production enterprises are actively involved in hedging business, some large enterprises are not deeply involved. From the perspective of high-quality development, Lin Haiyu believes that for production enterprises, participating in hedging business is the key link to transfer risks and achieve safe operation. In the process of future development, it is hoped that large enterprises can more actively participate in the hedging business of industrial silicon, so as to lay a solid foundation for the high-quality development of enterprises.

Analysts: inventory pressure will be further revealed in the second quarter.

On April 17, the industrial silicon futures SI2412 contract was officially listed. On the first day of listing, the opening price of the contract was 14200 yuan / ton, the highest price was 14500 yuan / ton, the lowest price was 13980 yuan / ton, and the fluctuation on the first day was less than 4%, which was basically in line with market expectations. As of May 7, the SI2412 contract fell 0.31% to 14590 yuan / ton.

From the point of view of the monthly spread, the first trading range between the SI2412 contract and seven old contracts is stable at 2100mur2500 yuan / ton. "the subject matter of SI2412 contract trading is likely to be oxygenated SI5530, while the target of SI2411 contract trading is still SI4210, but the original warehouse receipt needs to maintain basically the same price as 99 silicon in order to circulate to the spot market. Therefore, in theory, the trading target of SI2411 contract should be 99 silicon (or oxygenated SI5530), which represents a natural price difference of 2000 yuan / ton between SI2411 contract and SI2412 contract." Zhang Hang, a senior analyst at Guotai Junan Futures, believes that taking into account the centralized cancellation system of warehouse receipts at the end of November, the price difference between SI2411 contracts and SI2412 contracts is expected to be 2500 yuan / ton.

Wang Yanqing, a futures analyst at CITIC Construction Investment Fund, believes that the revision of the business rules of industrial silicon futures has almost no impact on the old contract, and the change in the trend of the old contract needs to pay more attention to the supply and demand pattern in the past half a year. However, considering that the price of industrial silicon has fallen below the production cost line of some enterprises, the subsequent decline of industrial silicon futures is limited. For the old contract, the follow-up may show the trend of bottom shock operation. At present, the basic supply of industrial silicon is strong and demand is weak, especially the polysilicon and organosilicon industry is in an industry trough, it is difficult to support the price of industrial silicon.

On the supply side, as of the week ended April 30, the weekly production of industrial silicon increased and social inventory remained high. Data from relevant institutions show that some factories in Fujian, Gansu and Guangxi have resumed production, and the overall weekly output of industrial silicon has increased by 2000 tons from the previous month to 84800 tons. In addition, the new production capacity in Ruoqiang region of Xinjiang continued to be put into production in May, providing marginal increments. From the perspective of start-up, the profits and start-up of the southwest region (12% of weekly output) are already on the low side, and the expected resumption of production in May is expected to increase. The inventory of factory depots in Xinjiang has been eliminated again this week, the inventory pressure has been reduced, and the main local silicon factories are expected to maintain high operating rates.

The performance on the demand side is weak. Specifically, in terms of polysilicon, the weekly price of silicon continues to fall, and some silicon factories plan to start maintenance in the second quarter. According to statistics, the silicon production capacity currently planned to be overhauled in the second quarter is 100000-120,000 tons / year, and it does not rule out the possibility that more enterprises will enter the maintenance sequence, and the subsequent purchase of industrial silicon will be reduced marginally. However, 200000 tons of new production capacity of Tongwei Baoshan began to be put into production in early May, and overall polysilicon production is expected to change little in May compared with April. Zhang Hang believes that on the whole, the purchase of industrial silicon by silicon factories is expected to be difficult to boost prices.

Organosilicon, mainly to digest raw material inventory, DMC price is relatively weak. In this regard, Zhang Hang believes that on the one hand, it affects its purchasing mentality of industrial silicon, and on the other hand, it affects the production progress of new production capacity.

In terms of aluminum alloy, mainstream aluminum alloy factories still maintain a rigid demand for industrial silicon, and there is no phenomenon of centralized hoarding.

Export market (13%) continues to be weak, industrial silicon exports increased in March, but export prices did not rise significantly, overseas customer procurement is still dominated by rigid demand.

With regard to the trend of SI2412 and subsequent contracts, Wang Yanqing believes that from the demand side, downstream industries such as polysilicon and organosilicon still have large room for growth, and as the economy gradually recovers, the demand for industrial silicon will continue to grow in the future, bringing long-term support to industrial silicon prices. Therefore, the future industrial silicon futures prices are expected to usher in a rebound.

"similar to 2023, the industrial silicon industry in 2024 is also in the industry logic of" high upstream start-up + downstream de-storage + raw material price reduction + capacity expansion in low-cost areas ". The corresponding silicon price is still in the overall downward cycle in the first half of the year." Zhang Hang believes that as far as the second quarter is concerned, the supply end is shrinking, but considering the "resilience" of the southwest silicon plant in the flood season, supply is expected to remain at a high level, while downstream polysilicon and organosilicon are still in the pattern of overcapacity, it is more difficult to transfer their own profits to the upstream, and downstream negative feedback is gradually realized. Based on this, it is expected that the second quarter of industrial silicon inventory pressure will be further revealed, corresponding to SI2412 contracts or more price flexibility.