At the 10:15 morning break on October 26, China's most-active industrial silicon futures contract, SI2612, was quoted at Yuan 8,660/tonne, up 0.29%. The spot market remained firm, while the futures market traded within a narrow range as expectations of tighter supply and demand-side uncertainty continued to pull in opposite directions.
On the supply side, market sentiment was unsettled by expectations of concentrated production cuts in Southwest China towards the end of October. At the same time, output reductions in the polysilicon sector continued to cloud the demand outlook for industrial silicon. The resulting tug-of-war between expectations of tighter supply and cautious downstream consumption kept market participants cautious, with futures prices moving within a relatively tight band.
Spot market participants maintained a similarly cautious stance. Some upstream plants kept their offers firm, while spot traders reported ordinary shipment activity. Downstream buyers continued to procure only for immediate production requirements.
As of press time, oxygen-blown 553# silicon in East China was quoted at Yuan 9,300-9,400/t delivered and including VAT, while oxygen-blown 421# silicon was quoted at Yuan 9,500-9,600/t on the same basis.
Market participants are closely watching whether the expected production cuts are fully implemented and whether reduced polysilicon output translates into a further slowdown in industrial silicon consumption. In the near term, production-cut expectations are likely to underpin the spot market, but limited downstream buying may cap any further upside. Industrial silicon prices are therefore expected to remain firm but range-bound, with sentiment continuing to react to changes in production-cut announcements and polysilicon operating rates.
Edited by Lucas Wang, wangchenghao@mysteel.com
