1. Report's Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The demand for industrial silicon may weaken significantly in Q1 2026 due to potential joint production cuts by silicone enterprises during the off - season and the inevitable production cuts in the polysilicon industry as "anti - involution" progresses. If the northwest silicon plants maintain their current operating rates, industrial silicon is likely to accumulate inventory in Q1 2026 [4][41]. - The short - term futures price of industrial silicon may rebound, with a support level for decline at around 8000 yuan/ton and a resistance level for rebound between 8600 - 8800 yuan/ton. In Q1 2026, after the demand weakens and the factories accumulate large - scale inventory, the futures price may fall to near the cash cost line of northwest power - purchased silicon plants, with a low price reference of 7400 - 7500 yuan/ton [5][43]. - The recommended strategies are to potentially see a short - term rebound and short at high prices in the medium term for single - side trading, and to go long on polysilicon and short on industrial silicon for arbitrage [6][44]. 3. Summary According to the Directory 3.1 Preface Summary 3.1.1 Supply - Demand Outlook - In December 2025, polysilicon and silicone have no plans to cut production. After the southwest silicon plants cut production at the beginning of the month, industrial silicon inventory accumulated but the amplitude was not significant. In Q1 2026, the off - season of silicone terminal demand may trigger joint production cuts by silicone enterprises, and production cuts in the polysilicon industry are inevitable as "anti - involution" advances, leading to a significant weakening of industrial silicon demand. On the supply side, silicon plants in Yunnan and Sichuan have little room to cut production, while northwest plants have low inventory and high operating rates. If they maintain the current rates, industrial silicon will likely accumulate inventory in Q1 2026 [4][41]. 3.1.2 Trading Logic - When the futures price is below 8500 yuan/ton, northwest silicon plants have little profit from warehouse delivery. Currently, with low inventory, their willingness to support prices is strong, and it may be difficult to repeat the negative feedback between futures and spot prices in May and June. The short - term support level for decline is 8000 yuan/ton, and the price may rebound to repair the basis, with a resistance level between 8600 - 8800 yuan/ton. In Q1 2026, after the demand weakens and large - scale inventory accumulation occurs, negative feedback conditions will be met, and the futures price may fall to near the cash cost line of northwest power - purchased silicon plants, with a low price reference of 7400 - 7500 yuan/ton [5][43]. 3.1.3 Strategy Recommendation - Single - side trading: There may be a short - term rebound, and short at high prices in the medium term. - Arbitrage: Go long on polysilicon and short on industrial silicon [6][44]. 3.2 Fundamental Situation 3.2.1 Analysis of the Driving Factors of the Recent Sharp Decline - The sharp and rapid decline of industrial silicon futures in recent days is due to both fundamental factors and market sentiment. Key reasons include the decline in industrial silicon exports since October, inventory accumulation during the dry season after the near - full operation of the leading manufacturer's Shanshan capacity, concerns about cost collapse due to the sharp decline of coking coal futures, and the negative impact on industrial silicon demand from the inevitable large - scale production cuts in the polysilicon industry as "anti - involution" progresses [9]. 3.2.2 December Demand is Acceptable, but Q1 2026 Demand is Expected to be Poor - **Silicone (DMC)**: Since 2022, the traditional construction industry has been sluggish, and the photovoltaic industry has also declined since 2025, reducing the demand for silicone. The silicone monomer industry has been in surplus since new capacities were put into operation in H2 2024, and DMC prices have been falling. After the call for joint production cuts in February 2025, the production of silicone monomers has gradually decreased, and factory inventories have been reduced. In December 2025, the DMC operating rate is expected to be flat compared to November, but in Q1 2026, the off - season of terminal consumption may trigger joint production cuts and reduce the demand for industrial silicon [16][17]. - **Polysilicon**: The demand for polysilicon is likely to weaken in Q1 2026 and may improve after March. If polysilicon enterprises maintain their December production schedule, the industry will accumulate 90,000 tons of inventory in three months, with a cash occupation of nearly 4 billion yuan. Given the continuous losses and high inventory, some enterprises need to cut production, and Q1 2026 is the most suitable time [25]. - **Aluminum Alloy**: In Q1 2026, the demand for aluminum alloy may weaken marginally, and seasonal production cuts by aluminum alloy enterprises may lead to a slight decline in the operating rate. The export of industrial silicon may gradually recover in Q1 2026, and the December export volume may be between that of September and October [28]. 3.2.3 Production Cuts by Northwest Silicon Plants in Q1 2026 Due to Losses are Needed to Restore Supply - Demand Balance - As of December 4, 2025, the number of operating furnaces in Yunnan and Sichuan has decreased, and they have little room to further reduce the operating rate in Q1 2026. The monthly production of industrial silicon in the four northwest provinces has reached 354,000 tons. If production is not cut, the oversupply situation will continue. The full cost of northwest power - purchased silicon plants is 8300 - 8600 yuan/ton, and Xinjiang power - purchased silicon plants need a futures price above 8500 yuan/ton to break even [35]. 3.2.4 The Current Inventory Structure Does Not Support a Deep Decline in the Futures Price, and Further Inventory Accumulation is Needed - The current visible inventory of industrial silicon is 970,000 tons, including 558,000 tons of social inventory, 185,100 tons of inventory in sample enterprises in Xinjiang, Yunnan, and Sichuan, and 230,800 tons of downstream raw material inventory. Southwest silicon plants will not sell below cost after shutting down, and only a few northwest manufacturers have inventory pressure. With high intermediate inventory and concentrated ownership, the basis is difficult to weaken. It is difficult to repeat the negative cycle between futures and spot prices in May and June. Only after further inventory accumulation, when futures price decline squeezes the sales space of manufacturers and forces them to cut prices, can the negative cycle occur [38][39]. 3.3 Future Outlook and Strategy Recommendation - **Supply - Demand Outlook**: In December 2025, polysilicon and silicone have no production - cut plans. After production cuts by southwest silicon plants at the beginning of the month, industrial silicon inventory has accumulated but the amplitude is not significant. In Q1 2026, the demand for industrial silicon may weaken significantly due to potential production cuts in the silicone and polysilicon industries. If the northwest silicon plants maintain their current operating rates, industrial silicon is likely to accumulate inventory [41][43]. - **Trading Logic**: When the futures price is below 8500 yuan/ton, northwest silicon plants have little delivery profit. Currently, with low inventory, they are strongly willing to support prices, and it is difficult to repeat the negative feedback between futures and spot prices in May and June. The short - term support level for decline is 8000 yuan/ton, and the price may rebound to repair the basis, with a resistance level between 8600 - 8800 yuan/ton. In Q1 2026, after the demand weakens and large - scale inventory accumulation occurs, the futures price may fall to near the cash cost line of northwest power - purchased silicon plants, with a low price reference of 7400 - 7500 yuan/ton [5][43]. - **Operation Strategy**: Single - side trading: Short - term rebound is possible, and short at high prices in the medium term. Arbitrage: Go long on polysilicon and short on industrial silicon [6][44].

1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - The price of industrial silicon has seasonal inventory accumulation and depletion, but compared with the industry inventory of over 1 million tons, the fundamental contradiction is not obvious. After the previous hedging, short - term price decline is difficult to cause production cuts, but the price needs to break through 10,000 yuan/ton to bring obvious supply increments in the dry season or the next wet season. With the cost floor identified, the lower limit of the industrial silicon price may be clearer. In Q4, the main contract is expected to trade in the range of 8,000 - 10,000 yuan/ton, and it is recommended to focus on the opportunity of buying on dips at the lower end of the range [78]. 3. Summary by Relevant Catalogs 25Q3 Market Review - In 25H1, the price of industrial silicon dropped significantly due to inventory accumulation during the dry season, resumption of production by large manufacturers, and cost collapse driven by falling coal prices. In 25Q3, the price rebounded sharply due to the continuous strengthening of the basis, outflow of warehouse receipts, lower - than - expected resumption of production by large manufacturers, and the "anti - involution" trading. After the "anti - involution" trading declined, the price fluctuated between 8,200 - 9,200 yuan/ton [3]. Cost Analysis - **Electricity Price**: The cost floor in terms of electricity price has emerged. In Xinjiang, self - supplied electricity is about 0.2 yuan/kWh, and subsidized purchased electricity is about 0.3 yuan/kWh, with 0.35 yuan/kWh in Yili. In Yunnan, the electricity price rises slightly in the normal - water period in October and increases by 0.15 - 0.2 yuan/kWh in the dry season from November to December. In Sichuan, the electricity price rises by 0.05 - 0.1 yuan/kWh in the normal - water period in November and by 0.16 - 0.21 yuan/kWh in the dry season in December compared with the wet season [8][10]. - **Raw Materials**: The cost floor for raw materials has also emerged. The cash cost of self - supplied electricity in Xinjiang is 6,800 yuan/ton, and that of purchased electricity is 7,800 yuan/ton. The cash cost in the wet season in Sichuan is 8,500 - 9,100 yuan/ton, and in Yunnan, it is 9,900 yuan/ton. In the dry season, the cash cost in Baoshan is 11,500 yuan/ton, and in other south - western regions, it is 12,500 yuan/ton [22][23][30]. Supply Analysis - **Seasonal Production Cuts**: In the dry season, the supply elasticity is weakened by hedging. Xinjiang's large manufacturers plan to increase the number of furnaces in the eastern base to 50, and may further increase to 60. Yunnan and Sichuan will start production cuts at the end of October, with Yunnan's operation possibly dropping to more than 20 furnaces and Sichuan's to about 35 furnaces. Inner Mongolia's polysilicon integrated and self - supplied electricity - advantaged capacities are operating at full capacity. In Gansu, the operation is expected to change little [31]. - **Potential Supply Pressure**: There are many built - but - not - yet - commissioned capacities, posing a large potential supply pressure. Newly commissioned capacities include Tongwei Baotou, Tongwei Guangyuan, Xin'an Yanjin, and Yongchang Silicon Industry. Built but postponed commissioning includes Qiya Silicon Industry, Qinghai Hongshi, Hesheng Zhaotong, Trina Solar, and Shangnan Zhongjian [37][38]. Demand Analysis - **Polysilicon**: After the "anti - involution" trading, the mainstream transaction price of dense materials from first - tier enterprises rose to 50 - 52 yuan/kg, with a net profit margin of over 10%. The upstream factory inventory is 20 - 21 million tons, mainly concentrated in leading enterprises. The downstream raw material inventory is over 2 months. From January to September 2025, the polysilicon output was 951,000 tons, a year - on - year decrease of 33%. Considering the dry - season production cuts and the resumption expectations of some enterprises, the polysilicon production schedule for Q4 2025 is expected to be 376,000 tons, a year - on - year increase of 8% [50]. - **Organic Silicon**: The real estate market remains weak. In terms of photovoltaic, from January to September, the domestic component output of Chinese enterprises was 412.3GW, a year - on - year increase of 4%. Considering the weakening demand, the production schedule for Q4 2025 is expected to be 136GW, a year - on - year decrease of 3%. For new - energy vehicles, from January to August, the sales volume was 9.592 million, a year - on - year increase of 36%. Due to the high base in Q4 last year, the annual growth rate is adjusted down to 24%, with a year - on - year increase of 9.5% in Q4. In terms of exports, from January to August, the export volume of primary - form polysiloxane was 373,000 tons, a year - on - year increase of 1%. However, the US tariff adjustment is expected to reduce exports to the US. From January to August, the output of organic silicon intermediates was 1.653 million tons, a year - on - year increase of 18%. The production of organic silicon DMC in Q4 2025 is expected to be 677,000 tons, the same as the previous year [51][62][68]. - **Aluminum Alloys and Exports**: From January to August, the output of primary aluminum alloys was 941,000 tons, a year - on - year increase of 1%, and the output of recycled aluminum alloys was 4.056 million tons, a year - on - year increase of 4%. Q4 is the seasonal peak season for aluminum alloys. Aluminum plants mainly purchase industrial silicon as a rigid demand, buying on dips and consuming inventory at other times. The demand for industrial silicon from aluminum alloys in Q4 2025 is expected to be 230,000 tons, a year - on - year increase of 5%. From January to August, the export of industrial silicon was 490,000 tons, a year - on - year increase of 30% [69]. Supply - Demand Balance and Price Outlook - **Supply - Demand Balance**: On the supply side, with Xinjiang's large manufacturers' eastern base operating 50 furnaces, the operating rate in the southwest drops significantly in the dry season. On the demand side, polysilicon production is affected by dry - season cuts and some enterprises' resumption, organic silicon production remains the same year - on - year, and aluminum alloy demand increases slightly year - on - year. Inventory accumulates in October, and about 50,000 tons are depleted from November to December in the dry season. However, if Xinjiang's large manufacturers fully resume production, it may be difficult to deplete inventory in November and only a small amount will be depleted in December [73]. - **Price Outlook**: The lower limit of the industrial silicon price may be clearer with the cost floor identified. The main contract in Q4 is expected to trade in the range of 8,000 - 10,000 yuan/ton [78].

Report Information - Date: September 3, 2025 [2] - Research Team: Energy and Chemical Research Team [3] - Researchers: Li Jie, Ren Junchi, Peng Haozhou, Peng Jinglin, Liu Youran, Feng Zeren [1][3] 1. Report Industry Investment Rating - No relevant content provided. 2. Core View of the Report - The industrial silicon market is in a state of supply - demand imbalance. The supply has increased significantly, while the demand has no obvious growth. The market is expected to have wide - range oscillations, and attention should be paid to the support level at 8200 yuan [4]. 3. Summary by Directory 3.1 Market Review and Outlook - **Market Performance**: The industrial silicon futures price fluctuated. The Si2511 closed at 8470 yuan/ton, up 1.13%. The trading volume was 345,613 lots, and the open interest was 281,480 lots, with a net decrease of 3,969 lots [4]. - **Spot Price**: The industrial silicon spot price started low and ended high, fluctuating. The Sichuan 553 price was 8900 yuan/ton, Yunnan 553 was 8550 yuan/ton, Inner Mongolia 421 was 9400 yuan/ton, Xinjiang 421 was 9150 yuan/ton, and Sichuan 421 was 9600 yuan/ton [4]. - **Future Outlook**: The supply increase is obvious, with the weekly output reaching 90,000 tons, equivalent to about 390,000 tons per month. The demand has no obvious increase. The polysilicon production in September was reduced from 145,000 tons to 120,000 - 130,000 tons. The total volume of organic silicon, alloys, and exports remained stable. The industry is in a supply - demand imbalance, and there is no inventory reduction drive. Policy implementation does not focus on the industrial silicon industry, and the weak fundamental drive has led to a recent decline in high - priced silicon, with the market fluctuating widely [4]. 3.2 Market News - On September 3, the futures warehouse receipt volume of the Guangzhou Futures Exchange was 50,029 lots, a net decrease of 371 lots from the previous trading day [5]. - According to customs data, in July 2025, China's metallic silicon exports were 74,000 tons, a month - on - month increase of 8.32% and a year - on - year increase of 36.75%. From January to July 2025, China's total metallic silicon exports were 414,700 tons, a year - on - year decrease of 1.04% [5]. - From January to July 2025, the cumulative photovoltaic installed capacity reached 1109.6GW, and the newly added installed capacity was 223.25GW. In July, the newly added installed capacity was 11GW, a year - on - year decrease of 47.7%, hitting a new low in 2025 [5].

Report on Industrial Silicon 1. Investment Rating No investment rating for the industrial silicon industry is provided in the report. 2. Core Viewpoint The short - term outlook for industrial silicon is bullish. The market sentiment is strong due to factors such as the reduction in production scale of leading large - scale manufacturers, the small - scale production capacity in the southwest region, the upcoming release of the steady - growth work plan for key industries, and the low inventory of industrial silicon factories. The price is expected to strengthen further, with a pressure level of 9,500 yuan/ton [3]. 3. Summary by Directory Chapter 1: Comprehensive Analysis and Trading Strategy - **Supply and Demand**: This week, the weekly output of DMC was 47,800 tons, a 1.92% increase; the weekly output of polysilicon was 23,400 tons, a 0.21% increase; the operating rates of primary and secondary aluminum alloys remained flat. The weekly output of industrial silicon was 73,300 tons, a 1.5% increase. The number of open furnaces increased in Yunnan and Sichuan, decreased in Xinjiang, and increased in Inner Mongolia. The social inventory of industrial silicon was 547,000 tons, a 0.73% decrease, and the inventory of sample enterprises in Xinjiang was 123,600 tons, a 0.24% decrease [3]. - **Trading Logic**: Leading large - scale manufacturers have expanded their production cuts. The restarted production capacity in the southwest consists of small - sized furnaces. It is expected that the industrial silicon output in July will decrease by 20,000 - 30,000 tons compared to June. There is a supply - demand gap before the leading large - scale manufacturers resume production. The sentiment in the industrial silicon market is strong in the short term, and the price is expected to strengthen further [3]. - **Strategy**: For unilateral trading, adopt a bullish approach in the short term. For options, buy protective put options. For arbitrage, gradually take profit on the strategy of going long on polysilicon and short on industrial silicon [4]. Chapter 2: Core Logic Analysis - **Market Review**: This week, the industrial silicon futures first rose and then fell. Southwest manufacturers carried out large - scale hedging around 9,000 yuan. As of Friday, the main futures contract closed at 8,695 yuan/ton. The spot price of industrial silicon increased significantly, generally rising by 300 - 500 yuan/ton [6]. - **Downstream Demand**: The output of DMC increased, the output of polysilicon slightly increased, and the operating rates of aluminum alloys remained stable. It is expected that the output of organic silicon in July will be flat compared to June, and the output of polysilicon will increase [9][13]. - **Industrial Silicon Output**: The weekly output of industrial silicon increased by 1.5% this week. The number of open furnaces changed in different regions. Overall, the output in July is expected to decrease compared to June before the large - scale manufacturers in the northwest resume production [23]. - **Industrial Silicon Inventory**: The factory inventory and social inventory decreased slightly. The social inventory of industrial silicon decreased by 0.73%, and the inventory of sample enterprises in Xinjiang decreased by 0.24%. However, the inventory of sample enterprises in Yunnan increased by 0.37%, and that in Sichuan decreased by 3.7% [24]. - **Related Product Prices**: The spot price of industrial silicon increased this week. The prices of DMC and its terminal products also strengthened [30][34]. Chapter 3: Weekly Data Tracking - **Industrial Silicon - Related Product Prices**: The spot price of industrial silicon increased week - on - week [30]. - **Organic Silicon - Related Product Prices**: The prices of DMC and its terminal products strengthened this week [34]. - **Aluminum Alloy Fundamental Data**: The operating rates of aluminum alloys remained stable [43]. - **Industrial Silicon Raw Material Prices**: The spot price of refined coal in Xinjiang stopped falling [45]. Report on Polysilicon 1. Investment Rating No investment rating for the polysilicon industry is provided in the report. 2. Core Viewpoint The short - term outlook for polysilicon is bullish. The price is expected to be strong next week. The futures price is expected to fluctuate in the range of (40,000, 47,000) yuan/ton. Attention should be paid to the situation of manufacturers selling for delivery [51]. 3. Summary by Directory Chapter 1: Comprehensive Analysis and Trading Strategy - **Comprehensive Analysis**: There are many rumors in the polysilicon market, and the main trading logic is "anti - involution" and selling at no less than cost. The increase in polysilicon price can be smoothly transmitted to the downstream. The futures price is expected to fluctuate in the range of (40,000, 47,000) yuan/ton. The price is expected to be strong next week, and attention should be paid to the situation of manufacturers selling for delivery [51]. - **Operation Strategy**: For unilateral trading, be bullish in the short term and participate with a light position. For options, buy call options. For arbitrage, gradually take profit on the strategy of going long on polysilicon and short on industrial silicon [52]. Chapter 2: Fundamental Situation - **Polysilicon Price**: This week, the spot quotes of polysilicon manufacturers remained stable. N - type granular silicon decreased slightly. The market generally agrees on selling at no less than cost, but there are no direct high - price orders, mainly a combination of old and new orders [53][65]. - **Silicon Wafer and Battery Prices**: The prices of silicon wafers and batteries strengthened. Silicon wafer enterprises started to quote based on full cost, and the battery price has not been adjusted according to the benchmark cost price determined in the self - discipline meeting. Attention should be paid to the actual transaction situation next week [66][71]. - **Component Price**: The prices of components in centralized and distributed projects are expected to increase. Many manufacturers plan to raise component quotes due to the increase in the prices of polysilicon, silicon wafers, and batteries [80]. - **Component Fundamental Data**: In July, the orders of photovoltaic component enterprises did not improve. It is expected that the production schedule of photovoltaic components in July will be reduced to 45GW [81]. - **Battery Fundamental Data**: The inventory of professional battery manufacturers increased to 15.96GW, and the production schedule of photovoltaic battery enterprises was reduced to 54GW in July [87]. - **Silicon Wafer Fundamental Data**: This week, the silicon wafer inventory decreased to 16.02GW, the output was 13.04GW, and the production schedule in July is about 52.2GW [91]. - **Polysilicon Fundamental Data**: This week, the polysilicon output increased slightly, and the factory inventory increased to 276,800 tons. The output in July is variable due to the复产 and postponed复产 of some production capacities [94].

Group 1: Report Information - Report date: June 19, 2025 [2] - Research team: Energy and Chemical Research Team [3] - Industry: Industrial silicon [4] Group 2: Market Performance - Futures price: The main contract price of industrial silicon futures fluctuated. The closing price of Si2509 was 7,425 yuan/ton, up 1.09%. The trading volume was 451,986 lots, and the open interest was 317,763 lots, with a net decrease of 1,130 lots [4] - Spot price: The spot price of industrial silicon was stable. The price range of 553 was 8,100 - 8,300 yuan/ton, and the price range of 421 was 8,200 - 8,400 yuan/ton [4] Group 3: Market Outlook - Supply: Industrial silicon production has not reached the quantity required for supply - demand balance. The resumption of production during the wet season is continuing to increase the supply [4] - Demand: There is no change in the demand side. Domestic demand remains at 260,000 tons, and monthly exports remain at around 50,000 tons. If polysilicon increases the production cut, it will further negatively affect industrial silicon [4] - Inventory: The futures and spot inventory exceeds 800,000 tons, and there is no inventory - reduction driver in the short term [4] - Market trend: Although the supply - demand situation has not improved, the commodity index has continued to rebound recently. The spot price of industrial silicon is supported by the cash cost and remains stable. In the short term, the long and short sides have initially reached a weak balance, and the price will move within a narrow range. The resistance increases when the price rebounds above 7,500 yuan/ton [4] Group 4: Market News - Futures warehouse receipts: On June 18, the number of futures warehouse receipts on the Guangzhou Futures Exchange was 55,620 lots, a net decrease of 448 lots compared with the previous trading day [5] - Policy news: The CSRC will allow qualified overseas investors to participate in on - site ETF option trading from October 9, 2025, and the trading purpose is limited to hedging [5] - Export data: According to customs statistics, in April 2025, industrial silicon exports were 60,500 tons, a month - on - month increase of 1.64% and a year - on - year decrease of 9.19%. The overall overseas market is relatively stable, and the change in export volume is small [5]