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].