Report Industry Investment Rating No relevant information provided. Core Viewpoints - In the second quarter, industrial silicon is in a game between cost support and marginal inventory accumulation, with overall weak operation. Attention should be paid to the resumption progress of the southwest during the wet season and the production control intensity of polysilicon. Polysilicon will continue its bottom - hitting rhythm. With the release of compliant production capacity under the energy consumption standard, the supply has changed from tight to loose, but the demand - bearing capacity is limited. During the policy implementation window period in April, the silicon material production has increased steadily, the delivery of photovoltaic centralized projects has slowed down, and the inventory of the industry may face increasing pressure. From May to June, the silicon material end moderately controls the speed to maintain prices. Although the photovoltaic installation has recovered steadily and the demand has improved slightly, it is still difficult to digest the supply increment. In the long - term, it is advisable to short on rebounds. The core is to focus on the actual terminal bearing capacity and inventory digestion performance after the end of the rush - to - export period. Currently, the policy expectations have been fully priced in, and a deep correction due to policy disappointment should be vigilant [4]. Summary by Directory 1. Futures Price - In the first quarter, the industrial silicon futures fluctuated weakly. As of March 27, the main contract closed at 8,625 yuan/ton, with a quarterly decline of 2.65%. The polysilicon futures trended weakly, and the main contract closed at 35,680 yuan/ton, with a quarterly decline of 38.4% [5]. 2. Spot Price - All spot prices decreased. The price of non - oxygenated 553 decreased by 150 yuan/ton to 8,800 yuan/ton, the price of oxygenated 553 decreased by 400 yuan/ton to 9,000 yuan/ton, and the price of 421 decreased by 300 yuan/ton to 9,600 yuan/ton. The price of P - type polysilicon decreased by 12,000 yuan/ton to 32,000 yuan/ton, and the price of N - type polysilicon decreased by 13,300 yuan/ton to 38,500 yuan/ton [5]. 3. Spread - The spread between 553 grades narrowed, the spread between high - and low - grade products widened, the regional spread of 553 narrowed, and the regional spread of 421 narrowed. The industrial silicon spot changed from a discount of 10 yuan/ton to a premium of 175 yuan/ton, and the polysilicon spot changed from a discount of 6,920 yuan/ton to a premium of 4,070 yuan/ton [5][17]. 4. Supply - In the first quarter, the total domestic industrial silicon production reached 847,400 tons, a year - on - year decrease of 6.9%. The number of open furnaces in the quarter decreased by 39 to 204, and the furnace - opening rate decreased by 4.9% to 25.6%. The proportion of the main production areas changed as follows: Xinjiang increased to 62.7%, Inner Mongolia increased to 11.3%, Gansu increased to 9.8%, Yunnan decreased to 5.2%, and Sichuan decreased to 0.5%. Xinjiang's production capacity was rapidly released, and the new production capacities in Inner Mongolia and Gansu continued to fill the production reduction gap in the southwest [4][5]. 5. Demand - In the first quarter, the polysilicon production was 254,000 tons, a year - on - year decrease of 11.8%. The DMC production in the first quarter was 532,000 tons, a year - on - year decrease of 23.3%. From January to February, the aluminum alloy production was 2.765 million tons, a year - on - year increase of 11%, and the estimated production from January to March was 4.515 million tons. The estimated silicon consumption for organic silicon, polysilicon, and aluminum alloy was 276,000 tons, 330,000 tons, and 181,000 tons respectively. From January to February, the cumulative net export of industrial silicon was 113,000 tons, a year - on - year increase of 20.8% [4][5]. 6. Inventory - In terms of exchange inventory, in the first quarter, the overall inventory of industrial silicon increased by 6,020 tons to 111,400 tons, and the overall inventory of polysilicon increased by 18,000 tons to 30,100 tons. In terms of social inventory, in the first quarter, the industrial silicon inventory decreased by 20,600 tons to 435,600 tons, among which the factory inventory decreased by 15,100 tons to 251,000 tons; the inventory at Huangpu Port decreased by 1,500 tons to 56,500 tons, the inventory at Tianjin Port decreased by 6,000 tons to 74,000 tons, and the inventory at Kunming Port increased by 2,000 tons to 54,000 tons. The overall inventory of polysilicon increased by 23,700 tons to 332,000 tons [4][5].

Report Summary 1. Industry Investment Rating - Not provided in the document. 2. Core Viewpoints - In September, after entering the traditional peak season, the resumption of production in the north and south and the increase in crystalline silicon will become marginal drivers. There is room for improvement in the supply - demand pattern of industrial silicon, and the overall operating center is expected to rise slightly. [4] - After the previous anti - involution news was fully priced, the trading center of polysilicon gradually shifted to the fundamental logic. Due to the limitation of the terminal power station yield, the acceptance of price increases in the component link has reached its peak, and the silicon material has cooled down along with the downstream market sentiment. Before specific policy measures are introduced, the market is still in a game between policy boost and fundamental drag. Polysilicon has entered a range mode with obvious top and bottom, and policy dynamics have a phased disturbance effect on the market. [4] 3. Summary by Directory 3.1 Futures Prices - In August, the industrial silicon futures fluctuated weakly. As of the 29th, the main contract closed at 8,420 yuan/ton, with a monthly decline of 4.97%. The polysilicon futures fluctuated strongly, and the main contract closed at 49,555 yuan/ton within the month, with a monthly increase of 0.87%. [5] 3.2 Spot Prices - The spot prices were stable with a weak trend. The price of non - oxygenated 553 decreased by 150 yuan/ton to 8,550 yuan/ton, the price of oxygenated 553 decreased by 100 yuan/ton to 9,200 yuan/ton, and the price of 421 decreased by 100 yuan/ton to 9,650 yuan/ton. The price of P - type polysilicon increased by 5,000 yuan/ton to 40,000 yuan/ton monthly, and the price of N - type polysilicon increased by 2,500 yuan/ton to 48,300 yuan/ton monthly. [5] 3.3 Spreads - In August, the spread between 553 widened, the spread between high - and low - grade products remained stable, the regional spread of 553 remained stable, and the regional spread of 421 remained stable. [5] 3.4 Supply - According to Baichuan, it is estimated that the domestic industrial silicon production in August was 369,400 tons, a year - on - year decrease of 20.4% and a month - on - month increase of 11.6%. The monthly number of open furnaces increased by 31 to 293, and the furnace opening rate increased by 3.89% to 36.8%. [4][5] 3.5 Demand - In August, the polysilicon production increased by 18,200 tons to 125,500 tons, a year - on - year decrease of 2.3% and a month - on - month increase of 17%. The DMC production increased by 58,800 tons to 217,600 tons, a year - on - year increase of 40.8% and a month - on - month increase of 37%. [4][5] 3.6 Inventory - In terms of the exchange, the overall inventory of industrial silicon in August increased by 30 tons to 253,300 tons, and the inventory of polysilicon increased by 110,400 tons to 206,400 tons. In terms of social inventory, the inventory of industrial silicon decreased by 7,000 tons to 435,900 tons in August, among which the factory inventory decreased by 10,000 tons to 261,400 tons; the inventory at Huangpu Port remained stable at 55,000 tons, the inventory at Tianjin Port increased by 2,000 tons to 70,000 tons, and the inventory at Kunming Port increased by 1,000 tons to 49,500 tons. The monthly inventory of polysilicon decreased by 30,400 tons to 24,500 tons. [4][5]