China launches industrial silicon futures

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The CSRC has authorized the trading of industrial silicon futures on the Guangzhou Futures Exchange. It said it aims to improve the pricing mechanism for industrial silicon, and claimed that the move would improve the risk-management capabilities of various market entities.

Johannes Bernreuter, a polysilicon analyst, said that the introduction of industrial silicon future appears to be a reaction to the surge in silicon metal prices in the third quarter of 2021.

“Probably, this will give polysilicon manufacturers the opportunity to hedge against fluctuating silicon metal prices,” Bernreuter told pv magazine.

However, he noted that polysilicon prices have already stabilized at high levels.

This will only be the usual seasonal drop at year end,” he said. “As to forecasts of a stronger decrease, we remain cautious for the first half of 2023.”

In late November, PV InfoLink said that polysilicon prices are on a “distinctive downward” trend, following months of high prices. It said it expects prices to fall significantly from the end of November into early December.

“Unhealthy inventory will persist in the polysilicon sector until the end of the month,” said the consulting firm, noting that it expects to see the first decline in polysilicon inventory in two years.

In October, PV InfoLink predicted that prices would fall from around CNY 300 ($41.85)/kg, excluding VAT, and to less than CNY 150/kg by the end of 2023.

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