The world's first industrial silicon futures will be listed, which is expected to empower the development of the photovoltaic industry

On December 2, the China Securities Regulatory Commission issued a notice agreeing to the Guangzhou Futures Exchange to carry out industrial silicon futures and options trading
.
A number of industry insiders said that the launch of industrial silicon futures and options is of positive significance for helping the development of
China's low-carbon economy, improving the risk management capabilities of industrial enterprises and improving the industrial silicon price formation mechanism.

Guangzhi said that the scale of the industrial silicon market is growing rapidly, and the amount available for delivery is relatively sufficient
.
According to the average price in 2021, the size of China's industrial silicon market is about 64.
4 billion yuan.

It is estimated that by 2025, the demand for industrial silicon in China will reach 4.
8 million tons, and the market size is expected to be nearly 100 billion yuan
.

"For enterprises in the photovoltaic industry supply chain, the listing of industrial silicon futures can give the market a price signal, and enterprises can formulate corresponding production and operation plans through the prediction of futures prices, or adjust production and sales
.
" In addition, industrial silicon futures can help companies hedge against price risk
through hedging.
Wu Qichong, an industry analyst at the Orient Futures Derivatives Research Institute, said
.

Liu Yiyang, deputy secretary-general of China Photovoltaic Industry Association, believes that the listing of industrial silicon futures in China can give full play to the dominant advantages of the industry, combined with spot market transactions, and is expected to provide guiding prices for related industries at home and abroad, thereby helping to seize the international pricing power and lay the foundation
for the price stability of the entire photovoltaic industry.

With the opening of industrial silicon futures trading, in the future, upstream production enterprises can hedge industrial silicon futures to lock in profits, while downstream enterprises can hedge to lock in production costs, so it is expected to stabilize the upstream and downstream markets
of the industrial chain.

It is understood that Hesheng Silicon and Dongyue Silicon have previously indicated that they intend to apply to Guangzhi Institute for the qualification
of industrial silicon designated delivery warehouse.

"Taking the lead in listing industrial silicon futures that can reflect the actual supply and demand, and using the futures market to form an industrial silicon pricing center, will help transform China's advantages of large market share and high export trade in the industrial silicon industry into a matching international market influence
.
" Guangzhou Futures said that in the next step, under the guidance of the China Securities Regulatory Commission, it will make preparations for the listing of industrial silicon futures and options to ensure the smooth launch and stable operation
of industrial silicon futures and options.

According to the data, China is the world's largest producer and consumer of industrial silicon
.
As of 2021, there are a total of 220 industrial silicon production enterprises in China, and 98% of the production enterprises are private enterprises and individual industrial and commercial enterprises
.
In 2021, the domestic industrial silicon production capacity was 4.
99 million tons (excluding recycled silicon), and the output was 3.
21 million tons , accounting for 73.
35% and 71.
65% of the global industrial silicon production capacity and output, respectively; Industrial silicon consumption was 3.
132 million tons, of which domestic consumption was 2.
358 million tons, accounting for 57%
of the total global consumption.

Industrial silicon is located at the top of the silicon-based material industry chain and is the core raw material
for the development of the "silicon energy" industry chain.
The downstream industries of industrial silicon are polysilicon, silicone and aluminum alloy, all of which are sunrise industries with great
potential.
Polysilicon is the main raw material of photovoltaic modules, with the proposal and gradual advancement of China's "dual carbon" goal, the photovoltaic industry ushered in a period of rapid development, it is expected that by 2025 the amount of industrial silicon consumed in the polysilicon field will exceed 1.
9 million tons, accounting for 41% of the total domestic industrial silicon consumption, becoming the largest consumption area
of industrial silicon.

From another downstream point of view, silicone is currently the largest consumer area of industrial silicon, and will maintain an average annual growth
of more than 10% in the future.
Most silicone materials are similar to petroleum-based materials, such as silicone oil, silicone, silicone resin, etc.
, but with better performance and less carbon emissions
.

From the perspective of the market, in recent years, the price of industrial silicon market has fluctuated frequently
.
In August ~ September last year, the industrial silicon market rose sharply, and the price once climbed to around
67,000 yuan (ton price, the same below).
However, in October, the industrial silicon market plunged sharply, and the market price fell to about
20,000 yuan.
Recently, the domestic industrial silicon market is still in a downturn, and the mainstream price is 20,500 yuan
.
This has also led to significant fluctuations
in the performance of relevant listed companies.