The silicon metal market in August 2024

1. Raw Material Market Review

This month, the market for raw materials used in industrial silicon production saw a general price decline, except for silica, which remained stable. The industrial silicon market experienced a downturn, and raw material sales were sluggish. Specifically, the average price of petroleum coke fell by 175-320 yuan/ton, washed coal dropped by 100-115 yuan/ton, and electrodes saw an average price decrease of 800 yuan/ton.

2. Silicon Metal Price Trends

The prices of 553# and 441# industrial silicon rose this month. The price of 3303# industrial silicon remained mostly unchanged, and low-calcium supplies were limited. Factories in operation were unwilling to sell at low prices.

3. Export Market

In July, China’s total exports of industrial silicon products amounted to 54,118 tons, an increase of 6,689 tons year-on-year (up 14.10%) but a decrease of 7,122 tons month-on-month (down 11.63%). From January to July 2024, cumulative exports of industrial silicon reached 419,052 tons, an increase of 83,376 tons year-on-year (up 24.84%).

July’s export volume decreased compared to June, partly due to inspections by relevant authorities on certain non-compliant behaviors, which impacted exports. While exporters quoted higher prices than before, some foreign buyers have gradually accepted these prices. By late August, exporters who had previously secured orders began releasing them, and low-calcium products became particularly sought after.

4. Production and Output Summary by Region

In August, China’s industrial silicon output was approximately 480,760 tons, a month-on-month decrease of 15,930 tons (down 3.31%) but a year-on-year increase of 154,440 tons (up 47.33%). Of this, Xinjiang’s output was 225,600 tons, accounting for 46.93% of the total; Yunnan produced 93,930 tons, accounting for 19.54%; and Sichuan’s output was 60,100 tons, making up 12.50%. From January to August, cumulative output was 3,221,380 tons, a year-on-year increase of 867,280 tons (up 36.84%). In August, 414 silicon smelting furnaces were in operation nationwide, 28 fewer than in July but 29 more than in August last year. The operating rate was 59.14%, down 4.18% month-on-month.

5. Downstream Market

Aluminum Alloy Ingots:The price of aluminum alloy ingots rose this month, though it did not significantly stimulate downstream demand. As industrial silicon prices stabilized, most aluminum plants made rational purchasing decisions, but there was still some pressure on prices.

Silicones: Leading companies in the silicone market raised prices, and downstream buyers placed orders on a cyclical basis, but acceptance of high prices remained limited. The increase in silicone prices was relatively small. Silicone manufacturers continued to follow the overall market trend by reducing their purchasing prices for chemical-grade industrial silicon. Some silicone producers opted for more competitively priced supplies, with little stockpiling and mostly just-in-time purchasing.

Polysilicon: The polysilicon market saw stable prices with slight increases this month. Downstream wafer manufacturers had already made some purchases earlier. In response to polysilicon manufacturers’ price increases, wafer manufacturers primarily focused on using their existing stock, with fewer high-priced transactions. For  industrial silicon powder used in polysilicon production, recent procurement prices for 99-grade silicon powder ranged from 11,700 to 12,000 yuan/ton, though some lower-priced options were available in the market.

6. Forecast for Silicon Metal Next Month

Cost Side: The raw material market saw stable to slightly declining prices this month, but factories primarily relied on previously stockpiled materials rather than real-time purchases, so there was limited room for actual cost reduction. However, if industrial silicon prices remain depressed and factories reduce production, raw material prices may continue to fall slightly in the future.

Supply and Demand Side: Industrial silicon output saw a slight decrease this month, with some factories in major production areas such as Sichuan, Yunnan, and Xinjiang halting production due to unprofitability and waiting to observe market conditions. However, demand for silicones and aluminum was relatively stable this month, while polysilicon demand slightly decreased. It is expected that polysilicon demand may increase slightly next month, and the surplus in industrial silicon output is likely to decrease somewhat.

Price Trend:As industrial silicon prices hit bottom and rebounded at the end of the month, traders who had been preparing to stockpile took action. Factories also showed a reluctance to sell, and a major northern factory led a price adjustment. It is expected that industrial silicon prices will see a slight increase in the short term, though future price trends will still depend on supply and demand dynamics.