The silicon metal market in February 2024

Price trend of silicon metal

The market for metallurgical silicon metal has declined significantly this month, with futures prices falling. In addition, downstream customers only need to stock up on demand. Market transactions have been inactive since the end of the year, and most factories in production have a certain amount of inventory backlog. Downstream manufacturers just buy goods with a little quantity, and the purchase prices are low. The silicon factories have also made price concessions. The prices in the north are relatively low.

The price of chemical-grade industrial silicon has dropped, but organic silicon factories have also reported that the current market supply that can meet the trace requirements is too small, and some organic silicon factories have increased their purchases of low-titanium source metallic silicon. The supply of ordinary 421# metallic silicon is sufficient, but the cost is high in the south, making it difficult for factories to sell.

The export market

In February, silicon metal exports were still mainly deserted. A small number of orders were placed before the year, and the buyers also made inquiries after the year. However, there was a significant price difference with the domestic price. When the market trend was unclear, most export traders did not dare to take orders rashly. In the absence of a significant improvement in the general economic environment, coupled with the expansion and construction of foreign silicon metal factories, the export market situation is not optimistic.

Summary of operation rate and output

In February, the total industrial silicon production capacity was 394,780 tons, with a capacity release rate of 57.58%, a month-on-month decrease of 0.01%. Among them, two new factories in Inner Mongolia were put into operation in February, and their production capacity has increased. It is expected that some new factories in Xinjiang will start production in March. In February, the total industrial silicon output was approximately 343,340 tons, a month-on-month decrease of 1,140 tons, a decrease of 0.33%, and a year-on-year increase of 37,970 tons, an increase of 12.43%. Among them, Xinjiang’s output is 183,500 tons, accounting for 53.45% of the total output; Yunnan’s output is 43,860 tons, accounting for 12.77% of the total output; Inner Mongolia Autonomous Region’s output is 30,670 tons, accounting for 8.93% of the total output. In February, 348 industrial silicon ore furnaces were opened, an increase of 18 units month-on-month and a decrease of 2 units year-on-year; the operating rate was 50.95%, an increase of 2.21% month-on-month. The change in operating rate is reflected in the increase in production after returning to the market, among which Xinjiang, Fujian, Hunan, Inner Mongolia, Guizhou and Chongqing have increased production.

Downstream market

Aluminum alloy ingots: The price of aluminum alloy ingots has not fluctuated much this month. Some aluminum factories have resumed work after the year, but procurement is not active and they only buy goods for urgent needs.

Organic silicon: Due to the closure of major manufacturers and low inventories in the downstream market, the recent growth of organic silicon is relatively optimistic. However, in terms of purchasing metal silicon, there is no profit loss due to price increases.

Polysilicon:  The polysilicon market price is trending upward this month. In terms of purchasing metal silicon, several polysilicon factories will replenish their stocks after the year, but the purchase prices are lower than the prices last year. In addition, the current futures price is on the low side. Grinding mills can choose the warehouse receipt supply, and there has been no obvious shortage of 99 silicon recently.

Prediction in March

Cost: There is no significant change in raw material prices at present, mainly oil coke and silicon coal. Prices are expected to be relatively stable next month. There has been no significant adjustment in electricity prices in various regions, and the cost of industrial silicon remains high.

Supply and demand side: At present, social inventories are still relatively large, and output is basically stable. Production in the south is decreasing, but there is a trend of increasing production in the north. Downstream consumption has not increased significantly at present. It is expected that the supply and demand relationship will be relatively balanced next month, and there will be no obvious destocking phenomenon unless low prices force some silicon plants to shut down.

Price trend: Judging from the current price pattern, there is no obvious positive or negative stimulus. If all downstream orders are placed and market purchases remain inactive, prices may continue to fall slightly next month.