The silicon metal market in January 2024

Review of silicon metal market

(1)  Price trend

Metallurgical grade silicon has fallen significantly this month. Although some factories are still unwilling to sell at low prices, there is no significant price difference between the futures price and low-grade spot prices, which has also led to bad spot shipments. Polysilicon factories intermittently placed orders in January, but the price of pink orders was severely suppressed, which also suppressed the spot purchase price of industrial silicon. In addition, the price of low-grade industrial silicon increased in the early days of New Year’s Day, and some orders for stockpiling were released in advance. As the Spring Festival approaches, the situation of factory orders is not optimistic, and the spot trading volume is deserted.

The price of chemical-grade silicon is trending downward. The warehouse receipt volume of 421# metallic silicon is relatively large, and its transaction price is basically the same as that of low-grade silicon. The market spot transaction quotation has no advantage, and the southern factory also reported that the price is already lower than the cost.

(2)  The export market

In December, the total export volume of silicon metal products was 51,568 tons, a year-on-year increase of 3,191 tons, an increase of 6.60%, and a month-on-month increase of 4,017 tons, an increase of 8.45%. The total export volume in 2023 was 572,998 tons, a year-on-year decrease of 78,017 tons, or 11.98%.There was no significant increase in industrial silicon export volume in January. As the Spring Festival approaches, there are a small number of inquiries from abroad. Coupled with the downward trend in domestic prices, the buyer’s market procurement is not active, and the order price is low. Export traders are cautious in accepting orders, and market transactions are still deserted. Industrial silicon export volume in January is expected to be around 47,000 tons.

Summary of operation rate and output

In January, the industrial silicon production capacity was 388,520 tons, a capacity release rate of 57.59%, a month-on-month decrease of 1.75%. In January, the silicon output was approximately 344,480 tons, a month-on-month decrease of 19,030 tons, a decrease of 5.24%, and a year-on-year increase of 65,870 tons, an increase of 23.64%. Among them, Xinjiang’s output was 178,850 tons, accounting for 51.92% of the total output. Yunnan’s output was 43,390 tons, accounting for 12.60% of the total output.Inner Mongolia Autonomous Region’s output was 31,740 tons, accounting for 9.21% of the total output. In January, 330 industrial silicon thermal furnaces were opened nationwide, a decrease of 6 units month-on-month and an increase of 5 units year-on-year. The operating rate was 48.74%, a month-on-month decrease of 0.89%.

In January, industrial silicon manufacturers in Sichuan and Yunnan were affected by the dry season and sluggish market conditions, and the operating rate was at a low level. The operating rate in Yunnan may continue to decrease slightly in the later period. In Xinjiang, affected by environmental protection and other factors, the total number of furnaces in production has decreased. It is expected that It will gradually recover after the year. The operation rate in Inner Mongolia is stable. Guizhou, Hunan and other regions have no electricity price advantage, and the operating rate is already at a low level. The operating rate in Gansu, Shaanxi, Henan, Fujian and other places are relatively stable, but if prices continue to decline, the operating rate in these regions will also decrease. It is expected that the operating rate of industrial silicon plants nationwide will remain at around 50% by next month, with monthly industrial silicon output between 350,000 and 360,000 tons.

Downstream market

Aluminum alloy ingots: The market price of aluminum alloy ingots has declined slightly this month. Most small aluminum plants have been closed before the year and are not active in stocking industrial silicon. It is expected that there will be concentrated procurement after the resumption of work after the year.

Organic silicon: The price of organic silicon has increased due to the low operating rate and downstream replenishment before the year.The quotations of major manufacturers have also increased. However, in terms of the current general trend environment and the relationship of supply and demand, the price increase trend is relatively limited.

Polycrystalline silicon: The price of polycrystalline silicon has risen this month. In terms of purchasing industrial silicon powder, polycrystalline silicon manufacturers have seriously lowered prices, and grinding mills have also continued to lower prices for industrial silicon blocks. Although there was a replenishment phenomenon years ago, it has not had any impact on industrial silicon price to support.

 Forecast of metal silicon next month

Cost aspect: The most obvious changes in raw materials this month are mainly coal and oil coke, while other price changes are smaller. Unit consumption and transportation costs increase in the north in winter. In the later period, with the Xinjiang power reform and other policies, the cost of industrial silicon production has only increased.

Supply and demand side: The current social inventory is relatively large and production is on the low side, and there is a slight destocking situation. There is currently no significant increase in downstream consumption, and the release of some new polysilicon production capacity has been delayed. It is expected that industrial silicon will still be destocked in small quantities in February.