The silicon metal market in July 2024

1. Raw Material Market Review
This month, there were no significant changes in the raw materials for industrial silicon production. Raw material suppliers reported that the current industrial silicon market is not optimistic. Most factories are maintaining normal stock levels, but the sales and payment recovery situation is not as good as in the past two years. Given the pessimistic market outlook, the raw material market is also unlikely to experience significant price increases.
2. Silicon Metal Price Trends
The price of  553-grade silicon has dropped, with some factories in Sichuan reducing production or undergoing routine maintenance.The supply of 441# industrial silicon is limited, and southern factories are quoting higherprices. The factory price of 3303# industrial silicon in Yunnan has dropped by 200-300 yuan/ton.The 97-grade silicon market price has fallen by 1,000-1,100 yuan/ton. Some factories have switched to producing ferrosilicon, while others are using the low-price period to conduct maintenance.The price of chemical-grade 421# industrial silicon has also declined this month, with silicone factories continuing to pressure prices down due to just-in-time procurement.
3. Export Market Prices
In June, China’s total export volume of industrial silicon products reached 61,240 tons, an increase of 13,519 tons year-on-year (up 28.33%) but a decrease of 10,547 tons month-on-month (down 14.69%). From January to June 2024, the cumulative export volume of industrial silicon was 364,934 tons, an increase of 76,687 tons year-on-year, up 26.60%.

Although June’s export volume decreased compared to May, recent inspections by relevant departments have had some impact on the export market. Some exporters have been quoting prices inclusive of taxes, but foreign customers have limited acceptance of high prices, leading to sporadic just-in-time purchases.
4. Production and Output Summary by Region
China’s industrial silicon output in July was approximately 496,690 tons, a month-on-month increase of 41,160 tons (up 9.04%) and a year-on-year increase of 210,520 tons (up 73.56%). Of this total, Xinjiang’s output was 230,900 tons, accounting for 46.49% of total production; Yunnan’s output was 94,890 tons, accounting for 19.10%; and Sichuan’s output was 65,280 tons, accounting for 13.15%. From January to July this year, the cumulative output was 2,740,620 tons, a year-on-year increase of 712,840 tons (up 35.15%). In July, there were 442 silicon smelting furnaces operating in China, 21 fewer than in June and 118 more than in July last year. The operating rate was 63.32%, down 3.11% month-on-month. The industrial silicon market remained sluggish in July, and factory production enthusiasm gradually declined, with reductions in output across silicon plants in Xinjiang, Sichuan, Inner Mongolia, Fujian, Chongqing, Qinghai, and Henan.
5. Downstream Market
Aluminum Alloy Ingots: The market price of aluminum alloy ingots continued to decline this month, with overall demand in the aluminum market remaining sluggish. Many silicon plants producing aluminum alloy ingots have halted or reduced production.

Silicones: The market price of silicone monomers continued to decline, despite leading enterprises showing a trend toward price increases. Downstream demand remained lukewarm, and the acceptance of higher prices was limited. Silicone manufacturers are continuing to follow the overall market trend by lowering their purchasing prices for chemical-grade industrial silicon.

Polysilicon: The polysilicon market continued its downward trend this month, with more polysilicon factories undergoing maintenance, leading to slight price increases among operational factories. Currently, around 90% of grinding plants in the market have ceased operations due to a lack of orders or excessively low prices.

6. Forecast for Silicon Metal Next Month
Cost Side: At present, raw material prices are generally stable, and weak silicon prices have led to raw material demand being largely just-in-time, leaving raw material prices unchanged. Production costs are expected to remain stable in the near term.

Supply and Demand Side: This month, industrial silicon output remained high, with production increases concentrated in Xinjiang, Yunnan, Sichuan, and Gansu. New enterprises are operating at full capacity. On the demand side, polysilicon production cuts have been significant, the aluminum market has seen clear production reductions, and exports have been affected to some extent. Demand for silicones has been relatively stable, with slight growth. If industrial silicon production cuts occur next month, the severe oversupply situation may ease somewhat.

Price Trend: In terms of full production costs, most factories are already operating at a loss, making further price declines unlikely. However, with no significant production cuts and terminal demand also decreasing, industrial silicon prices are expected to remain weak next month.