The silicon metal market in June 2022

The Review of Silicon Metal Market

Metallurgical grade silicon market

In June, the market price of metallurgical grade silicon metal bottomed out after signing orders for June at a low price at the beginning of the month. After the price of silicon metal has been falling for three consecutive months, the silicon factory has a strong hope for rising. As the cost of factories in some areas is gradually reducing production, the market has sent a bottoming message, and the market price is relatively fast, and the price has risen by more than 2,000 yuan in just two weeks. However, in the middle of June, the purchase volume of major downstream manufacturers was relatively small, and the mainstream transactions in the market were not active.

The electricity cost of silicon metal factories in various places has increased year-on-year. The prices of raw materials, silicon coal and petroleum coke, are difficult to drop significantly. The overall production cost is running at a high level

Chemical grade silicon market

The market transaction of chemical grade silicon metal was not satisfactory this month. However, after the market bottomed out and rebounded in a short period of time, some silicone factories have not met their monthly purchase requirements, and they have all postponed the plan and kept waiting. With some organosilicon factories reducing production and overhauling, and depleting inventories, the transaction price adjusted slightly after the upstream and downstream stalemate. At the end of June, some organosilicon factories have been purchasing small quantities one after another.

The Exporting Market of Silicon Metal

In May, the total export volume of silicon metal was 57,965 tons, an increase of 3,654 tons or 6.73% month-on-month, and a year-on-year decrease of 11,568 tons, a decrease of 16.64%. From January to May, the total export volume was 291,920 tons, a year-on-year decrease of 41,662 tons or 12.49%.

At the beginning of June, the domestic silicon metal market price was at a low level, and some overseas orders were released. However, in the middle of June, the price rose, and some orders were added.

The Operation and Capacity

In June, 389 silicon metal furnaces were opened nationwide, an increase of 23 units from last month and an increase of 62 units from the same period of last year. The operating rate was 65.05%, an increase of 3.33% from last month. The production capacity was 360,880 tons, it was released by 66.62%, an increase of 5.22% from the last month. The output of metal silicon was about 308,820 ton, an increase of 20,270 tons or 7.02% month-on-month, and a year-on-year increase of 89,510 tons, an increase of 40.81%. The total output from January to June was 1,617,270 tons, an increase of 417,870 tons or 34.84% over the same period of last year.

In addition, 23 furnaces were opened in of 97# silicon factories, with a monthly output of 15,350 tons. In June, the total number of submerged arc furnaces totaled 412, and the total silicon output of submerged arc furnaces was about 324,170 tons.

At present, silicon metal factories in Hunan, Guangxi, Guizhou, Fujian, Shaanxi and Northeast area of China continue to reduce production, mainly due to market prices and regional production disadvantages. Subsequent Sichuan and Yunnan will continue to operate at a high level during the wet season, with operating rates above 70%. A new project in Xinjiang is also gradually increasing production. It is expected that the output will continue to increase in July.

The Market Prediction For July

The price of silicon metal rose and fell rapidly in June, and the mentality of upstream and downstream differed greatly. However, the follow-up price trend still needs to pay close attention to the changes in the relationship between production and consumption, changes in costs, and the ability of companies to stock up.

Cost side: In July, the production electricity prices of the main producing areas of Xinjiang, Sichuan and Yunnan metal silicon factories will be concentrated between 0.35-0.41 yuan / ton. Due to the difference in unit consumption of the production process, the electricity cost may have a price difference of several hundred yuan. The prices of raw materials such as washed coal, electrodes, and petroleum coke may be stable at a medium-to-high level, and the cost is difficult to keep down. In July, the price of metal silicon is also difficult to fall to the lowest point in June.

Supply and demand side: At present, the monthly output of silicon metal has gradually climbed to an annual high level, or will remain at 300,000 tons per month. The new downstream organic silicon projects have been put into operation in the first quarter, and the current consumption is stable at 85,000-90,000 tons per month. The new polysilicon project will continue to increase the annual production capacity of 200,000-400,000 tons in the second half of the year, and the consumption will increase by 20,000-40,000 tons/month; with the support of domestic infrastructure and policies, the aluminum market may have a stable production trend. Of course, it will be difficult to increase production in the high off-season from July to August, or some factories will maintain the current low level of operation. The average monthly consumption in the export market has decreased significantly. A comparison of customs data shows that the monthly average export volume this year decreased by 6,431 tons.

To sum up, it is expected that the market price of silicon metal may stabilize after falling slowly in July.