The silicon metal market in March

1.Price Trends

In March, the price of silicon metal continued to decline, leading to weak production enthusiasm among factories. Downstream large enterprises reduced their tender volumes both year-on-year and month-on-month, while some factories operated at low capacity. Meanwhile, supporting industrial silicon plants gradually began production, further reducing procurement demand and market activity. Currently, futures prices continue to fall, and with no support for an industry-wide recovery or resolution of supply-demand imbalances, pessimism dominates the market.

2.Production and Operating Rates

As of the end of March, out of 712 silicon submerged arc furnaces nationwide, 263 were in operation, an increase of 16 compared to the previous month but 73 fewer than the same period last year. The operating rate stood at 36.94%, up 2.15% month-on-month. The monthly output was approximately 349,320 tons, a month-on-month increase of 51,040 tons (+17.11%). The cumulative production for January–March reached 954,580 tons, marking a year-on-year decrease of 94,180 tons (-8.98%). In March, some factories in Yunnan, Shaanxi, Guizhou, Northeast China, Ningxia, and Qinghai reduced production, while production increased in Xinjiang and Sichuan.

3.Export Market

In January, the total silicon metal exports reached 52,498.235 tons, down 11,513 tons (-17.99%) year-on-year and 5,128 tons (-8.90%) month-on-month. In February, exports totaled 44,191.581 tons, increasing by 6,830 tons (+18.28%) year-on-year but decreasing by 8,306 tons (-15.83%) month-on-month. The cumulative export volume for January–February was 96,690 tons, a year-on-year decrease of 4,683 tons (-4.62%). In March, overseas demand for industrial silicon remained weak, with only a few new orders. With increasing industrial silicon production in other countries and the impact of China’s policy adjustments to optimize tax services for export goods, silicon metal export volumes may decline significantly.

4.Downstream Market

Aluminum Alloy Market: The mainstream transaction price in the aluminum alloy market fell slightly by 50–200 RMB this month. Aluminum plants maintained stable production, consuming around 60,000 tons of industrial silicon per month. With industrial silicon prices fluctuating at low levels and lacking strong support for recovery, aluminum alloy plants continue to procure based on necessity.

Silicone Market: The mainstream silicone market prices showed an upward trend, with price increases across various product categories. Market activity improved slightly. However, midstream and downstream silicone production rates remained low, and after periodic purchasing, market transactions returned to normal. In early March, monomer plant operating rates were below 70%, but some plants gradually resumed production in late March, maintaining a monthly industrial silicon consumption of approximately 110,000 tons.

Polysilicon Market: Polysilicon transaction prices remained stable, with some minor increases of 1 RMB/kg. The mainstream price for N-type polysilicon ranged from 44–45 RMB/kg. Silicon material plant operating rates remained low, with multiple plants planning to resume production but no significant capacity expansion. March polysilicon production was around 101,500 tons, leading to a slight increase in silicon consumption.

5.Market Outlook for April

Cost Factors: Recently, the prices of key raw materials, including silica, silicon coal, petroleum coke, and electrodes, have shown a slight downward trend, leading to a marginal decrease in silicon metal production costs. Amid intensified market competition and worsening supply-demand imbalances, declining raw material prices will further depress mainstream transaction prices for silicon metal. In terms of electricity costs, as rainfall increases in Southwest China, hydropower generation is transitioning into the normal and high-flow seasons, leading to potential reductions in electricity costs. However, current industrial silicon prices are still insufficient to cover the production costs of Sichuan and Yunnan factories during the high-flow season.

Supply and Demand: In March, total production of silicon metal, 97-silicon, and recycled silicon was approximately 385,000 tons, while downstream consumption increased slightly, leading to an estimated inventory accumulation of around 30,000 tons. Some major factories are planning production cuts. If the reductions last for an extended period, the industrial silicon market could see a notable destocking trend in April.

Price Trends: With no significant improvement in supply-demand dynamics and production costs slightly decreasing, while downstream production increases slowly, the overall industrial silicon market is expected to remain in a low-range consolidation pattern in April. However, if production cuts are widespread and prolonged, leading to a clear destocking trend, prices may have room for a slight rebound.