The silicon metal market in May 2025

I. Raw Material Market Overview

In May, raw material prices for silicon generally stabilized. Transactions for certain materials were skewed toward lower price levels due to sluggish demand. With many silicon producers maintaining low operating rates, procurement enthusiasm for raw materials remained weak. Production schedules were frequently adjusted in response to the continued downturn in the silicon market, contributing to a broadly bearish tone on the raw material side.

II.Price Trends

The downward trajectory of silicon prices continued throughout May. The main reasons included:

• Low operating rates among downstream consumers;
• Higher self-sufficiency ratios by downstream plants, leading to reduced bidding activity;
• Sluggish market transactions overall.

The market continues to struggle with:

1. A deepening mismatch between supply and demand;
2. Rising tension between production costs and pricing;
3. Persistently high social inventory levels and insufficient production cuts.

Prices fell below many producers’ cost lines, yet inventory clearance remained slow. The 553# non-oxygen grade had zero furnace activity, and producers held on to their stock, reluctant to sell. The gap between oxygen and non-oxygen grades narrowed, with some producers refusing to quote at all. Futures-related price quotes rose in basis but actual transaction prices declined in tandem with falling futures.

Market sentiment became chaotic, with some factories under intense survival pressure engaging in cutthroat competition.

III. Export Market Overview

According to China Customs, China exported 60,508.875 tons of silicon in April 2025, down:

• 9.19% YoY (a drop of 6,124 tons),
• But up 1.64% MoM (an increase of 978 tons).

Cumulative exports for January to April 2025 reached 216,730 tons, representing a 6.54% YoY decrease (down 15,177 tons)

IV.OperatingRate       

• In May, 232 out of 731  silicon furnaces were in operation, an increase of 1 unit MoM and a decrease of 147 units YoY;
  •        Operating rate: 31.74%, down 0.53% MoM;
  •        Effective production capacity: 802,110 tons, with 345,440 tons actively utilized (utilization rate: 43.07%);
  •        Total output in May: approx. 313,870 tons, up 2.25% MoM, but down 22.69% YoY;
  •        Cumulative output from Jan–May 2025: approx. 1,575,420 tons, down 11.91% YoY.
• V. Downstream Market

Aluminum Alloy

Aluminum alloy prices dropped slightly by RMB 200–300/ton. Production at aluminum smelters remained steady. The silicon procurement was based on rigid demand. With futures prices falling quickly, smelters preferred transacting through futures-linked suppliers.

Silicones (Organosilicon)

The silicone market was weak but stable. DMC (Dimethylcyclosiloxane) was traded at RMB 11,300–11,600/ton. After temporary production cuts in May, some silicone monomer plants resumed operations, slightly boosting demand for silicon.

Polysilicon

The polysilicon market remained weak. Prices declined by RMB 2–3/kg. Production rates were low, though some plants plan to restart in June. Demand for silicon may see a modest rise.

VI. Outlook for June 2025

Cost Factors

In the past six months, some silicon producers invested in new projects and technical upgrades:

• Improved production efficiency and output rates;
• Adoption of waste-heat power recovery;
• Transition from AC to DC furnaces lowered power consumption.

With the arrival of the flood and flat-water season in Yunnan and Sichuan, electricity costs in southern China are likely to drop significantly. Some factories plan to restart operations. Raw material prices (coal, electrodes, etc.) remain weak and may fall further.

Supply & Demand Forecast

May’s total silicon output was ~340,000 tons. As downstream sectors like silicones continue to resume production, consumption may rise. Inventory drawdown for May is estimated at 15,000–20,000 tons.

In June:

• Some existing furnaces may shut down;
• Others, particularly in southern regions, are expected to restart due to lower costs;
• Net production may stabilize;
• Consumption changes will balance out supply fluctuations.

Conclusion: A supply-demand balance is expected in the industrial silicon market for June 2025.

Price Prediction In June
The silicon prices have fallen below most producers’ cost lines. As a result, most factories have reduced
their willingness to ship and are exhibiting a clear reluctance to sell. Only a few cash-strapped factories continue to produce and sell to maintain operations.
Looking ahead, the  silicon market is expected to remain weak through June. However, the room for
further price declines appears limited, with prices likely to fluctuate at low levels.