The silicon metal market in October 2024

Silicon Metal Price Trends
This month, the price of metallurgical-grade industrial silicon increased by 100-300 RMB/ton, while the price of chemical-grade industrial silicon rose by around 200 RMB/ton.Actual transactions were primarily based on essential demand. Southern silicon plants, which are about to shut down, are unwilling to sell at low prices, and northern plants hedged at high market prices, resulting in limited supply available on the market. Although buyer demand has been relatively inactive, the end market is gradually accepting the firm pricing stance

Export Market Prices

In September, China’s industrial silicon exports totaled 65,193 tons, a year-on-year increase of 13,906 tons (up 27.11%) and a month-on-month increase of 408 tons (up 0.63%).From January to September 2024, cumulative exports of industrial silicon reached 549,030 tons, a year-on-year increase of 118,750 tons (up 27.60%).Compared to August,industrial silicon exports in September improved. Export traders noted that although foreign buyers offered lower prices, orders continued to be released. Some traders,wary of a future market downturn, are cautious about accepting lowpriced orders. Export volumes are unlikely to see significant growth as foreign customers are not stockpiling in large quantities and are maintaining normal purchasing levels.

Production and Output Summary by Region

According to the statistics, China’s industrial silicon output in October was approximately 467,190 tons, a month-on-month increase of 9,080 tons (up 1.98%) and a year-on-year increaseof 58,290 tons (up 14.26%). Of this, Xinjiang’s output was 231,000 tons (49.44% of the total), Yunnan’s output was 75,940 tons (16.25%), and Sichuan’s output was 54,200 tons (11.60%). Cumulative production from January to October totaled 4,146,680 tons, a year-on-year increase of 1,019,190 tons (up 32.59%). Nationwide, 407 industrial silicon furnace operations were active, a decrease of six month-on-month and a decrease of 69 year-on-year, with an operating rate of 57.65%, down 1.02% month-on-month.Factories in Sichuan, Yunnan, Xinjiang, Fujian, and Guizhou reduced production, while Inner Mongolia, Gansu, Shaanxi, Guizhou, Chongqing, Northeast China, Qinghai, and Ningxia saw slight increases. The national operating rate in October fell slightly by 1.02% due to the end of the flood season in Sichuan and Yunnan. In November, the national operating rate is expected to decrease to 48%, with total output around 380,000 tons.

Downstream Market
Aluminum Alloy Ingots:This month, prices in the aluminum alloy ingot market rose by 200-250 RMB/ton, with aluminum prices remaining high. Aluminum plants’ demand for industrial silicon remains stable, primarily for essential purchases, while price competition among traders has led to aluminum plants purchasing at prices below market levels.

Organic Silicon:Organic silicon market prices dropped by 200-1,200 RMB/ton due to weak demand from end-users. To stimulate orders, silicon plants have actively lowered prices.Organic silicon producers raised their purchase prices for chemical-grade silicon by about 200 RMB/ton. With rising spot prices, silicon plants are reluctant to accept low-priced orders.

Polysilicon:The polysilicon market remained stable this month, with leading companies holding prices firm, while second- and third-tier producers with high inventory levels have started to sell at lower prices. Rumors of energy-saving production cuts in the silicon materials market have led to increased futures and stock prices in the photovoltaic sector. After the National Day holiday, polysilicon plants resumed ordering silicon powder, leading upstream silicon plants to raise prices. However, polysilicon manufacturers were unable to afford the higher prices,
creating difficulties for processing plants in the middle of the supply chain.

Silicon Metal Market Forecast for Next Month

Cost Side:This month, raw material prices fluctuated slightly. With the arrival of winter in the north, transportation costs are expected to increase. As winter is peak coal season,frequent price fluctuations in coal and silicon are anticipated, although overall cost changes should be minimal. Southern markets are seeing electricity price increases, and fewer companies are able to produce, with the northern market expected to become the main supplier in the future.

Supply and Demand Side: Industrial silicon production increased this month, primarily in the northwest. Production in Sichuan and Yunnan decreased significantly at the end of the month, and total industrial silicon production next month is expected to be between 380,000-400,000 tons. Downstream demand for aluminum and organic silicon remains stable, while some polysilicon companies have confirmed production cuts, reducing industrial silicon demand by 25,000-30,000 tons. November may see a surplus of around 40,000 tons, and even with production cuts in Sichuan and Yunnan, stockpiles may not decrease.

Price Trend: Prices this month saw slight upward adjustments, mainly due to limited spot sales. Next month, industrial silicon prices are expected to follow this month’s trend, remaining stable with slight upward movement.