The silicon metal market in September 2024

1.Raw Material Market Review

This month, prices in the raw material market for industrial silicon production saw further decreases in petroleum coke and washed coal, with Taiwan coke experiencing the most notable drop, as many low-price offers appeared on the market. Due to the low operating enthusiasm of southern silicon plants, raw material procurement was scattered, leading to a limited supply of petroleum coke and a noticeable price decline. In other regions, petroleum coke prices remained stable. The price of washed coal showed minimal fluctuations, staying within a normal range.

2.Silicon Metal Price Trends

The price of 97-grade silicon increased by 50 yuan/ton this month. Prices of 553# non-oxygenated and oxygenated low-grade silicon were similar, with non-oxygenated industrial silicon not selling well. Some industrial silicon manufacturers have begun adjusting their production processes to produce silicon for the 12th futures contract, leading to relatively higher quotes. However, recent transactions were mainly focused on hedging, making it difficult to achieve high prices in the spot market. Prices for 3303# industrial silicon remained firm, with manufacturers unwilling to reduce prices.

 3.Export Market

In August, China’s total industrial silicon exports reached 64,785 tons, an increase of 21,468 tons year-on-year (up 49.56%) and 10,667 tons month-on-month (up 19.71%). From January to August 2024, cumulative exports reached 483,837 tons, a year-on-year increase of 104,844 tons (up 27.66%).

Exports in August showed a clear recovery compared to July, with the export market gradually returning to normal following earlier disruptions. Inquiries in September remained stable, though foreign buyers continued to offer relatively low prices. Ahead of the National Day holiday, there were no significant orders, with purchases in the export market driven by just-in-time demand. Some export traders engaged in limited stockpiling.

 4.Production and Output Summary by Region

In September, China’s industrial silicon production capacity was 738,650 tons, with 493,180 tons of capacity in operation, representing a capacity utilization rate of 66.77%, down 3.83% month-on-month. Industrial silicon output in September was approximately 458,110 tons, a decrease of 22,650 tons month-on-month (down 4.71%) but an increase of 93,620 tons year-on-year (up 25.69%). Of this, Xinjiang produced 226,600 tons, accounting for 49.46% of the total; Yunnan produced 83,080 tons, accounting for 18.14%; and Sichuan produced 53,700 tons, accounting for 11.72%. From January to September, cumulative output was 3,679,740 tons, a year-on-year increase of 960,900 tons (up 35.35%). In September, 413 silicon smelting furnaces were in operation across the country, one fewer than in August and 28 fewer than in September of the previous year. The operating rate was 58.66%, down 0.48% month-on-month. Southern regions like Sichuan, Yunnan, Gansu, Fujian, and Guizhou saw some production cuts, while northern regions like Xinjiang and Inner Mongolia experienced minor production increases.

 5.Downstream Market

Aluminum Alloy Ingots: Prices for aluminum alloy ingots rose by 500-750 yuan/ton this month. Some small aluminum plants that had previously reduced or halted production have gradually resumed operations, but procurement remains primarily driven by just-in-time demand.

Silicones:The silicone market saw price increases of 500-550 yuan/ton. Large manufacturers were eager for higher prices, though downstream buyers, after placing periodic orders, opted to wait and see. Purchases of chemical-grade industrial silicon by silicone manufacturers fell slightly this month, with most purchases still being demand-driven. Price negotiations and pressure on suppliers also remained.

Polysilicon: Polysilicon market prices remained stable, with leading companies quoting higher prices. However, downstream buyers were not placing orders during this price increase phase and instead focused on consuming previously purchased stock. In terms of industrial silicon powder purchases, polysilicon manufacturers offered low prices, while silicon manufacturers were reluctant to sell at low prices. Intermediate milling plants indicated they were struggling to survive.

 6.Silicon Metal Forecast for Next Month

Cost Side:Raw material prices declined this month, but the downward space is limited. Next month, electricity prices in Yunnan will increase by about 0.02 yuan/kWh, leading to further cost adjustments. Northern electricity prices are relatively stable, but with winter approaching, transportation costs are expected to rise slightly.

Supply and Demand Side:Industrial silicon production saw a slight decrease this month, with no significant production cuts in Sichuan and Yunnan. More concentrated production halts may occur by the end of October, though these could be delayed if industrial silicon prices improve. In the north, some small silicon plants have resumed production, so by the end of next month, industrial silicon output is expected to decrease slightly.

Demand Side:The aluminum market is expected to see a slight increase in demand next month, with the silicone market remaining stable, and polysilicon demand also expected to rise slightly. However, the oversupply situation will likely persist.

Price Trend: Prices remained stable this month, but with macroeconomic developments, some manufacturers are eager to raise prices. If southern silicon plants reduce production, it may boost buyer sentiment. As a result, industrial silicon prices are expected to see a slight recovery by the end of next month.