Silicon prices increased in Xinjiang as demand exceeded supply

SHANGHAI, Aug 27 (SMM) — Prices of chemical-grade silicon in Xinjiang jumped in August as output plunged year on year while demand strengthened. Prices of 421# silicon rose to 13,000-13,500 yuan/mt (by acceptance, delivery to factory) in late August, with the highest ex-factory price at 12,100 yuan/mt, 500 yuan/mt higher than the average price in Kunming.

Tight silica supply, low silicon prices, sudden output cuts and blocked transportation due to the coronavirus pandemic led to a sharp year-on-year fall in metal silicon output in Xinjiang. For January to July, Xinjiang produced 432,000 mt of metal silicon, shrinking 11% or 53,000 mt from the same period last year.

Meanwhile, demand in the area improved on the year. Hoshine Silicon’s 200,000 mt of silicone monomer capacity came online in August 2019, and East Hope’s 30,000 mt of polysilicon capacity has yielded output since March 2020. SMM estimated that demand for metal silicon in the first seven months of 2020 is likely to increase 48,000 mt from the same period last year. Falling metal silicon supply and 521#, 421# chemical-grade silicon with lower quality underpinned silicon prices in Xinjiang even as exports fell sharply in the first half of this year.    

Xinjiang polysilicon producers will continue to purchase silica fume from other areas as local polysilicon capacities are scheduled to recover in September while metal silicon plants are unlikely to raise output significantly in the short term.

Metal silicon plants in Sichuan and Yunnan raised prices as some Sichuan producers cut output due to the floods, and silicon shipments from Xinjiang were hindered. 421# silicon prices are expected to stand at around 13,000 yuan/mt in September.