In February, both supply and demand for silicon metal are expected to see significant reductions. On the supply side, SMM data showed that domestic silicon metal production in January 2026 reached 375,500 mt, down 5.5% MoM but up 23.5% YoY. The decrease was mainly observed in Xinjiang, Inner Mongolia, and Sichuan. In February, production cuts at large plants in Xinjiang have already taken effect, coupled with further reductions from large plants in Inner Mongolia and Sichuan that began in January. Additionally, fewer production days in February are expected to lead to a significant MoM decline of approximately 27.1% in silicon metal production, with YoY growth also turning negative.
Demand side, demand in the three major downstream consumption sectors weakened in February. Polysilicon, production is estimated to decrease 21% MoM to around 80,000 mt (February has 28 days). For silicone, due to supply-demand relationship considerations after the holiday, some monomer enterprises voluntarily implemented production cuts and reduced operating rates in February. The reduction in aluminum alloy was mainly concentrated in the secondary aluminum alloy sector, jointly affected by enterprise closures during the Chinese New Year break and weak downstream orders.
Overall, the silicon metal market experienced a relatively loose supply and demand balance in January, with a theoretical inventory buildup of approximately 30,000 mt. In February, both supply and demand contracted simultaneously. Considering the uncertainty surrounding production cuts in the silicone sector, the market balance in February is expected to be either tight or show slight destocking. The current high industry inventory still requires time to be digested, and the sustainability of destocking will be a key variable influencing price trends and market sentiment. From a certainty perspective, it is unlikely that a significant portion of idled polysilicon capacity will resume production in March–April, thereby boosting silicon metal demand. On the supply side, silicon metal operating rates exhibit greater flexibility. Therefore, whether there will be a notable increase in production resumptions after the Chinese New Year—or conversely, if resumptions fall short of expectations or even lead to further production cuts—will directly shape the evolution of supply-demand dynamics and market sentiment, serving as an important signal for price support.
