Cost Support for Electrode Used in Silicon Production Continues to Strengthen, but Price Increases Remain Challenging [SMM Analysis]

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Under the continued weakness in silicon metal prices, fluctuations in silicon metal production costs have drawn significant attention. Particularly, the price of calcined petroleum coke, a key material in the cost structure of electrodes used in silicon production, has been rising steadily for months. With the strengthening cost support, whether the prices of electrodes used in silicon production will increase has become a focal point of concern.

Currently, the prices of electrodes used in silicon production have been stable at low levels for a long time. Affected by the weak silicon metal market downstream, the demand for these electrodes has also declined. At present, the profit margins in the electrode segment are minimal. However, considering the production cycle of electrodes used in silicon production, the impact of fluctuations in overall raw material costs tends to lag. Therefore, the continuous monthly increase in the price of calcined petroleum coke as a raw material for these electrodes will take some time to actually affect the cost of electrodes used in silicon production.

According to feedback from some manufacturers of large-diameter graphite electrodes used in silicon production, the downstream silicon metal market remains weak, and most orders at silicon plants are long-term contracts. This makes it difficult to cancel orders and renegotiate prices. Although cost support from raw materials continues to strengthen, it is feared that actual price increases for electrodes used in silicon production will still face significant challenges. Moreover, most downstream silicon metal enterprises are still operating below the cost line, with very low acceptance of raw material price hikes. As a result, the prices of electrodes used in silicon production are likely to continue operating in a stable trend.

However, as the cost of electrodes used in silicon production continues to rise, if electrode prices remain stable, the electrode segment may gradually enter a loss-making production phase, with production pressure mounting.