Expanded losses lower Dec operating rates across silicon plants

SHANGHAI, Jan 15 (SMM) – Falling prices of silicon and greater losses in the dry season significantly lowered operating rates across domestic silicon plants by 15.6 percentage points from November, to 35% in December, an SMM survey found. 

On a yearly basis, rates fell 2.8 percentage points. Production of silicon metal stood at 132,000 mt last month, down over 40% from November. As the dry season set in, higher costs pushed silicon smelters in Sichuan and Yunnan provinces to slow operation, and this accounted for majority of the drop in production. 

Falling prices of silicon also depressed production enthusiasm across smelters across Xinjiang, Inner Mongolia, Guangxi, Guizhou, and Hunan in December. Low inventory turnover of finished products eroded their profits, which drove them into suspension or production cuts. 

For January, weak prices of silicon may expand production cuts at domestic plants. This could lower the operating rate to 34% in January. Some smelters in the north planned to cut January output to clear inventories of finished products, in light of fewer trading days in January and logistics suspension around CNY.