Sluggish Industrial Silicon Metal Market Weighs on Silica Price in March

SHANGHAI, Apr 6 (SMM) - The industrial silicon metal market continued to slump. The losses of silicon enterprises in South China caused by the high electricity prices during the dry season and the rapid drop in silicon metal prices led to production suspension in Sichuan and Yunnan in March. The sluggish downstream demand further weighed on the silica prices in March.

The main producing areas of silica include Hubei, Yunnan, Inner Mongolia and Shaanxi. The silica produced in Hubei is generally of high quality and is mainly delivered to Sichuan, Gansu, Qinghai, and Inner Mongolia.

Silica produced in Yunnan is mainly delivered to local industrial silicon metal manufacturers and enterprises in Sichuan; that in Guizhou is mainly delivered to local enterprises and enterprises in Yunnan and Sichuan; that in Jiangxi is mainly supplied to industrial silicon metal manufacturers in Fujian. Constrained by the recent decline in operating rates in Yunnan and Sichuan, the demand for silica has shrunk significantly.

According to SMM research, as of March 31, a total of 17 RKEFs in Yunnan and Sichuan have been shut down, involving a monthly output of 13,300 mt. As such, the demand for silica has decreased by about 35,000 to 40,000 mt. Therefore, some silica mining enterprises in Hubei, Yunnan and Guizhou indicated that the prices of silica declined slightly due to the downstream demand cut.

At present, the prices of high-grade silica in Hubei dipped 10 yuan/mt on average to 400-470 yuan/mt in March, the prices of low-grade silica in Yunnan fell 5 yuan/mt on average to 300-360 yuan/mt and prices of high-grade silica in Guizhou dropped 5 yuan/mt to 310-350 yuan/mt.