SMM analysis on China June silicon metal output and July forecast

According to SMM, China's silicon metal output in June was 453,100 mt, up 11% MoM (+45,100 mt) and 70.9% YoY (+188,000 mt). The output in H1 totalled 2.2771 million mt, up 34.32% YoY (+581,900 mt).

Silicon enterprises in Sichuan and Yunnan gradually entered or were about to enter the rainy season. In May-June, they gradually resumed production. By June, the operating rate in Sichuan had basically returned to the level of previous rainy seasons, while the resumption pace in Yunnan was slightly slower, with some enterprises choosing to restart in late June or early July. It is expected that the operating rate of silicon enterprises in Yunnan will reach its annual peak in July-August, and the total silicon metal output in Sichuan and Yunnan will increase by nearly 60,000 mt MoM. While silicon plants in Sichuan and Yunnan resumed production, those in Xinjiang saw a MoM decrease of nearly 15,000 mt due to capacity maintenance or production cuts. The operating rate in Inner Mongolia fluctuated little in June.

Entering July, some of the maintenance capacities in Xinjiang will be resumed, and with the release of capacity, the supply of silicon metal in Yunnan still has room to rise, though the contribution from new capacity is limited amid the slow commissioning progress. In contrast, a few silicon enterprises in Inner Mongolia and Gansu are expected to reduce production due to maintenance or market conditions, but the impact on the national total output is temporarily small. Overall, it is expected that China's silicon metal output in July may increase to around 480,000 mt.