Supply and Demand Remain Weak; Silicon Metal Production in December Down 18% MoM [SMM Analysis]

SMM, December 31: According to SMM data, China's silicon metal production in December was 331,600 mt, down 73,100 mt MoM (a decrease of 18.1%) and down 5.2% YoY. The total production for the full year of 2024 is expected to reach 4.8988 million mt, up 1.098 million mt YoY (an increase of 28.9%).

In December, silicon metal production in Xinjiang, Yunnan, and Sichuan regions showed varying degrees of decline. The operating rate in Xinjiang decreased mainly due to maintenance of partial capacity by top-tier enterprises in the region during December, with the shutdown and maintenance period spanning the entire month, significantly impacting production. The decline in operating rates in Yunnan and Sichuan was primarily attributed to seasonal effects of the dry season, rising electricity prices, and continuous declines in silicon prices, driving operating rates in silicon enterprises in these regions to a multi-year low. Meanwhile, the release of newly commissioned silicon metal capacity in certain areas contributed to production increases, with regions like Inner Mongolia showing MoM growth in December production.

Entering January, top-tier enterprises in Xinjiang are expected to further expand production cuts, leading to a further decline in operating rates. The number of operating silicon enterprises in Yunnan and Sichuan is expected to continue decreasing, with production further declining. In contrast, production in Inner Mongolia and Gansu is expected to increase in January. Considering the combined increases and decreases, China's silicon metal operating rate in January 2025 is likely to remain weak, with monthly production expected to drop to around 310,000 mt.