2010 Silicon Metal Production and Cost

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- To Analyze China silicon metal production status and factors affecting silicon metal production cost.
- To evaluate investment prospect and profitability of China's silicon metal industry, combining with silicon metal price trend.
- SMM exclusive survey on capacity, operating rates, cost structure at silicon metal producers.
- To understand silicon metal capacity and distribution in China, and to find out production costs and core competitiveness of Chinese silicon metal producers.

Current Market Scenario & What to Expect Next
Major characteristics of China silicon metal production:
- Small scale but numerous numbers of silicon metal producers;
- Low equipment level; high energy consumption and heavily polluting.
- Cost structure: silica 5%~7%,petroleum coke 8%~10%,charcoal 8%~10%,graphite electrode10~12%, electrical power 55%~60%, others 10%~15%.
- Prices for raw materials and electric power have rallied rapidly in recent year, so silicon metal cost structure has also changed significantly in different period.

Chinese government has strengthened efforts to conduct a nationwide crackdown on companies that heavily consume energy since June 1, 2010, in order to conserve energy and cut emission. At the same time, local preferential electricity prices have been cancelled and punitive electricity prices have been imposed instead. In this context, silicon metal production costs have increased to great extent from that in 2009 and a new wave of production suspension is spreading at certain regions in China. According to provisions stipulated at Guidance of Elimination on Backward Production Techniques and Industrial Equipment at Certain Industry (2010 version) released by Ministry of Industry and Information Technology , furnaces below 6,300KVAshall be eliminated upon the release of this document, and 6,300KVA furnaces should be all eliminated prior to 2012. Elimination deadline in poverty-stricken area designated by Chinese government and in areas using small hydro-electric power plant can extent to 2014. In addition, Myanmar prohibited exports of charcoal to China, bring raw material prices on upward track. In this context, silicon metal production costs in China are also changing.

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