Silicon Metal Producers Still Little Interested in Production Despite Electricity Price Cuts

SHANGHAI, Jun. 28 (SMM) – SMM has learnt that electricity prices have recently been lowered by 10% for silicon metal producers in Guizhou, but are still relatively high compared with prices in other provinces. In this context, silicon metal producers in Guizhou still have no intention of resuming production at present.

Guizhou's Bureau of Price Control issued notice that it would resume electricity policies during high and low-water period from June 1 this year to May 31 2013. This means electricity prices in Guizhou can fluctuate lower within 10% around basic electricity prices during high-water period, and fluctuate higher within 15% during low-water period.

Silicon metal production was depressed after the Guizhou provincial government cancelled the implementation of electricity price polices during high and low-water period, since they cannot bear high production costs. Therefore, the resumption of the policies is undoubtedly favorable news for local silicon metal producers. Now is the high-water period and electricity prices for producers in Guizhou are generally between RMB 0.5-0.51/kwh after being slashed by 10%, which still has no price advantages, however, compared with producers in Sichuan, Yunnan, and Xinjiang. Less than 5 silicon metals in Guizhou stay in production for the time being, with less than 10 smelting furnaces.

While comparatively high electricity prices restrict production at silicon metal producers in Guizhou, most of their smelting furnaces have been listed in the elimination list required by the Ministry of Industry and Information Technology. Against this backdrop, investing in other provinces with lower electricity prices may be a way out for silicon metal producers in Guizhou.