SHANGHAI, Sep 12 (SMM) – Operating rates across Chinese silicon metal producers are likely to increase to 56% in September as production across newly-commissioned capacities stabilise.
Chinese silicon metal producers operated at 51.7% in August, up 2.4 percentage points from July, driven by low-cost capacities in Xinjiang, SMM research found. The rate stood 4.6 percentage points higher than the corresponding period last year.
Meanwhile, suspended capacities at producers in Inner Mongolia, Chongqing and Hunan were not keen to resume production given low prices of silicon.
China produced 262,000 mt of silicon metal in August, up 1.3% month on month and 13.7% year on year. This brought the overall output in January-August up 18.7% on a yearly basis to 1.755 million mt.
Hoshine Silicon Industry raised production across its new capacities in August, up over 10,000 mt from a month ago, while output at some producers in Sichuan dipped after natural disasters such as mudslides affected their operation.
SMM sees limited upward room in operating rates across silicon metal producers in Sichuan and Yunnan, two major production areas in China, before the rainy season ends in November, given a tight supply of silica and weak silicon prices.
Social inventories are expected to continue to grow in September-November on new capacities in Xinjiang that would be commissioned in October. Producers in the south are unlikely to cease operation, given existing stocks of raw materials.
