Weak prices reduce operating rates across silicon plants in Mar

SHANGHAI, Apr 9 (SMM) – Operation across Chinese silicon producers continued to slow in March as weak prices of silicon depressed production enthusiasm at mills and delayed their resumption after maintenance. The shutdown of high-cost capacity in Guangxi, Guizhou, Inner Mongolia, Gansu, and Chongqing also lowered operating rates. 

The rates across silicon metal producers in China averaged 33.26% in March, down 0.03 percentage point on the month and down 8.13 percentage points on the year, an SMM survey showed. March’s rate also stood below expectations.

Output of silicon metal in January-March shrank considerably from a year ago, to stand at 455,100 mt. 

Two silicon mills in Nujiang of Yunnan province restarted from the middle of March as the rainy season set in earlier. Other silicon producers in Yunnan planned to resume in the second half of April. Most local silicon plants, except for some with financial difficulties, will be able to operate under full capacity in the wet season from May. 

A full resumption in Baoshan and Dehong of Yunnan is expected at the start of June, but potential desulphurisation issues and lower prices of silicon may delay the recovery of some mills till the end of June.  

While the rainy season will begin in June in Sichuan province, local silicon producers are expected to adjust recovery schedules according to silicon prices. Most local mills produce non-oxidised #553 silicon, with profits close to zero as of Monday April 8. 

March's operating rate in the top production area of Xinjiang increased on the month. An industrial park in Yili of Xinjiang lowered its electricity prices by 0.03 yuan/kWh at the end of March, and this raised operations across local silicon plants. 

Due to weak prices of silicon and equipment issues, Hesheng Silicon and East Hope kept the number of furnaces under operation flat on the month in March, but lower from a year earlier. Major producers in Xinjiang are likely to step up operation to expand their market share if silicon plants in Sichuan and Yunnan recover soon. 

SMM expects the operating rates of silicon producers to rise to 34% in April, driven by higher rates in Yunnan. Capacity cuts are also likely to expand in April.