Seasonal contraction in silicon supply kicked in in November

SHANGHAI, Dec 6 (SMM) – Operating rate of Chinese producers of silicon metal declined sharply in November, after rising for five consecutive months, on the back of seasonal supply contraction with Sichuan and Yunnan entering dry season.

SMM data showed that operating rates across Chinese silicon metal producers averaged 40.2% last month, down 5 percentage points from October and 10.4 percentage points from November 2018. The average operating rate is likely to slip further to 36.9% in December.

Production of silicon metal in China stood at 194,000 mt in November, 19.9% lower than the corresponding month of 2018. Production in January to November stood at 2.06 million mt, down 18.9% from a year earlier. Silicon output in 2019 is expected to be around 440,000 mt lower than that of 2018.

Operating rates at silicon producers in Yunnan and Sichuan fell to 40.8% and 27.1% in November, down 9.9 and 7.9 percentage points year on year respectively, with most plants suspending operations in Yunnan’s Dehong and Lincang and Sichuan’s Liangshan and Ya’an. However, some producers in Yunnan’s Baoshan and Nujiang and Sichuan’s Leshan and Aba maintained operations to fulfill long-term supply contracts.

Producers in north China’s Xinjiang, meanwhile, stepped up operations, but the average operating rate for the region only inched up 1 percentage point last month as the major producer Hoshine curtailed production.

Operating rates at silicon producers in Fujian, Hunan and Shaanxi increased sharply last month, as profit margins improved after silicon prices rose in October.