Industrial Silicon Metal Output Topped in Nov Throughout 2021

SHANGHAI, Dec 7 (SMM) - Domestic industrial silicon metal output stood at 300,000 mt in November, an increase of 10% month on month and 29.5% year on year, according to SMM survey.

Xinjiang and Fujian, the two major producing regions of industrial silicon metal, contributed most of the increases in November after local production was resumed, and the silicon metal manufacturers in Yunnan also raised their operating rates slightly. The output in Sichuan dropped fractionally from a month ago amid power rationing and environmental protection inspections. While Heilongjiang barely saw any output in November due to severe COVID-19 pandemic.

The electricity prices have adopted the pricing scheme for dry season in south-west China starting from November 26, which has been closely watched by the market. The electricity prices in Yunnan and Sichuan have been adjusted to different degrees. Compared with the wet season, the average electricity price was raised by about 0.3 yuan/kWh to about 0.6 yuan/kWh. The electricity costs of silicon metal manufacturers in December will increase significantly compared with that in November, but there has been no massive production reductions for now. It is partly because the current industrial silicon metal are still quite profitable. And as the rainy season in Yunnan has been delayed this year, the power supply of small hydropower projects in the region can support the production of most silicon metal manufactures as of early December. While the manufacturers in Sichuan will maintain production with the supplement from extensive power grid, except for a few that will suspend the production.

As silicon metal prices fell close to the breakeven point, it is expected that the time for extensive production cuts in the south-west region will be postponed until the end of December. It is estimated that the output of industrial silicon metal in December will be around 295,000 mt, and our forecast for the full-year output has been adjusted to 2.94 million mt, a year-on-year increase of 33.6%.