[SMM Analysis] Silicon prices are sluggish, operating rates in Yunnan remain low, charcoal prices fell slightly

Industrial silicon prices have been running at low levels recently. Yunnan is still in a dry season. Under the influence of high electricity price cost pressure, silicon prices even in Baoshan area of Yunnan where electricity prices are low, have fallen to the cost line, making it difficult for silicon companies to make profit margins. Downstream purchasers still pushed for lower prices. Under the influence of pressure from many parties, very few silicon companies in Yunnan have restarted operations, and the overall operating rate has remained low. Some silicon companies in Baoshan and Dehong still shut down furnaces for maintenance in March. Although 6 RKEFs in Nujiang have resumed production, Yunnan's average operating rate remains at a low level.

Affected by the sluggish operating rates and weak market conditions, silicon companies in Yunnan have also maintained low demand for raw material procurement. The price of charcoal, which had previously skyrocketed due to the tightening supply of imported charcoal from Myanmar, has also fallen by 200-300 yuan/ton recently. Although the price has not yet reached the low level of last year, but the current order demand is sluggish and the overall sales market is not smooth. The impact of charcoal import restrictions in Myanmar has been greatly weakened. The imported charcoal supply from Laos, Myanmar and other countries has increased slightly. However, under the weak downstream situation, silicon companies have strict control over costs. Coupled with low demand for raw material of local silicon plants, led to a decline in charcoal prices in March. However, as silicon companies in Yunnan gradually resume production during the wet season, and driven by expected higher demand, there will be limited room for a fall in charcoal prices.