SMM China July Silicon Metal Production and August Forecast

According to SMM, China's silicon metal output in July was 487,300 mt, up 7.5% MoM (+34,100 mt) and up 72.3% YoY (+204,400 mt). From January to July 2024, the total output was 2.7644 million mt, up 39.7% YoY (+786,300 mt).

In July, China's silicon metal output continued to increase, mainly due to the resumed capacity in Sichuan and Yunnan in late June or early July. It continued to release output in July, contributing an increase of nearly 35,000 mt. The three major northern producers maintained high operating rates, with a high regional capacity share. Although some capacity reductions occurred in places like Ili, the overall output in Xinjiang remained high. In July, silicon metal spot prices continued to decline, and some producers in regions like Fujian, Henan, and Guangxi reduced or halted production, leading to a decrease in output. However, on a national scale, the increase in regional output was more significant, resulting in a continued MoM increase in July output.

Looking into August, some small silicon metal producers in Xinjiang, Henan, Sichuan, and Chongqing reduced production in late July and early August. In addition, with the Si2409 silicon metal futures contract falling below 10,000 yuan/mt on August 8, market sentiment was hit, potentially accelerating the reduction of loss-making capacity. The expected increase in new capacity is limited, and it is anticipated that silicon metal output in August will fall below 470,000 mt.