Supply Growth Outpaces Demand, Average Industry Profit Declines, New Silicon Metal Projects Slow Down [SMM Analysis]

According to SMM data, by the end of 2021, China's silicon metal capacity was 4.98 million mt (based on 300 days of capacity). As of the end of July 2024, domestic silicon metal capacity reached 6.78 million mt (based on 300 days), an increase of 1.8 million mt or 36% compared to the end of 2021.

With more than half of 2024 already passed, some projects have been successfully commissioned while others have experienced delays. SMM has summarized the new silicon metal capacity commissioning progress as follows:

According to the silicon metal commissioning plan at the end of 2023, over 1 million mt of new silicon metal projects were expected to be commissioned in 2024. However, by the end of August this year, the actual commissioned capacity was less than 400,000 mt, with multiple projects experiencing delays. The main reason is that the planning of new silicon metal projects has been intensive in recent years, while the overall downstream consumption growth has not met supply expectations. In 2024, spot silicon metal prices have been declining, with industry profits narrowing or even turning into losses. According to SMM prices, on August 30, 2024, the average price of above-standard #553 silicon metal in east China was 11,700 yuan/mt, down 3,900 yuan/mt or 33% from early January 2024's 15,600 yuan/mt.

There are over 200 silicon metal enterprises in China, distributed in regions rich in resources such as thermal power, hydropower, and mineral coal, including Xinjiang, Inner Mongolia, Yunnan, and Sichuan. The annual capacity of new silicon metal projects is mostly above 100,000 mt. During the industry's capacity expansion process, the competitiveness of integrated or cost-advantaged enterprises will be highlighted. At the same time, new entrants often have strong financial and technological innovation capabilities, accelerating the development process of the silicon metal industry.