Silicon Coal Prices Decline in Many Regions, but Overall Demand Has Yet to Recover [SMM Analysis]

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Last week, prices of silicon coal, a raw material for silicon metal, were reduced across multiple production regions. However, this week, most coal washing plants still reported limited demand for silicon coal orders. The recent price adjustments have yet to effectively stimulate demand from downstream silicon plants.

Last week, silicon coal prices in Gansu, Ningxia, and Xinjiang regions were reduced to varying degrees. Xinjiang's non-caking silicon coal led the price cuts last Monday, reducing prices by 50 yuan/mt. Subsequently, silicon coal prices in Ningxia and Gansu regions were also lowered. According to market feedback, the price reductions were primarily driven by the continued weak performance of the downstream silicon metal market, prompting silicon coal plants to cut prices to benefit downstream buyers, coupled with low operating rates at silicon plants and subdued demand for raw material procurement.

It is worth noting that actual silicon coal order demand for Xinjiang's non-caking silicon coal in 2025 is not frozen, as annual contracts with several leading downstream silicon metal producers were already signed by the end of 2024. The recent price adjustments were mainly aimed at benefiting downstream silicon plants due to the weak silicon metal market. In other regions, silicon coal order demand remains limited. On one hand, silicon coal in Ningxia and Gansu regions primarily serves small and medium-sized silicon plants in south-west China and northern regions. During the dry season, nearly all silicon plants in south-west China have ceased operations, while small silicon plants in northern regions also implemented small-scale production cuts and furnace shutdowns by the end of 2024. Overall, the current demand for silicon coal as a raw material in the silicon metal market remains weak. Only a few silicon coal plants are fulfilling silicon coal deliveries as per long-term contracts signed with several leading silicon metal producers.

Historically, Q1 is also the traditional off-season for silicon coal demand. Due to temperatures not yet significantly warming, challenges remain in silicon coal mining and fine washing processes. Silicon coal procurement activity typically picks up during March-April. However, constrained by the current sluggish silicon metal market, the resumption of production by plants in south-west China and northern regions may be delayed this year, and raw material restocking plans may also be postponed accordingly. In the short term, silicon coal market demand is expected to remain weak.