Southwest Silicon Plant's Production Resumption Plans Delayed; Silicon Coal Prices Continue to Decline Amid Weak Demand [SMM Analysis]

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Silicon coal market prices have recently continued to fluctuate downward, with the decline mainly concentrated in Ningxia. This is due to the relatively low willingness for production resumption and the delayed production resumption plans in the southwestern silicon production areas downstream this year, leading to an overall postponement of silicon coal procurement plans. As a result, the overall demand for silicon coal in Q1 2025 has remained weak, further causing the continued weakness in silicon coal prices in Ningxia.

In addition to the impact from downstream demand, silicon coal in Ningxia is also significantly influenced by the coking coal market. Since mine-mouth raw coal can be processed into either coking coal or silicon coal, the repeated declines in coking coal prices have to some extent driven down mine-mouth raw coal prices, indirectly causing silicon coal prices to weaken in line with costs.

This week, the decline in silicon coal prices in Ningxia was primarily driven by top-tier enterprises lowering their official prices by 30 yuan/mt. Notably, after this price adjustment by top-tier enterprises, other washing plants in Ningxia and silicon coal enterprises in Gansu did not fully follow suit. Many manufacturers reported that washing plants are currently operating without profit and are unwilling to further reduce coal prices.

Outside of Ningxia, the price of caking silicon coal in Xinjiang has also declined recently. Previously, caking silicon coal prices in Xinjiang had remained stable at relatively high levels. However, under the pressure of rapidly falling silicon coal prices in other regions, the price disadvantage became increasingly apparent. As a result, although official prices remained unchanged until late last month, actual transaction prices had already dropped to around 1,670 yuan/mt. This latest price adjustment has officially lowered the price to the previous actual transaction level of 1,670 yuan/mt. However, according to feedback from some silicon coal traders, Xinjiang's caking silicon coal is also facing sluggish sales, and it is estimated that there will still be room for further price concessions in actual transactions.

Currently, the future price trend of the silicon coal market remains uncertain. From the demand side, silicon plant procurement demand is expected to gradually increase as the rainy season approaches. However, from the cost side, the market may still fluctuate downward in the short term. Overall, the silicon coal market is expected to remain relatively stable, with a possibility of slight price declines influenced by costs.