Operating Rates at Silicon Metal Producers in Dechang Region Extremely Low

SHANGHAI, July 12 (SMM) -- At the beginning of June, silicon metal producers in Dechang region, Sichuan province were noticed that electricity prices will be adjusted from RMB 0.315/kWh to RMB 0.517/kWh, up 65%. Affected by this electricity price adjustment, most producers in that region halted production.

According to SMM sources, among the 16 blast furnaces, only 3 furnaces owned by two producers are at work, resulting in operating rates at only 18.75%. The two producers that still remain normal productions mainly use local hydro grid, and electricity prices are only RMB 0.32/kWh for them, resulting in RMB 2,500/mt lower in costs compared with other producers who use state grid. At present, producers using local hydro grid can enjoy certain cost advantage, but they will also be forced to cut production when enter into low-water period.

To contact the writer on this report: jianghanmei@smm.cn

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