SHANGHAI, May 13 (SMM) – Operating rates across Chinese silicon metal producers rebounded in April from a four-year low level a month ago, rising 3.3 percentage points on the month and 0.1 percentage point on the year to 33.3%, showed an SMM survey.
The average operating rates for May is expected to further recover to 36%, SMM estimates.
Resumption of production in Yunnan and Sichuan accounted for the rally in April’s operating rates. Silicon plants in Nujiang of Yunnan and Ngawa and Leshan of Sichuan reopened part of their capacity ahead of the arrival of rainy session, and this offset some capacity curtailment in Xinjiang and Chongqing due to losses and tight ore supply.
The average operating rates of silicon producers in Yunnan increased 11 percentage points on the month to 25.9%, with the rate in Sichuan climbing 8 percentage points to 18.5%.
The respective rates in Yunnan and Sichuan are likely to rise to 36% and 21% in May as Nujiang of Yunnan enters the rainy season and the dry season ends in Sichuan this month. Due to current issues of low profits and lack of hydropower, greater-scale resumption of operations is expected in June when a full-scale rainy season arrives.
As the ore shortage problem lingers in Xinjiang, a local large-sized producer lowered operating rates to 70% in April to prolong the use of silica. Another major plant in Xinjiang kept running at less than 30% of its capacity as it failed to secure alternative sources of silica. Other small mills in Xinjiang also scaled back production amid limited profits.
SMM assessed the average operating rate of silicon plants in Xinjiang at 33.1% in April, down 2.8 percentage points from March.
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