Yunnan’s Production Cut in Silicon Metal Started on Sep 20, Output to Fall Sharply under Dual Control Policy

SHANGHAI, Sep 23 (SMM) – Yunnan Provincial Development and Reform Commission announced on September 11 that from September to December, the local average monthly output of industrial silicon should not exceed the 10% of the August output, which means the output will be cut by 90%.

The Development and Reform Commission in Dehong issued a document on September 19 to limit the local production and energy consumption of high-energy-consuming industries. The 29 silicon plants in Dehong are required to suspend production during September 20-30, expect for September 26.

The silicon plants in Dehong have suspended production since the morning of September 20, and they can gradually resume production since October 1. However, whether the production can be actually resumed is uncertain due to the low rainfall and stricter dual control policy. In the other two major production areas in Yunnan, some plants reduced production on the morning of September 20 in Baoshan, and the production cut plan in Nujiang is unclear.

According to SMM survey, the output of silicon metal in Yunnan was 71,000 mt in August. West Yunnan is expected to enter the dry season at the end of October, and the output during September to December is originally expected to be around 190,000 mt based on the normal production. However, Yunnan received the first-level warning of the dual control implementation on energy consumption, and the production restriction is carried out.

SMM gives the following estimations about the silicon metal output based on the two assumed production situations.

1. The silicon plants in Yunnan maintain the current operating rates until the end of October, and fully suspend production in November and December.

In this case, Yunnan's silicon metal output will stand at 54,000 mt in September and 25,000 mt in October, and the total output from September to December will be 79,000 mt, a decrease of 58% from the normal output. China’s total output of silicon in 2021 will be 327,000 mt, down 249,000 or 43.2% on the year.

2. The silicon plants in Yunnan maintain the current operating rates in September, and control the average monthly output under the 10% of the August output from October to December.

Then Yunnan’s silicon metal output from September to December will total 61,000 mt, down 68% from the normal output. In this case, China’s total silicon metal output in 2021 will be 309,000 mt, down 267,000 to 46% on the year.