Growth rate of polysilicon consumption was in line with expectations, overseas consumption remained muted

Silicon metal, off-grade silicon (Si ≤ 97%) and secondary silicon (silicon mud silicon) made up the current silicon supply system, with silicon metal supply accounting for nearly 90% of a total supply. Expected supply hike will be mainly contributed by silicon metal and secondary silicon. Silicon metal is mainly used in three major categories, led by polysilicon, followed by silicone and aluminium alloy. In 2023, domestic silicon metal demand from polysilicon, silicone and aluminium alloy sectors is expected to be 1.8 million mt, 1.17 million mt, and 670,000 mt. The future increase in silicon metal demand will mainly be subject to polysilicon and silicone.

Under the background of "carbon peak and carbon neutrality", rapid expansion of photovoltaic upstream and downstream industry chains was reported, and polysilicon industry followed suit. Polysilicon output from the end of 2022 to 2023 is expected to be 1.55 million mt. According to SMM data, polysilicon output was 1.2 million mt in January-October and may be up 84% YoY at 1.5 million mt this year, based on current production progress, which will be in line with expectations and will bring with it a surge silicon metal demand. In 2023, silicon demand from polysilicon will account for 41% of total domestic silicon demand, up 13 percentage points from 2022 and 21 percentage points from 2021. With production hike and capacity expansion of DMC plants via technical upgrades, rising silicone output year by year was felt. As consumption growth rate of silicone was far less than that of polysilicon, silicone’s proportion of total downstream silicon consumption in 2023 will dip 5 percentage points YoY at around 26%. With slowing growth in terminal auto and other industries, aluminium alloy’s consumption share dipped year by year. In terms of exports, weak overseas demand, price advantages of goods from Brazil, Europe and the US and a big rise in domestic consumption lowered the proportion of exports by 5 percentage points.