The silicon conference now taking place in China has provided wonderful overview of the industry. The Chairman of the Silicon Industry Branch of China Nonferrous Metals Industry Association Zhao Jiasheng delivered a paper, “ Current Status and Development Trend of China’s Silicon Industry in 2018, which detailed the country’s silicon and polysilicon industries.”
According to Zhao Jiasheng, since 2018 China’s silicon industry has shown increased output but the growth rate of demand is less than expected resulting in price fluctuates and declining profitability.
Although the silicon industry is facing a series of problems and problems such as weak phased demand, unbalanced structural supply and demand, and frequent international trade disputes, the future development of the silicon industry will be supported by the state’s support for the development of new materials and new energy industries.
In the first eight months of 2018, China’s industrial silicon prices rose first and then declined, and the overall trend showed a downward trend. Among them, the average price of 553 silicon was rmb12,408 per mt, down 2.3% year-on-year; the average price of 441 silicon was rmb13,448 per mt, down 2.7% year-on-year.
Since March, industrial silicon prices have continued to weaken. By the end of August, the average price of 553 and 441# was rmb11,850 and rmb12,550, respectively, which was 9.8% and 13.2% lower than the price in mid-March.
The main reasons are: new capacity in Xinjiang is gradually released, and supply has increased; demand growth in downstream aluminum alloys and organic silicon has weakened, not as expected, especially polysilicon; the exchange rate market volatility increased, which had a certain impact on exports; finally, the price of industrial silicon raw and auxiliary materials declined compared with the second half of 2017.
According to the statistics of the Silicon Industry Branch, China’s industrial silicon production in the first half of 2018 was 970,000 mt, an increase of 10.23% year-on-year, a record high for the same period. Xinjiang, the region with the largest industrial silicon production, produced460,000 mt in the first half of 2018, accounting for 47.4% of total domestic production, up 21.05% year-on-year.
Yunnan’s production in the first half of the year was 155,000 mt, accounting for 16% of total domestic production, an increase of 3.33%. The increase in production in Xinjiang is mainly due to the smooth operation of the first phase of the Heshun Silicon Industry Shanshan Plant; the increase in production in Yunnan is mainly from Hongsheng Jinmeng Silicon.
Sichuan’s production in the first half of the year was 105,000 mt, accounting for 10.8% of total domestic production, down 4.55% year-on-year. As a province that produced industrial silicon earlier, Sichuan Province has gradually risen in Xinjiang in recent years and the price of some raw and auxiliary materials has risen rapidly. Under the support of no small hydropower price advantage, some silicon enterprises have taken the initiative to reduce production. The output of Sichuan Province showed a slight shrinkage.
On the positive said the continued strong environmental supervision in the second half of the year will boost costs and promote the sustainable and healthy development of the industry. Second, continuous supply-side structural adjustment (elimination of backward production capacity) and limited new capacity will help ease the contradiction between supply and demand.
Finally, the price is close to or lower than the production cost of most enterprises, and the company’s active production cuts in response to falling market prices will also effectively support market prices.