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2021

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What is metallic silicon?

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Metallic silicon, also known as industrial silicon, is a product produced by smelting silica and carbon reducing agents in a submerged arc furnace. The main component silicon content is usually above 98.5% and below 99.99%, with other impurities such as iron, aluminum, calcium, etc. In China, metal silicon is usually classified into different grades based on its content of iron, aluminum, and calcium, such as 553, 441, 421, 3303, 2202, and 1101.

 

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什么是金属硅?

 

application area

 

The downstream applications of metallic silicon mainly include organic silicon, polycrystalline silicon, and aluminum alloys. In 2020, China's total consumption was approximately 1.6 million tons, with the following proportion of consumption:

什么是金属硅?

Organic silicon has the highest requirement for metallic silicon, with a chemical grade corresponding to model 421 #, followed by polycrystalline silicon. Commonly used models are 553 # and 441 #, with the lowest requirement for aluminum alloy. However, in recent years, the demand for organosilicon polycrystalline silicon has increased and its proportion has increased. The demand for aluminum alloy has not only not increased but also decreased. This is also a major factor that leads to the seemingly high production capacity of metal silicon, but the low operating rate, and the severe shortage of high-grade metal silicon in the market.

 

Production situation in 2021

 

According to statistics, from January to July 2021, the export volume of metal silicon reached 466000 tons, a year-on-year increase of 41%. The production situation of metal silicon in China. Due to the low price of metal silicon in previous years, coupled with environmental protection and other reasons, many high cost enterprises have low operating rates or are directly shut down. This year, some enterprises have increased their operating rates, but they have also encountered a shortage of high-quality raw materials, power restrictions, and accidents, resulting in limited production of metal silicon. As a major province in metal silicon production, Yunnan's metal silicon operating rate has a significant seasonal correlation, In previous years, the operating rate during the wet season was relatively high. In 2021, due to the delay of the wet season and insufficient power supply, the operating rate of metal silicon was much lower than in previous years. The demand side for organic silicon and polycrystalline silicon was in short supply this year, with high prices. The high operating rate increased the demand for metal silicon, and comprehensive factors led to a serious shortage of metal silicon.

 

 

supply and demand analysis

 

The overall production capacity of metallic silicon is not small and has been in surplus for many years. However, in summary, the main reasons for the current shortage are as follows:

 

1. Due to long-term low prices and environmental factors, some enterprises have ceased production, forming zombie production capacity. There are over 200 metal silicon production enterprises, making it difficult to calculate the actual production capacity and output.

 

2. The rainy season in Yunnan has been delayed, resulting in a decrease in production.

 

3. A large factory has been shut down due to an accident, resulting in a decrease in supply.

 

4. Increase in exports.

 

5. The demand for downstream organic silicon and polycrystalline silicon is increasing.

 

6. High quality raw materials are scarce, and the increase in production is limited.

 

Future trends

 

Based on the supply and demand situation analyzed earlier, the future trend of metal silicon mainly depends on the solutions of the previous few factors.

 

Firstly, for zombie production capacity, prices will remain high, and some zombie production capacity will resume production, but it will take a certain period of time.

 

Secondly, the power rationing order in Yunnan is still ongoing. Due to insufficient power supply, some silicon factories in Baoshan, Yunnan have received power rationing notices and industrial silicon furnaces are still shut down, making it difficult to recover in the short term.

 

Once again, if domestic prices continue to be high, it is expected that exports will decrease. China's silicon metal is mainly exported to Asian countries, although it is rarely exported to European and American countries. However, due to recent global high prices, European industrial silicon production has increased. In the past few years, due to domestic cost advantages, China's silicon metal production has an absolute advantage, with a large export volume. However, when prices are high, other regions will also increase production capacity, and exports will decrease.

 

Finally, in terms of downstream demand, there will be more production of organic silicon and polycrystalline silicon in the second half of the year. The production of organic silicon in the second half of the year will include Star, Yunneng Silicon Materials, Dongyue, and possibly Hesheng Shanshan, with a total production capacity of about 900000 tons per unit. In addition to the 400000 tons of Hesheng Shihezi that have already been put into production this year, the new production capacity this year will be nearly 1.3 million tons. In terms of polycrystalline silicon, the planned production capacity for the fourth quarter of this year is about 230000 tons, and it is estimated that the overall demand for metallic silicon is about 500000 tons. However, the end product consumer market may not consume the newly added production capacity, so the overall operating rate of the new production capacity will decrease.

 

Overall, it is expected that the shortage of metal silicon will continue within the year, but the gap will not be particularly large. Nevertheless, in the second half of the year, organic silicon and polycrystalline silicon enterprises without supporting metal silicon will face challenges.

 

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