Current Status Of Industrial Silicon Market

Overview of global supply and demand: High overseas electricity prices have suppressed the enthusiasm for industrial silicon production, and the output has remained stable. The electricity costs in Norway and the United States have risen, the global manufacturing output has declined, and the new export order index has continued to decline. In 2023, the industrial silicon industry took the initiative to destock, the supply pressure was high, and the price once fell below the production cost line. In the first quarter of 2024, the supply and demand balance sheet turned to surplus, and the price was under pressure. Supply pressure increased in the third quarter, and with the arrival of the dry season in the fourth quarter, the supply pressure eased, and demand remained weak.
Capacity distribution: China occupies a dominant position in the global industrial silicon production capacity, accounting for 91% of the global production capacity in 2022 and falling to 83% in 2023. Asian countries such as Vietnam, India, Malaysia and Thailand account for more than 60% of overseas production capacity. The proportion of US production capacity increased from 6% in 2022 to 12% in 2023.
Demand structure: The demand for polysilicon has increased rapidly in the rapid development of the photovoltaic industry chain, accounting for nearly 50% of the industrial silicon consumption structure. The photovoltaic industry is the main consumer sector of industrial silicon, followed by the transportation, real estate and power electronics industries.

China's market size: China's industrial silicon market leads the world in both production and consumption. China's industrial silicon market is mainly concentrated in Xinjiang, Southwest China and Sichuan, which have become the main production bases of polysilicon production capacity due to their low-cost coal resources and electricity cost advantages. Data from March 2024 showed that Xinjiang, Inner Mongolia and Sichuan accounted for a total of 75% of polysilicon production capacity. In addition, Inner Mongolia and Yunnan also occupy an important position in silicon wafer production capacity, accounting for a total of 66%. The production of industrial silicon in these regions is stable. Although some small factories have stopped furnaces for maintenance due to price fluctuations, the overall supply pressure is relatively large, and there is uncertainty about the time of future capacity release.
Import and export situation: In 2023, China's industrial silicon exports will rebound due to the start of the overseas inventory replenishment cycle, and the annual export growth rate is expected to turn positive. However, the slowdown in global economic growth and the intensification of geopolitical crises have led to a decline in demand, resulting in weak export volume. In 2024, as overseas demand rebounded and domestic prices fell, exports increased significantly, with 64,785 tons exported in August, up 49.6% year-on-year. In terms of polysilicon, imports declined year by year, while exports increased. In 2024, exports were close to imports, mainly to Vietnam and Malaysia.

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