441# silicon price trend in 2021
Metal silicon experienced a sharp rise and fall in 2021, with the largest increase of 340.64% in the same year. In the first half of the year, the “double carbon” policy laid the foundation for the upward rise of metal silicon cost. From the beginning of the year to the beginning of October, the silicon price Rose gently to a rapid rise. In the third quarter, many factories were limited power and reduced load production. Some factories were affected by the difficult procurement of silicon coal, and the production situation continued to be unsatisfactory, The price support sentiment is high, the market conditions of silicone and polysilicon are good, and the profit supports the rise of silicon price. However, after the National Day holiday, the weakening of downstream consumption capacity led to the inevitable decline of Q4 metal silicon production. In addition, in the second half of the year, relevant national regulations and the supplement of Southern hydropower alleviated the tension of coal and electricity, and the silicon price decreased significantly.
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According to the data monitoring of business society, the average price of metal silicon in 2021 was 21885.34 yuan / ton, an increase of 86.12% over the average price of 11758.65 yuan / ton in 2020 and 88.71% over 2019. This year, metallic silicon repeatedly broke the historical peak, with the highest price of 60625 yuan / ton and the index of 425.46, an increase of 119.34% over the lowest point of 68.77 on September 25, 2016.
From the perspective of supply-demand relationship
In 2021, driven by the easing of the supply of raw silica in Xinjiang, China’s metal silicon output increased restoratively. According to the data of business agency, the total output of silicon metal in China in the first half of 2021 was 1.25 million tons, with a year-on-year increase of 38%. The estimated output in Xinjiang in the first half of the year was 650000 tons, with a year-on-year increase of 50.9%, which was mainly due to the increase of the operating rate of a large plant in Xinjiang and the expected output in Yunnan in the first half of the year was 117000 tons, with a year-on-year decrease of 18%, mainly due to the dual control of local energy consumption and the.
Since the third quarter, most silicon plants in Sichuan and Yunnan have faced the situation of insufficient power supply and difficult operation. The rain in wet season is less than expected, and there are too many high energy consuming industries introduced in Yunnan, which makes the power contradiction more prominent. In September, Yunnan development and Reform Commission controlled the industrial silicon production to ensure that the monthly average output of industrial silicon enterprises from September to December is not higher than 10% of the output in August (i.e. 90% output reduction), Undoubtedly, it will make the silicon market worse. Due to excessive energy consumption in Xinjiang in the first half of the year, the dual control was further tightened in the second half of the year, the supply of raw silica in Xinjiang decreased, and the operating rate also decreased. The output of a large factory in Xinjiang decreased sharply due to environmental protection inspection.
It can be seen that in the third quarter, the main producing areas of metal silicon, Yunnan and Xinjiang, were under pressure. Double control, limited production and insufficient power supply made it difficult for the silicon plant to release production normally from August to October. However, in the fourth quarter, due to the high silicon price and the weak willingness of downstream goods preparation, the expectation of large-scale shutdown of the silicon plant fell short. In November, the metal silicon output increased by 27000 tons to 300000 tons month on month, and the resumption of production of large factories in Xinjiang increased, Some silicon plants in Yunnan have increased their load on a small scale, and the output of Sichuan has decreased slightly month on month due to power restriction and environmental protection. Generally speaking, the start-up of silicon plants is high, and the social inventory is high year-on-year.
When the silicon price continues to be high, the silicon plants have high enthusiasm for starting work, and the continuously increased output has some problems in consumption. In the case of inventory backlog, oversupply, prices fall, and the market enters the regulation mode, some factories in areas with low production advantages will reduce production or even shut down to alleviate the decline.
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From the perspective of downstream products
The trend of silicone and metal silicon is roughly consistent, and the price, like metal silicon, has reached a ten-year high. Silicone started relatively normally, focusing on maintenance. In the first half of the year, the demand for silicone increased by 20%, and the export volume increased by 166300 tons, an increase of 38% over the same period. In the third to fourth quarters, silicone entered the maintenance period, the apparent demand was relatively low, the spot supply in the plant was tight, and the operation capacity of major units was low.
From January to July, the demand for polysilicon increased by 15%, and many factories produced at full load or even overload. The supply of polysilicon continues to be tight, and the production capacity has not been fully released in the first half of the year. It is expected that 150000-200000 tons of new production capacity will be put into operation in the second half of the year. Many enterprises build new energy to balance high energy consuming industries, so there is uncertainty. However, the increment of metal silicon in polysilicon next year is very considerable. It is preliminarily estimated that the production capacity of polysilicon will reach about 2.27 million tons in 2025.
Review and Prospect
In the whole year, due to the short wet season in Yunnan, which affected the power supply capacity, the start-up time of factories in Sichuan and Yunnan was shortened, the enterprises in the metal silicon industry chain did not establish a good safety inventory, and the frequent situation of silicon factories in Xinjiang also reduced the output. Therefore, in the first half of the year, the supply was extremely short, and the rising power and raw material costs increased the production costs of factories in production, Metal silicon prices rose as a whole. 3ă During the transition between wet season and dry season in the fourth quarter, the purchase intention of the three downstream of silicone was weakened due to the callback of silicon price, and the market began to face the problem of upstream and downstream game of demand reduction.
The new capacity of organosilicon and polysilicon is expected to be released in the first half of 2022. Metal silicon is expected to get a large number of new capacity in the wet season of 2022. It is expected that the market of metal silicon will be stable, medium and strong in the future. In terms of risk, more attention should be paid to the release speed of new capacity in the downstream next year.
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