Energy & Chemicals Industry Analysis

Overview of Development of China’s Industrial Silicon Industry in 2018

In 2018, the production volume of industrial silicon in China totaled 2.40 million tons, increasing by 9.10% YOY. Industrial silicon production exceeded 1 million tons in Xinjiang for the first time while it decreased in Yunnan for the first time over the past 10 years. The production capacity and production volume of industrial silicon in Xinjiang accounted for 33.60% and 42.50% respectively of the national total. In addition, the top 10 producers contributed 1,097,000 tons or 45.71% to the production volume of industrial silicon in China, representing a YOY increase of 3 percentage points in industry concentration ratio. According to CRI, of the top 10 producers, four Xinjiang-based producers accounted for 80% of local industrial silicon production; three Yunnan-based producers accounted for 34.80% of local industrial silicon production; two Sichuan-based producers accounted for 19.30% of local industrial silicon production.

In 2018, the consumption of industrial silicon in China reached 1.56 million tons, increasing by 9.90% YOY. The industrial silicon used in aluminum alloys and organosilicon showed YOY increases of 11.10% and 8.30% respectively, accounting for 75% of the industrial silicon consumption in China. As affected by the Circular on Issues Concerning Photovoltaic Power Generation in 2018, the production volume of polysilicon fell in the second half of 2018. However, driven by the expanding production capacity and production volume of polysilicon, the industrial silicon used in polysilicon grew by 9.70% YOY, accounting for 21.80% of the industrial silicon consumption in China. Overall, the growth of domestic demand for industrial silicon slackened and fell short of expectations. Besides, the export volume of industrial silicon decreased to 815,000 tons by 1.50% YOY, accounting for 34.20% of the domestic production volume and satisfying 43.40% overseas demand.

In 2018, China’s industrial silicon industry became less profitable because of multiple factors. According to CRI, the prices of industrial silicon electrodes, reducing agents and silica dropped by 750 CNY/ton, 260 CNY/ton and 220 CNY/ton respectively while the average market price of industrial silicon fell by 1,500 CNY/ton to 2,400 CNY/ton. As product prices fell more sharply than production costs, most industrial silicon producers just managed to break even or made a loss.

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