The Current State of Silicon Metal: Supply, Demand and Inventory Insights

As we delve deeper into the world of Silicon Metal, especially in the context of recent market dynamics, several key factors emerge that influence its supply and demand landscape.

In June, the output of metallic silicon  is expected to rebound significantly, with monthly output expected to exceed 350,000 tons, an increase of more than 15% from 303,000 tons in May. This expected growth is mainly due to the accelerated resumption of work and production in Xinjiang, Sichuan, Yunnan and other places, as well as the reduction of electricity prices during the flood season. However, it is worth noting that the output in May fell by 4% year-on-year, mainly due to equipment maintenance in Xinjiang and the adjustment of supporting production capacity in Yunnan and Gansu.

On the demand side, structural differences are evident. Demand for high-purity silicon ( especially metal silicon 2202 ) continues to be strong in the photovoltaic and semiconductor industries. In contrast, demand for low-end products such as architectural aluminum alloys remains sluggish. This difference highlights the changing needs of different industries and the need for manufacturers to adjust accordingly.

Inventory levels also have a crucial impact on market prices. At present, visible inventories, including those at factories and ports, are as high as 198,600 tons, and exchange warehouse receipt inventories have increased by 306,800 tons. These inventory levels are at historical highs, exerting downward pressure on prices. It is worth noting that in May, factories in the northwest region converted their inventories into social non-standard inventories through hedging, resulting in huge stockpiling pressure on metal silicon 421 （）.

In summary, the Silicon Metal Market is experiencing a complex landscape: rising production, differentiated demand across industries, and rising inventory levels. Stakeholders must remain vigilant and proactively respond to these dynamics to effectively respond to future challenges and opportunities.