SMM

As the year-end approaches, raw material procurement by silicon metal manufacturers remains weak, with prices largely stable.

Currently, only charcoal prices remain at a relatively high level. Due to the reliance on overseas imports and the narrow supply channel, prices have been maintained above 3,000 yuan/mt supported by the high operating rate of silicon enterprises in south-west China during the rainy season. However, due to the large-scale production reduction and suspension by silicon enterprises in south-west China at the end of October, the demand for charcoal has been continuously weakening. As December approaches, the number of operating silicon enterprises in Yunnan continues to decrease, and the demand for charcoal is gradually declining. It is expected that the charcoal demand from silicon enterprises in Yunnan via tender will significantly decrease next month. Coupled with the increase in port arrivals and the influence of oversupply, there is a probability that the monthly price of charcoal in December may decline, potentially falling below 3,000 yuan/mt by year-end.

Although charcoal prices are expected to have room for decline in December, the production pressure on operating silicon enterprises in Yunnan continues to increase. Since the main production cost of silicon metal remains electricity costs, with high electricity prices in December, the production costs for silicon enterprises in Yunnan remain high. Therefore, even though charcoal prices are expected to decrease in December, the impact on overall cost changes is limited. Overall, charcoal prices remain at a relatively high level compared to other carbonaceous reducing agents, and the production costs for silicon enterprises in Yunnan remain high.