Silicon metal markets remained subdued post-Chinese New Year, with stable prices in China but declines in Germany and the USA. Weak demand, oversupply, and energy costs pressured global producers, prompting supply adjustments.

Silicon metal prices in China remained unchanged during the week ending February 14. However, current market trends suggest potential for price decline once full market activity resumes. Post-holiday trading volumes for silicon metal have been notably low. This subdued market environment has also negatively impacted on the upstream silicon coal sector, characterized by low demand and a prevailing sentiment of price suppression from downstream industries.

The national social inventory of silicon metal experienced a modest weekly increase of 1,000 mt, reaching 544,000 mt on February 14. The Social delivery warehouse inventory, including unregistered warrants and spot cargo, also saw a slight uptick of 2,000 mt week-over-week, reaching 395,000 mt. Despite limited recent cargo movement reported by some warehouses, Huangpu Port warehouses showed improved year-over-year cargo turnover, resulting in a slight inventory increase.

Following the Chinese New Year holiday, inquiry activity in the silicon metal market has gradually picked up. While spot market quotations from suppliers and silicon producers remain relatively stable compared to pre-holiday levels, traders and downstream users are primarily focused on gathering market information and adopting a wait-and-see approach, with actual trading activity yet to begin.

Silicon metal prices in Germany experienced a 3.5% decline. The weakened silicon metal prices have forced several polysilicon producers to curtail production or schedule facility maintenance due to oversupply within the photovoltaic industry.

Elkem has announced production cuts at its Norwegian and Icelandic facilities for the first quarter of 2025, citing planned maintenance and power-related limitations. This trend of production suspensions has spread across industry, with manufacturers facing challenges due to weak demand, low prices, and elevated energy costs.

Silicon metal prices in the USA experienced a slight 0.5% decline. Market participants attributed this to low liquidity stemming from ample supplies. Moreover, decreasing freight rates, reflected in a 5% drop in Drewry's World Container Index to $3,095 per 40ft container this week, contributed to the price decrease. Drewry anticipates further declines in spot rates next week due to post-Chinese New Year holiday demand slowdown.

In addition, the President Donald Trump recently secured access to Ukraine's critical minerals in exchange for US military support in the war with Russia. Ukraine possesses 23 of the 50 strategic materials identified by the US as critical. Additionally, the government oversees more than 30 unlicensed deposits and around 400 promising occurrences, managing key industrial assets capable of producing titanium, aluminum, silicon, germanium, and gallium. This development is expected to boost the silicon metal supply in the USA in the near future.

US silicon metal prices are projected to fall further due to low liquidity and declining freight rates, while in Germany, oversupply and production cutbacks are likely to exert additional downward pressure. Market participants remain cautious amid persistent economic uncertainties ahead.