Silicon Metal prices exhibited divergent trends in December. While prices declined significantly in China due to weak domestic and export demand, they surged in the United States primarily driven by increased freight costs.

In the week ending December 27, Silicon Metal prices in China dropped by 1.7%. The decline in spot Silicon Metal transaction prices is attributed to weak downstream demand, leading some producers to reduce output. According to customs data, China's Silicon Metal exports in November 2024 decreased by 19% compared to the previous month.

The attitude towards purchasing was mixed market participants wary of potential lows in Silicon Metal prices, while others showed a budding interest in buying. Nonetheless, the consensus on the anticipated price trajectory maintained a level-headed perspective with the overall Silicon Metal market remaining gloomy.

In a recent development, Tongwei Green Materials, based in Inner Mongolia, has recently initiated a new Silicon Metal project with a capacity of 120,000 metric tons. This endeavor aims to establish a production line capable of yielding 360,000 metric tons of eco-friendly silicon annually, along with the necessary auxiliary infrastructure.

In the USA, Silicon Metal prices witnessed an increase of 2.5%. The prices in the USA experienced a significant increase due to the US government's move to raise tariffs on imported Chinese solar wafers, polysilicon, and tungsten items. The anticipation of these higher tariffs led to a swift uptick in demand from related industries, which aimed to procure materials ahead of the tariffs taking effect.

The United States has increased the Section 301 tariffs on Chinese imports of solar polysilicon and wafers, crucial components in solar panel production, from the previous rate to 50%. This hike affects the entire manufacturing process of solar panels, ranging from the initial refining of polysilicon to the final assembly of modules.

Furthermore, rising shipping costs from Asia to the US exacerbated the price increase. Increased imports ahead of potential strikes on the US East and Gulf coasts, coupled with the holiday season's tighter shipping schedules, pushed spot rates for shipping containers upwards.

While China grapples with weak demand and oversupply concerns, the US market is experiencing a surge in demand driven by trade policy changes and logistical challenges. Although some markets have seen a surge in trading, it hasn't been enough to counterbalance the effects of low demand. ChemAnalyst predicts that Silicon Metal prices in China may face a decline due to this. Conversely, in the USA, the introduction of additional tariffs and an increase in shipping costs owing to end-of-year traffic could drive up Silicon Metal prices.