Silicon metal prices in China and Germany continued their downward trend in mid-March as weak demand, rising inventories, and supply chain shifts pressured the market.

Key Takeaways

• In mid-March, prices fell by in China amid slow trading and pricing disputes, while in Germany prices decreased due to reduced shipping costs and decreased automotive demand.
• Maintenance activities in some silicone monomer plants and slow sales have contributed to reduced demand in China, with rising inventories further pressuring the market.
• Analysts expect that increased production in March, coupled with stagnant demand, will create a surplus, keeping spot silicon metal prices low in the near term.

China

In the downstream polysilicon industry, operating rate is expected to increase in March as compared to lower rate observed in February. While polysilicon production in February was 90,100 mt, production in March is expected to reach 94,600 mt. However, polysilicon plants are yet to show the numbers. Additionally, the production decline was driven by maintenance activities in some silicone monomer plants, thereby reducing demand for silicon metal.

Last week, silicon metal production in China experienced mixed results. Xinjiang's plants increased slightly to 33,300 mt (69% operating rate) following recent restarts. Northwest China held steady at 11,080 mt (82%), whereas Yunnan saw only 1,770 mt produced, operating at 21%. Northwest China's silicon plants maintained steady operations this week but faced slow sales and rising inventories. This, along with a weak silicon metal market, is pushing them towards potential maintenance shutdowns or production halts.

Silicon Metal prices in China witnessed a decline in mid-March, falling by 1.2%. Trading in the silicon market was slow, and industry confidence was moderate. A price dispute arose mid-week and into the weekend, with buyers resisting higher prices and sellers attempting to raise them. Increased production led to minor discounts in certain areas.

Germany

In Germany, silicon metal prices witnessed a similar trend. The silicon-aluminium alloy sector, a major consumer of silicon metal, saw reduced demand from the automotive industry experienced a slowdown. New passenger car registrations in Germany fell by 2% month-on-month to 203,434 units in February, according to the German Federal Land Transport Authority (KBA). In Europe, EV sales for February 2025 were estimated at 230,000 units, an 8% decline from January’s 250,000.

The German silicon metal market saw stable supply in the first two weeks of March, supported by regular production and imports. This occurred alongside a drop in Shanghai-to-Europe shipping costs and continued steady production from major European suppliers like Norway and France. Owing to these factors, silicon metal prices decreased by 0.7%.

Analysts predict that spot silicon metal prices will remain low in the short term. Increased March production, coupled with stagnant demand, is expected to create a surplus by the month's end.