Chemical grade silicon metal market forecasts positive in Q4

Asian Metal: Hello, Mr. Peng, thank you for accepting our interview, please briefly introduce your company first.

Mr. Peng: Sichuan Yingjing Jianyin Metallurgy Co. Ltd. is a specialized metallurgical enterprise under Ya'an Jianyin Building Materials (Group) Co. Ltd. with commercial sections such as real estate, building materials, metal smelting and hydropower generation, with four 12,500kVA furnaces, which started smelting ferroalloys in 2000, and converted three of them to produce silicon metal in 2014, with a total installed capacity of 37,500kVA, currently the annual production capacity of silicon metal is about 25,000t. We mainly produce chemical grade silicon metal 4-2-1 and have established long-term and stable cooperation relationships with many major domestic silicone manufacturers.

Asia Metal: How do you view the current basic ecology of upstream chemical grade silicon metal in China?

Mr. Peng: There are three major silicon production areas in China, namely Xinjiang, Yunnan and Sichuan. Xinjiang faces a shortage of raw material supply of silica, while Yunnan is completely constrained by hydropower, with only half a year of production. Based on the quality of raw material supply and stability, transportation costs due to geographical location, Sichuan is relatively advantageous.

Asia Metal: How do you see the impact of the development of the silicone market on the production of chemical grade silicon metal?

Mr. Peng: Our monthly production capacity is around 2,000t, which can basically be consumed by our regular customers. From next year onwards, a number of downstream silicone plants have plans to increase production, which boosts the confidence of our upstream manufacturers.

Asia Metal: How do you think the increased production of chemical grade silicon metal in Yunnan will affect the market in the future?

Peng: Since the price difference between chemical and metallurgical silicon metal is already above RMB1,000/t(USD148/t), higher than RMB500-600/t (USD74-89/t), a large number of manufacturers are switching to produce chemical grade silicon metal. However, there are still many problems. Yunnan has the advantage of cheaper electricity prices and lower production cost during rainy season, but it lacks the support of large hydropower, so it is unable to stabilize production year-round, so it is unable to stabilize the distribution channel. Therefore, with years of market feedback, it did not affect us much.

Asia Metal: How much impact do you think polysilicon has had on the chemical grade silicon metal market?

Peng: As far as I understand, the polysilicon market for chemical grade silicon metal 4-2-1 consumption is very limited, and they mainly consume silicon metal 5-2-1 instead, so the impact is also limited.

Asian Metal: What are your expectations for Q4 of this year's silicon chemistry market?

Mr. Peng: The rainy season in the southwest will end next month and the total output will decrease soon, combined with the current stable supply and demand relationship, we have more confident on the market in Q4.

Asian Metal: What is your company's future development plan?

Mr. Peng: In short term, we will continue to improve our internal management, production and sales in order to continuously improve the competitiveness of our company. In the long term, we will expand our production capacity when the conditions allow, which will give the company a lot of preferential conditions in terms of policy support and taxation, making the company grow significantly.

Asia Metal: Thank you again Mr. Peng for accepting our interview, and wish your company better and better.

Mr. Peng: Thanks.