Silicon metal demand by the mainland Chinese aluminum alloy sector in 2017 is forecast to rise 6% year on year to 435,000, on stronger demand from the domestic reformed aluminum alloy and diecast aluminum alloy sectors, the silicon branch of China Nonferrous Metals Industry Association said in a report in its website Friday.
It was citing estimates by its affiliate state-run metals research consultancy Beijing Antaike.
The domestic reformed aluminum alloy and diecast aluminum alloy sectors are forecast to use silicon metal estimated to be 125,000 mt and 310,000 mt, respectively, in 2017, data from Antaike showed.
Silicon demand by the domestic aluminum alloy sector is forecast to keep growing in the 2018-20 period, on anticipated continual demand support by the Chinese reformed aluminum and diecast aluminum sectors, according to Antaike.
China's aluminum alloy sector is forecast by Antaike to use 460,000 mt and 484,000 mt silicon metal in 2018 and 2019, respectively.
It forecast the reformed aluminum alloy sector would use 135,000 mt and 145,000 mt of silicon metal, respectively, in 2018 and 2019, wile the diecast aluminum alloy sector, to consume 325,000 mt and 339,000 mt silicon metal in 2018 and 2019.
Meanwhile, this week, most of the Chinese silicon metal trading was concentrated in Yunnan Province, Central China, the country's biggest silicon base, with provincial silicon output capacity of 1.2 million mt/year, CNIA said in its silicon sector report issued Friday.
The association said trade was thinner this week than last as deals for September between producers and the downstream sector clients had already been signed in early September. It said most of the producers' trade this week was done in Yunnan, thus cutting prices in the province.
Spot prices for 553 silicon metal in Kunming Port, Yunnan were at Yuan 13,100-14,200/mt ($1,965-$2,130/mt) this week, down from Yuan 14,100-14,600/mt last week, while prices for main stream 553 silicon at Tianjin Port, North China were at Yuan 14,500-15,500/mt ($2,175-$2,325) this week, down from Yuan 15,500-15,900/mt last week, data from CNIA showed.
EMISSIONS CONTROL TO CUT WINTER SILICON PURCHASES
CNIA predicted the start of emissions control check in the cities of Beijing, Tianjin, and 26 cities in the Beijing-Tianjin-Hebei and their surrounding areas in the coming winter heat season to cut silicon metal purchases in the coming months.
It said the emissions control check is expected to cut refined aluminum output in North China, thus affecting the downstream aluminum alloy processing, cutting silicon metal purchases.
CNIA said Chinese silicon metal prices might dip in the winter season, but due to rising raw materials costs, including oil coke, clean coal, electrode and power costs, so forecast the price fall to be limited.
In addition, it said the dry climate in South China will arrive two and a half months from now, thus forecast silicon metal supply in China to turn tighter in winter. Silicon metal production in China is heavily reliant on hydro power supply, which is more in rainy season, and less in dry season.
YUNNAN SOLE PRODUCTION ZONE WITH HIGHER OPERATION RATE
CNIA said of the three key Chinese silicon metal zones in China in Xinjiang Uighur Autonomous Region, and the provinces of Sichuan and Yunnan, just the silicon sector in Yunnan currently has higher operations rate as it is less affected by the domestic environment protection control.
It said Yunnan 's overall silicon operations rate was 80% as of end-August, with producers in Xinjiang and Aba County in Sichuan have lower operations rates of 61% and 58%, respectively, as of end-August, from 67% and 63% in end-July, on environment protection check.
Xinjiang, China's second largest silicon producer, has output capacity of 1.05 million mt/year, produced 61,000 mt silicon metal in August, down 3,000 mt from July, data from CNIA showed.
It said the lower output was due to producers in the region being just able to produce one-third to one-fourth of its normal monthly output in August, due to the domestic environment protection monitoring.
Sichuan is China's third biggest silicon production base, with total capacity of 700,000 mt/year, data from CNIA showed.
