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As global aluminum demand continues to soar, driven by industries such as construction, transportation and packaging, the role of silicon metal, especially silicon metal 421, is gaining more and more attention. This growth is mainly driven by the booming electric vehicle market and the ongoing trend towards lightweight materials, which requires high-quality aluminum alloys.

Currently, the metal silicon industry faces many challenges, including imbalance between supply and demand, sharp price fluctuations, and weak demand growth. Oversupply and high inventory levels in the market have led to sharp price fluctuations. The lack of growth momentum in major downstream industries such as polysilicon, silicone, and aluminum alloys has exacerbated market fluctuations.

As the world moves towards a more sustainable future, the metal silicon industry is about to face major changes, especially the EU Carbon Border Adjustment Tax (CBAM) which will be implemented in 2026. This regulation aims to create a level playing field for European companies by imposing tariffs based on the carbon emissions of imported goods. As a result, companies are forced to accelerate the transition to green electricity, which will have a profound impact on the production and export of metal silicon.

At present, the supply and demand of the metal silicon market is seriously unbalanced, and the social inventory has exceeded 610,000 tons. The expected release of production capacity during the flood season in the southwest region has exacerbated the oversupply situation, resulting in continuous fluctuations at the bottom of the market. For this reason, polysilicon companies have taken measures to reduce production in an attempt to stabilize prices. However, the pace of destocking is still slow, and the industry's self-discipline measures have achieved little effect.

As we delve deeper into the metal silicon market in early April 2025, the supply and demand dynamics present a complex picture. The latest data from Baichuan Yingfu shows that furnace operations have been significantly reduced, with only 221 furnaces in operation as of April 3, with an overall operating rate of 27.94%. This is 13 units less than the previous week, mainly due to production cuts at large factories in Xinjiang and sporadic shutdowns in other regions.

As we delve deeper into the world of metal silicon, the latest data from Baichuan and SMM reveal important trends in inventory levels and production costs that are shaping the industry landscape. In the first week of April 2025, social inventory of industrial silicon reached 608,000 tons, an increase of 4,000 tons from the previous week. This increase is worth paying attention to, especially because it reflects the continued fluctuations in market supply and demand.

The inventory trend of industrial silicon market was stable this week. According to SMM statistics, the total inventory including registered warehouse receipts was 869,000 tons as of March 14, with a slight decrease in inventory. Inventory stability is crucial for both manufacturers and suppliers, reflecting the balance of market supply and demand.

The dynamics of silicon metal production are changing significantly as the Southwest enters its rainy season. Increased rainfall has led to a significant reduction in hydropower costs, a key factor for energy-intensive industries such as silicon metal manufacturing. Lower energy costs are expected to spur a recovery in production levels, with output expected to increase to approximately 335,000 tonnes by March.

 As of February 27, 2025, the production situation in my country's metallic silicon industry has shown significant changes. The latest data show that there are currently 240 metallic silicon furnaces in operation nationwide, with an overall operating rate of 31.75%, an increase of 7 from the previous week, and the industry's production has gradually recovered.

The Silicon Metal 441 is currently in a period of major adjustment, characterized by a complex interaction of supply and demand dynamics. As we delve deeper into the current state of this important material, we uncover several key factors that will impact its future.