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Industrial silicon, also known as metallic silicon, has a wide range of applications:
Industrial silicon is a kind of silicon (content more than 98%) product produced by smelting silica and reducing agent in submerged arc furnace.
The upstream is mainly silicon ore such as quartz, energy such as electric power, coal and oil, and the downstream is the core raw materials in many fields such as polysilicon, silicone and aluminum alloy.
Under the background of “double carbon”, the new capacity of China’s industrial silicon is strictly controlled:
In 2021, China’s industrial silicon production capacity decreased by 1.13% year-on-year. In the process of smelting industrial silicon, the reduction reaction needs to reach and maintain a high temperature level, which will produce high power consumption. The production of 1 ton of industrial silicon consumes about 13000 kwh.
Due to the high energy consumption and serious pollution in industrial silicon production, it is an industry restricted by the state, and the new production capacity is strictly controlled.
Leading enterprises will actively expand production capacity, and the industry concentration will be further improved:
The concentration of industrial silicon industry is still low, CR10 is only about 30%, among which Hoshine Silicon Industry Co.Ltd(603260) , Changji Jisheng and Hongsheng Jinmeng are the three largest industrial silicon production enterprises in China.
It is expected that the new production capacity will be put into operation from 2022 to 2023. The active expansion of production capacity of leading enterprises will replace the stock production capacity of some small-scale enterprises that do not meet the environmental protection standards, and the industry pattern will be further optimized.
Downstream photovoltaic and organic silicon industries are booming, and the demand side of industrial silicon is expected to maintain a rapid growth rate:
In 2021, China’s apparent consumption of industrial silicon was 1823800 tons, a year-on-year increase of 23.50%, significantly higher than the growth rate of China’s industrial silicon output (11.27%).
Driven by the new national energy policy, the installed capacity of photovoltaic will continue to increase in the future, which will drive the demand for polycrystalline silicon and industrial silicon.
We estimate that the new capacity of silicone monomer in China will be about 900000 tons in 2022, and it is estimated that the new demand for industrial silicon will be about 230000 tons in 2022. China’s industrial silicon supply and demand will show a tight balance or even gap, and the price center is expected to move up gradually.
Market review:
Sector performance: this week, CITIC’s primary petroleum and petrochemical index rose or fell by + 1.95%, ranking fourth among 30 industry indexes. This week, the Shanghai index rose or fell by – 0.94%, and the CITIC primary petroleum and petrochemical index was + 2.89% relative to the Shanghai index. The rise and fall of petroleum and petrochemical sub sectors: oil sales and storage (+ 3.86%), other petrochemical (+ 2.98%), oil exploitation (+ 1.67%), oil refining (+ 0.58%), engineering services (+ 0.39%), and oilfield services (- 1.08%).
Rise and fall of individual stocks: this week, the petroleum and petrochemical sector led the rise of individual stocks, including Hengli Petrochemical Co.Ltd(600346) (+ 8.20%), Maoming Petro-Chemical Shihua Co.Ltd(000637) (+ 6.90%), Rongsheng Petro Chemical Co.Ltd(002493) (+ 6.69%), Hy Energy Group Co.Ltd(600387) (+ 5.22%), Xinjiang International Industry Co.Ltd(000159) (+ 3.56%); Stocks leading the decline include Guangdong Modern High-Tech Fiber Co.Ltd(300876) (- 5.86%), Oriental Energy Co.Ltd(002221) (- 5.20%), Beijing Sanlian Hope Shin-Gosentechnical Service Co.Ltd(300384) (- 4.91%), Suzhou Douson Drilling&Production Equipment Co.Ltd(603800) (- 4.79%), Zhejiang Hailide New Material Co.Ltd(002206) (- 3.46%), etc.
Risk warning: policy risk; Geopolitics exacerbates risks; The risk of sharp fluctuations in crude oil prices and the risk of continued deterioration of the global covid-19 epidemic;
