The industrial silicon market remained sluggish throughout 2025, with prices declining steadily in the first half of the year. By late June, prices had fallen to their lowest level in over a decade. For the full year, prices across all industrial silicon grades cumulatively declined by 1,700–2,300 RMB/ton, representing a drop of approximately 18%. At Tianjin Port, the mainstream transaction price gradually slid from 11,000–12,200 RMB/ton at the beginning of the year to a low of 7,600–10,300 RMB/ton, while factory-gate prices bottomed out at 7,300–7,500 RMB/ton.

Market sentiment remained persistently pessimistic, with futures prices continuously testing lower levels driven by fundamentals centered on high inventory levels. The main contract plummeted from RMB 11,300 to around RMB 7,000. Following the July Central Financial and Economic Work Conference, which proposed policies to “counter internal competition,” accelerate the elimination of outdated production capacity, and regulate low-price disorderly competition, industrial silicon futures prices stabilized and rebounded amid this policy stimulus. The polysilicon industry actively responded to the “anti-internal competition” call, boosting industrial silicon market sentiment and driving up manufacturer quotes. As futures prices recovered into profitable territory, factory hedging operations significantly increased, transferring large amounts of factory inventory to spot-futures traders.

Regarding downstream demand:

Polysilicon enterprises saw operating rates persistently decline to around 30% due to the combined impact of “anti-internal competition” and “reserve accumulation” policies; The organosilicon industry, after maintaining roughly 80% capacity utilization, also adjusted downward to below 70% in response to anti-overcapacity and carbon reduction policies. Overall, downstream consumption showed localized weakness, with market supply-demand dynamics still awaiting further restoration.

2025 Industrial Silicon Price Trend Review

The 2025 industrial silicon price trajectory can be divided into three phases:

Phase 1: January-June Supply-demand tensions intensify, prices hit bottom

The first half of 2025 began with industrial silicon facing high inventory levels and persistently weak demand. Despite a year-on-year decline in national production, total capacity continued to expand, highlighting structural oversupply. Downstream demand remained broadly sluggish:

- The polysilicon sector, a major consumer, saw its photovoltaic industry weaken. With low production schedules and sustained low operating rates, demand for industrial silicon plummeted accordingly; Organosilicon enterprises were mired in losses, with some new capacity struggling to come online. Although aluminum alloy demand grew, poor profitability exerted downward pressure on raw material prices. Dominated by pessimistic expectations, downstream players widely adopted a just-in-time procurement strategy with minimal stockpiling willingness. On the cost side, despite the southwest region gradually entering its wet season and localized preferential electricity pricing policies in some areas, cost support continued to weaken. Under these multiple pressures, industrial silicon prices fell continuously. Prices for various grades at Tianjin Port dropped from 11,000-12,000 RMB/ton at the beginning of the year to 7,700-10,400 RMB/ton by late June, representing an overall decline of 30%. The main futures contract briefly fell below 7,000 RMB/ton, hitting a historic low.

Phase Two: July – Policy Expectations Drive Oversold Rebound

July witnessed a sharp reversal in market sentiment and price trends. The core driver was the intensive release of strong policy signals at the national level targeting “anti-internal competition” and addressing disorderly low-price competition. From the revision of the Anti-Unfair Competition Law in late June explicitly prohibiting low-price dumping, to the Central Financial and Economic Affairs Commission meeting on July 1st prioritizing the regulation of disorderly low-price competition among enterprises, the policy trajectory was clear and unprecedented in intensity, particularly singling out the photovoltaic industry. The market interpreted this as accelerating the clearance of outdated capacity and curbing below-cost sales. Futures markets reacted first, effectively driving spot prices higher. Spot prices rebounded rapidly from late June lows, with monthly prices rising from 7,900-10,400 RMB/ton to 9,600-10,900 RMB/ton—an increase of approximately 19%. Market trading activity intensified, with some intermediaries actively stockpiling goods, shifting social inventory from factories to midstream segments. However, end-users remained cautious about stockpiling amid high social inventory levels, hindering the sustainability of the rebound.

Phase Three: August–December: Strong Expectations vs. Weak Reality, Prices Consolidate at Bottom

From August through year-end, the industrial silicon market entered a phase of repeated tug-of-war between strong policy expectations and weak fundamental realities. On one hand, the deepening “anti-internal competition” policy saw the polysilicon industry strictly enforce self-discipline requirements mandating “sales prices not below full production costs,” providing some floor support for industrial silicon. On the other hand, the fundamental structure of overcapacity remained unchanged. With the southern region entering its abundant hydropower season in the second half, supply pressure exceeded that of the first half, while demand showed no fundamental improvement. End-user photovoltaic installation demand was front-loaded due to factors like the conclusion of the 14th Five-Year Plan, limiting acceptance of price hikes across the supply chain and hindering cost pass-through. Despite industry inventories declining by over 120,000 tons from January to August, total stockpiles remained elevated. Following downstream production cuts, inventories began accumulating again from September to December. Prices near the cost line reached a stalemate, trapped in a “no room to fall, no momentum to rise” situation, entering a narrow-range oscillation phase to find a bottom. From August to December, industrial silicon prices across all grades declined from 9,600-10,900 RMB/ton to 9,100-10,500 RMB/ton.

2026 Industrial Silicon Market Outlook

(I) Cost Perspective

Electricity costs remain the dominant factor, accounting for 35%-40% of total costs in regions with relatively low electricity prices and over 50% in areas with higher rates. In 2025, electricity prices in major industrial silicon production areas ranged primarily between 0.3-0.68 RMB/kWh. Preferential electricity rates in key production regions like Sichuan and Yunnan gradually decreased, with only hydroelectric discounts during the rainy season potentially remaining in 2026 as other preferential policies are phased out. In some northwestern areas, the share of wind and solar power slightly increased, but overall supply remains unstable, with electricity prices fluctuating between 0.38-0.42 RMB/kWh. Close attention should be paid to the development of the unified power market policy. Electricity prices in major industrial silicon production areas are expected to remain stable with a slight upward trend overall by 2026.

Among other key raw materials, silica sand accounts for 10%-15% of industrial silicon production costs. With abundant silica sand resources and limited price volatility, mine-ex-factory prices have largely remained between 280-400 RMB/ton. As some large factories develop their own mines, ore transaction volumes are gradually decreasing. Some existing mines face challenges in shipments, lacking momentum for price increases. With shifts in industrial silicon production processes, coal-based and high-coal/low-coke processes now dominate the market, accounting for 15%-25% of total production costs. Washed coal is concentrated in Ningxia, Xinjiang, Shaanxi, and Shanxi, with 2025 ex-factory prices ranging around 850-1200 RMB/ton. Electrodes, with consumption rates of only 75-100 kg per ton, account for just 5%-7% of total costs. As large furnace types gain market share, the usage of large-diameter graphite electrodes is increasing. However, most major manufacturers still operate dedicated electrode plants, resulting in minimal changes to their production cost ratios. By 2025, high-graphite carbon electrodes will see slight price declines: 960mm electrodes will drop from 7,800-8,500 RMB/ton to 6,300-6,500 RMB/ton, while 1,272mm electrodes will decrease from 13,500-14,000 RMB/ton to approximately 12,000 RMB/ton. Petroleum coke usage has significantly declined due to production and supply constraints. Some plants use it in small quantities as an additive, while others employ all-coke processes, accounting for a relatively large proportion.

(II) Supply and Demand

In 2025, annual industrial silicon production (including 97# silicon and recycled silicon) is projected to reach approximately 4.69 million tons. Downstream consumption is estimated at around 4.62 million tons, resulting in an annual surplus of about 70,000 tons, representing a surplus rate of 1.49%. Industrial silicon capacity expansion in 2025 remains modest overall. Many completed projects remain idle, while progress on some under-construction projects has slowed. Production will gradually centralize in 2026, dominated by the northern market, while southern market operating rates may decline further from this year's low levels. Recycled silicon output is expected to stabilize, while the 97# silicon market faces limited growth potential and will maintain low operating rates. Total production is projected to reach approximately 4.4-4.5 million tons.

Under the “anti-internal competition” initiative, polysilicon output will further decline, with consumption expected to decrease slightly. The organosilicon market will also operate at relatively low capacity utilization rates due to carbon reduction efforts and the “anti-internal competition” call, with consumption forecast to drop by about 5% compared to 2025. The aluminum alloy market will remain stable, though export volumes may gradually contract by approximately 100,000 tons. Total consumption in 2026 is projected to range between 4.3 and 4.5 million tons, with the industrial silicon market continuing to operate in a state of ongoing negotiation.

(3) Pricing

This year, industrial silicon prices fluctuated between 7,600-12,000 RMB/ton, primarily hovering around 9,000-9,500 RMB/ton, with lows at 7,600-7,800 RMB/ton. As large manufacturers deepen their integration processes, the overall market trade volume is gradually contracting. Industrial silicon prices are expected to fluctuate within reasonable regional ranges, with no specific conditions for significant increases or decreases. However, volatility may still occur due to futures market expectations and seasonal changes. The mainstream price range for industrial silicon in 2026 is projected to fluctuate between 8,000 and RMB 11,000 per ton.

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