Steel Alloys / Silicon and Ferrosilicon: Global Industry Markets and Outlook, 13th edition 2011

The major recent development in the silicon industry is the tripling of demand for solar grade polysilicon between 2008 and 2010, with the expectation that the quantity used in solar photovoltaic (PV) modules will start to rival that in the high volume silicon markets within a few years.

The main markets for silicon metal in 2010 were as an alloying element with aluminium (45%), in silicone and silane chemicals (35%) and in PV’s (12%). The market for ferrosilicon is largely in steel (85%) and cast iron (15%), with very small amounts used in non-ferrous alloys.

Although demand for silicon and ferrosilicon is expected to remain robust in the coming years, producers are likely to face challenging times due to overcapacity and rising production costs.

Silicon metal was produced in fifteen countries in 2010, with Chinese production accounting for about 46% of the world total. Global silicon capacity utilisation is less than 70%, mainly because of significant overcapacity in China. World ferrosilicon production capacity, nominally about 9.3Mtpy, is very fragmented, with some 80 companies in 27 countries outside China (where as many as 1,000 plants are said to exist) reporting capacities ranging from less than 1ktpy to over 500ktpy. Rising production costs due to increasing energy prices will see producers attempt to raise market prices, and/or shut down uneconomic capacity.

Although supplied to very different markets, the prices of silicon and ferrosilicon follow very similar trends. European and US prices for silicon metal rose in the second half of 2010 through to March 2011 reaching US$3,535/t and US$3,616/t respectively, as a supply deficit continued to grow as demand increased. Over the coming years, prices are likely to continue to rise as both demand and production costs increase, which could take silicon prices to US$4,000/t.

Get accurate answers from independent experts

• What is the growth rate for solar polysilicon production in China and elsewhere?

• How will solar use affect the overall market for silicon?

• What is the outlook for for the use of silicon in aluminium alloys and silicone products?

• To what extent have Chinese exports of ferrosilicon declined?

• What is the outlook for ferrosilicon demand in steel?

• What is the outlook for prices of both silicon and ferrosilicon?