Home / Insights / Global Silicon Market Set to Expand

insights-espresso-icon blog

Global Silicon Market Set to Expand

Espresso-live Speakers
by Beroe Inc
21 February 2023


The global silicon market is expected to increase at a CAGR of about 3.5-3.75% in 2022-23, with global production being dominated by countries in the Asia-Pacific – China being the key silicon metal producer. 

The Covid-19 pandemic was a significant challenge and directly affected the manufacturer’s supply chain globally, thereby shutting down production facilities to minimize the risk of infection.

That said, the major consumers of silicon metal are expected to be aluminum alloy producers and manufacturers of silicone during 2023. Rising metal prices, owing to strong downstream demand for the metal, are further anticipated to boost the growth of the silicon metals market in the long run. In addition, there are also great expectations around improvement in the supply of semiconductors, which could further increase automobile production and propel the demand for silicon by aluminum alloy suppliers. Since there’s also been an influx of smartphone usage alongside devices like laptops and tablets, there’s huge potential for the silicon metal market moving forward.

Interestingly, many European silicon producers have either stopped or dropped their production capacity to cut back on the higher energy prices. It could lead to a supply deficit in the market if the capacities are not back to initial levels.

In China, however, the silicon metal production output totaled about 2.49 million tons from January 2022 - October 22 period. An increase of 18.1 percent was also reported around this time, a significant improvement compared to the first ten months of 2021. In October, the monthly silicon metal production increased by 16.4 percent and totaled 291,500t.

The U.S. silicon market is expected to witness an optimistic outlook amid anticipated supply-side issues, alongside some healthy demand from the “downstream” industries, particularly from the aluminum alloy sector. Spot inquiries are thus likely to increase in line with firm downstream demand for the metal.

In the U.S., elevated energy cost, coupled with rising feedstock prices, is expected to put upward pressure on the price of the Silicon metal. 

Comparatively, in the European market, silicon metal prices are expected to increase in the medium term due to some strong revival in buying interest from both aluminum alloy producers and trading companies. The silicon metal market in this region is expected to grow at the fastest CAGR between 2021 and 2030. Moreover, the expansion of the construction sector in countries like the UK, Germany, Spain, France and Russia is likely to increase the product demand during the projected period. The primary reasons behind this are increased funding from the European Union and supportive policies like tax breaks and subsidies being provided to businesses. 

It is also anticipated that silicon market growth during this period will be fueled by the rising use of silicone in the healthcare sector for aesthetic implants and the renewable energy sector for solar and wind turbine applications. 

Smelters, too, are likely to quote a higher offer price to achieve their profit margins. Firm demand for the metal will thus continue to bolster prices in the domestic spot market. Moreover, the production cuts in the Chinese market could also lead to limited supply coming into the picture globally in the silicon market. This scenario could lead to an increase in prices.

China is leading the way, with their smelters also likely to quote higher offer prices that can help them achieve a better profit margin. With nearly 70% of silicon metal being produced in the region, there’s firm demand for the metal, which will continue to strengthen its price in the domestic marketplace. Silicones (adhesive, sealants, lubricants and other materials) and aluminum alloys are the most significant applications of the metal, with usage across industries like automotive, building and construction, among other end-user industries. 

Leading electric car manufacturers in China include BYD Co., Nio Inc and Tesla, among others. The Chinese government plans to have a minimum of 5,000 fuel-cell electric vehicles by 2025 and up to 1 million units by 2030. 

The country is among the world’s largest producers of stainless steel, with 1,3336.67 million tons of steel produced in 2021, a 0.6% increase compared to 2020. China’s stainless steel crude steel output in 2021 was estimated to be 30.63 million tons, with an increase of 493,000 tons or 1.64% compared to 2020. 

Solar cell manufacturing in China has increased exponentially in the past two years, with the industrial production of solar cells going up from 157,286-thousand-kilowatt hours to 234,054 thousand-kilowatts in 2021. 

Recommended Reads:

Stainless Steel Suppliers

Linkedin Twitter Facebook
Leave a comment

Please enter a valid name

Post your comment

Please select captcha


Get more stories like this

Subscirbe for more news,updates and insights from Beroe

Get Ahead with AI-Enabled Market Insights Schedule a Demo Now

Schedule a Demo Now