The global Silicon Metal Market is estimated to be valued at USD 7.61 Bn in 2024, growing at a CAGR of 4.7% over the forecast period (2024-2031). The market is anticipated to grow steadily owing to the increasing demand for aluminum alloys from various end-use industries such as automotive and packaging. Furthermore, rising polysilicon production for the photovoltaic industry is also driving the silicon metal consumption.
The silicon metal market is primarily driven by the increasing demand from the aluminum alloy industry. Silicon is a key additive for aluminum casting and smelting as it removes gas and oxidize impurities. This enables the production of high-quality aluminum alloys suitable for automotive components and packaging sheets. Furthermore, the growth of the solar photovoltaic industry is another major driver as polysilicon is one of the key materials used in the production of solar panels. The expanding solar energy sector globally will augment the sales of silicon metal over the coming years.
Growing Demand for Aluminum Alloys is driving the Global Silicon Metal Market
Silicon metal is a key element added to aluminum during the melting process to manufacture aluminum alloys with improved properties. It enhances the strength, hardness, and corrosion resistance of aluminum alloys.
The aluminum alloy industry has been expanding rapidly worldwide owing to aluminum's increasing use in various applications such as automotive, aviation, packaging and construction. Aluminum alloy finds widespread adoption as it provides benefits like lightweight, durability, flexibility in fabrication and recycling ability. According to projections, the global aluminum production is estimated to grow by 4-5% annually over the next decade. This rising production of aluminum is directly increasing the consumption of silicon metal which is integral to the alloying process.
Growing Demand from the Solar Panel Industry is driving the Global Silicon Metal Market
Silicon metal plays a vital role in this industry as it is used to produce polycrystalline silicon, which is further processed to manufacture solar photovoltaic cells.
Solar power has emerged as one of the most important sources of renewable energy. Many countries are taking initiatives to shift from conventional to greener sources of energy to reduce carbon emissions. This has stimulated investments in solar farms and rooftop panels. According to reports, the global solar installed capacity is estimated to grow at 15-20% each year. The rising deployment of solar panels will necessitate higher production, thereby driving the consumption of silicon metal in the coming years.
Volatility in Raw Material Prices is Hampering the Growth of the Global Silicon Metal Market
Silicon metal production involves smelting and reducing high-purity quartz with carbonaceous material in electric arc furnaces. The key raw materials used in this process are metallurgical grade quartz, wood chips, and coal.
Prices of these raw materials tend to fluctuate frequently depending on various economic and geopolitical factors impacting supply and demand worldwide. Any steep rise in input costs puts pressure on the overall bottom lines of silicon metal manufacturers. At times, the raw material price volatility makes operations unviable, thereby negatively impacting the market growth.
Stringent environmental regulations around carbon emissions from coal-based production processes is another restraint. This compels companies to explore alternative methods or raw materials to maintain compliance, leading to higher overall production costs.
Trade Wars and Duties on Silicon Metal Imports are Hampering the Market Growth
Ongoing global trade wars and protectionist policies by certain governments have also emerged as a barrier to market growth. For example, the U.S. government has levied additional duties ranging from 50% to 350% on silicon metal imports from various countries including Brazil, Norway, and Venezuela since 2014-15.
Such hefty anti-dumping and countervailing duties make imported silicon metal costlier in the American market, reducing competitiveness. They also discourage new players from entering the U.S. This trend of increasing trade restrictions on silicon metal trade poses challenges and restricts greater participation across international markets.
Growing Demand for Polysilicon Presents an Opportunity for Silicon Metal Producers
Purified metallurgical-grade silicon is used as a raw material for producing high-purity polysilicon, which is further processed to make solar photovoltaic cells.
Experts project that the annual global demand for polysilicon will increase from 280 kilotons in 2020 to over 400 kilotons by 2024, spurred by the exponential rise in solar installations worldwide. This growing requirement of polysilicon translates to a significant rise in the consumption of silicon metal, offering lucrative opportunities to industry players. Producers who can reliably supply high-quality silicon metal stand to gain massively.
Growing Demand for Silicone Products Opens New Avenues of Growth
Another promising avenue opening up is the rising use of silicones in applications such as sealants, adhesives, encapsulants, coatings, and elastomers. Silicon metal serves as a key precursor material for producing silicones.
The worldwide silicone demand is growing at over 5% annually due to increasing uptake in industries like construction, consumer products, personal care, transportation, and healthcare. This burgeoning requirement of silicones will definitely spur the silicon metal consumption.
Link - https://www.coherentmarketinsights.com/market-insight/silicon-metal-market-5051
Key Developments
- In February 2024, Ferroglobe and Longi announced a long-term silicon supply agreement
- In May 2022, Wacker Chemie AG announced that it is preparing to expand its production capacity for silicon metal at Holla, Norway
- In May 2022, Dow Inc. launched Silastic Ms-5002, a moldable liquid silicon rubber with low molds for faster recycling
- In December 2022, China launched trading of the world's first industrial silicon futures to boost risk management
Key Players
Elkem ASA, RIMA Group, Rusal, Ferroglobe, Sinova Global Inc, Mississippi Silicon, Minasligas, LIASA, Wacker Chemie AG, PCC SE, Zhejiang Kaihua Yuantong Silicon Industry Co. Ltd, Hoshine Silicon Industry Co. Ltd, Anyang Huatuo Metallurgy, Shin-Etsu Chemical Co. Ltd, Zhongyi Metalware (Tianjin) Co., Ltd, Otto Chemie Pvt Ltd, Phoolchand Bhagatsing, Anyang Dingsheng Silicon Industry Co., Ltd, Wasia Group, and Hensfate Metal Co., Ltd.
