Silicon metal is used to make aluminium alloys for the auto sector and by the chemical industry to produce chemicals known as silicones. The solar industry is also a key sector for silicon metal where it is used in solar panels, posted double-digit growth to become a key application. China is the largest source of silicon metal by far and, unlike chromium and manganese alloys, the country is a major exporter to global markets.

Ferroglobe’s silicon metal plant in South Africa has had a stop-start history over the 2010s, largely underpinned by rising electricity tariffs from local energy utility, Eskom. Despite special pricing agreements, the plant closed again in 2019 and has remained idle since. Since 2007, Eskom increased electricity tariffs by 2021, equivalent to a 200% (three-fold) increase in real-2021 terms.

A major shift supporting the restart of higher cost furnaces is related to global policies. For the USA, anti-dumping import duties in place since April 2021 on four key producing countries have supported domestic plants to operate competitively. Elsewhere, China’s environmental enforcement to meet energy consumption restrictions as part of the country’s 14th five-year-plan has decreased output and tightened the market. With exports from China declining, opportunities for silicon metal plants to capture market share outside of China (like Ferroglobe’s South Africa plant) are resurfacing.

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