Silicon metal prices have surged by over 300% in less than two months, following the production cut in China, a major producer of the element across the world, Bloomberg reported.

  • Silicon metal prices have ranged between about 8,000 and 17,000 yuan or $1,200 to $2,600 a ton for most of the century, but these have since gone up to as high as 67,300 yuan lately.
  • The surge comes as producers in Yunnan — China’s second-biggest producer — reduce production by 90% below August levels from September to December, amid curbs in the electricity.
  • Yunnan province accounts for over 20% of output, behind Xinjiang, which has not reported significant power issues so far. Sichuan comes as third with about 13%, with the province also recording power curbs.
  • The developments have pushed the price of solar-grade polysilicon to surge by 13% on Wednesday, the highest in 10 years since 2011 and marking a 400% increase since the start of June last year.

Analysts expect prices to remain elevated around the current levels until the following summer or until more production comes online in the second half of the year. SMH is a flat premarket.