Metal Bulletin IFA Lisbon 2018

1. Dipl. Ing. Lou Parous
Executive Director
Viridis.iQ GmbH
Von-Emmich-Str. 4
Konstanz, 78467
Germany
www.viridis-iq.de
Silicon and FerroSilicon Roundtable
Dipl. Ing. Lou Parous – Viridis.iQ GmbH
Kevin Fowkes – Alloyconsult

2. © Viridis.iQ
Consulting capability of AlloyConsult:
AlloyConsult is able to provide a wide range of bespoke market-related
consulting services on the
ferroalloy sector.
Examples of services available:
● Market analysis
● Supply, demand and price forecasting
● Cost curves and company benchmarking
● Company profiles
● Industry and company financial performance
● Asset viability and assistance with due diligence projects
● Telephone consultancy

3. © Viridis.iQ
• Demand growth – aluminium, silicones, solar
• Solar Markets
• Effects of Chinese PV markets
• Reduced Chinese solar subsidies
• Falling prices through 2018
• Oversupply
• New projects eg Iceland/China/Malaysia
• Furnaces switching to FeSi
• Failure of US and Canadian AD cases
• Chinese government policy on emissions etc
Topics of Discussion - Silicon

4. © Viridis.iQ
Chemicals
 ⁓ 1.000 mio tons/yr
 Silicones, Siloxanes
 Lithium batteries, 3D printing,
medical
 Requires fine grain silicon
powder, high quality
 Grade 2202, 3303, other
Photovoltaics / Semi
 ⁓0.700 mio tons/yr
 Solar cells and semiconductors
 Requires fine grain silicon
powder, high quality
 1.2 kgs mgSi / 1 kg polysilicon
 Grade 3303, 441, other
Silicon Metal
Major end use markets
Aluminium
 ⁓1.4 mio tons/yr
 Primary Castings (wheels,
brakes, suspension)
 Secondary Castings (blocks,
cylinders, heads, shafts)
 Requires lump silicon powder,
low to med quality
 Grade 441, 553, others
Major End Market Industries

5. © Viridis.iQ
Global Silicon market
Strong annual growth
Source: Solar Power Europe
Source: Viridis.iQ
mgSitons

6. © Viridis.iQ
1000
1500
2000
2500
3000
3500
4000
Europe USA China domestic
Si metal monthly spot prices (USD/t)

7. © Viridis.iQ

8. © Viridis.iQ
Global PV market
Strong annual growth
Strong long-term market
growth
• China:39 GW in 2018
• USA:10 GW in 2018
• India:11 GW in 2018
• ROW: 52 GW in 2018
However, large
uncertainties exist about
future markets
• Subsidy schemes
• Trade barriers
• Chinese growth
• Other Markets

9. © Viridis.iQ
Global PV market
Dominance of China
Chinese
manufacturing
capacity is covering
almost 80% of ist
own domestic
consumption

10. © Viridis.iQ
Chinese PV industry
What happened on May 31, 2018
2018 Change:
• Affects utility and distributed grid Solar connections
• 10GW cap on qualifying projects
• Halt of utility projects for rest of 2018
• National Feed In Tarrif (FIT) reductions
• Poverty alleviation and roof top solar programs untouched
• Push toward local governments absorbing subsidy costs
Results
Some analysts forecast this substantial change in Chinas regulatory
program will push the PV market into its first real recession in its young
history and result in a reduction of the PV demand to 2016 levels
• GTM forecasts 2018 Chinese market down from 48.2 GW to 28.8 GW
• AECEA lowered 2018 forecast from 40-45GW down to 30-35 GW
• Solar Power Europe lowered its projections to 39 GW
On June 1st, 2018, new regulations were released from the NDRC (China’s National Development and Reform
Commission), MOF (Ministry of Finance), NES (National Energy Administration) that fundamentally changes the
governmental subsidy scheme that was in place to support the Chinese PV industry

11. © Viridis.iQ
Impact on the PV Market
LCOE – Cost of Solar electricity
Source: IRENA, Viridis.iQ
As the LCOE for Solar
and other renewables
enters the shaded area,
the more incentive there
is for governments,
companies, utilities and
individuals to implement
renewables as an
electricity source.
When these costs go
below the shaded area,
fossil fuels will cost more
than any renewables
New Accelerated
Growth Phase of
PV

12. © Viridis.iQ
Impact on the PV Market
Technology - Grams per Wp
Higher efficiency
Higher recycling
rates
Thinner wires
and wafers
Larger ingot size
Lower cell-to-
module
losses
Less polysilicon consumption = less MgSi consumption
Passivated Emitter and Rear Cell
g/Wp
2018: 1 GW = approx 5500 tons mgSi
2021: 1 GW = approx 4800 tons mgSi

13. © Viridis.iQ
China Impact on MgSilicon Markets
What does it matter?
150 kts
207 kts
235 kts
278 kts
352 kts
Source: Viridis.iQ, SPE
Possible
market
correction
..or maybe
not…

14. © Viridis.iQ
Not ALL broken eggs end up in the trash…it
just depends on how they land

15. © Viridis.iQ
FeSi – market commentary & points for discussion
• Prices in all regions have fallen significantly from early 2018 peak
• High prices attracted oversupply – Europe in particular
• High imports to Europe & oversupply continuing despite lower prices
• Demand growth in Europe has softened significantly in H2 2018
• Anti-dumping renewal 2019
• Furnace switches from Si-metal (Europe and US)
• US prices at biggest premium for 3 years
• China
• Environmental restrictions
• Export tax
• Competitiveness/currency

16. © Viridis.iQ
FeSi weekly spot prices (USD/t)
800
1000
1200
1400
1600
1800
2000
2200
Europe US China

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800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
Model Actual
Could underperform
model if oversupply
continues / EU steel
output declines
17
EU FeSi price outlook (EUR/t)
Regression model based on input costs, Chinese indifference prices, stock levels

18. 18© Viridis.iQ
Contact details:
Eng. Lou Parous
Executive Director
p: +49 7531 698 4628
m:+49 160 906 81722
e: lou.parous@viridis-iq.de
Register Office: Freiburg - Commercial Register No. HRB 708759
Managing Director: Louis C. Parous III, Dr. Wolfgang Herbst
Thank You!
Viridis.iQ GmbH
Von-Emmich-Str. 4
Konstanz, 78467
Germany
www.viridis-iq.de