Silicon prices rose for two consecutive months

SHANGHAI, Dec 7 (SMM) – Silicon prices continued to rise last week, with price of non-oxygenated #553 silicon in east China at 13,400 yuan/mt and those of oxygenated #553 silicon at 14,200 yuan/mt. Lower silicon production, reluctance to sell, and restocking by aluminium alloy factories who were bearish on silicon prices previously accounted for higher silicon prices. However, trading volumes declined as traders and some downstream producers with abundant inventories showed little interest in buying at higher prices and turned bearish after aluminium prices trended lower in the second half of the week. The monthly price of chemical-grade #421 silicon for December was finalised at 15,000 yuan/mt, up 500 yuan/mt from the previous month. The price gap between chemical-grade and metallurgical-grade silicon narrowed.

Bearish sentiment is emerging in the market. Silicon output in south-west China decreased sharply, and higher production in Xinjiang and other high-cost regions will be insufficient to compensate for the decline. On the demand side, aluminium alloy producers maintained high operating rates and some producers with low inventories are willing to restock at higher prices. Organic silicon and polysilicon producers maintained stable purchases, and are likely to stockpile next month for the Chinese Spring Festival, which will lift monthly prices for January. SMM sees no decline in silicon prices in December due to lower supply and stable demand. However, the market may face the risks of weakening transactions before the Spring Festival and declining end-user demand after overseas COVID-19 worsens.

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