SHANGHAI, Dec 16 (SMM)—Silicon prices maintained strong upward momentum in November. The highest prices of 553# silicon reached 14,300 yuan/mt, while prices of chemical-grade 421# silicon increased by about 500 yuan/mt on the month to 14,700-15,000 yuan/mt.
Most of the silicon plants in south-west China were reluctant to sell or focused on fulfilling previous orders as the area entered a dry season. Rising aluminium alloy prices and robust orders made producers more willing to accept higher silicon prices. Surging sea freights prompted many exporters to deliver goods before the fixed date. In addition, many of them did not stockpile sufficient inventories as they had not expect silicon prices to rise, so they had to purchase spot cargoes from markets. Soaring silicon prices and sea freights and the yuan rising against the US dollar led to a lot of breaches of contracts.
However, silicon prices have begun to steady in December as downstream users have stockpiled sufficient inventories and have seen finished products prices declined, which is likely to drive silicon plants in Sichuan and Yunnan to accelerate output cuts. As it approaches the end of the year and the high season came to an end, orders at downstream users slid. Some traders intended to deplete stocks. A few silicon plants are likely to step up sales due to cash flow issues.