Silicon Prices Rose Steadily due to the Release of Downstream Orders

SHANGHAI, Sep 23 (SMM) - The silicon metal market improved this week, and the prices went up. As of September 23, the prices of standard #553 silicon metal in east China gained 450 yuan/mt or 2% on a weekly basis to 19,400-19,600 yuan/mt, while those of above-standard #553 silicon metal rose 300 yuan/mt to 20,500-20,700 yuan/mt. The prices of #441 and #3303 silicon metal both increased 350 yuan/mt to 20,800-21,000 yuan/mt and 21,400- 21,500 yuan/mt respectively. Given the relatively abundant rainfalls in south-west China recently, most downstream producers and traders have become less worried about the impact of power rationing in Yunnan. Downstream users are now beginning to stock up for the upcoming National Day holiday amid the end of the month. Some traders also placed orders out of fears of price hike after the holiday and difficulty in securing supply. Most metallurgical low-grade silicon metal factories focused on the delivery of orders on hand. With the increase in inquiries, they either held back their cargoes or raised their quotations. Silicon prices rose steadily due to the release of downstream orders.

The average operating rate of secondary aluminium alloy plants added nearly 2 percentage points on a weekly basis this week, and is expected to maintain a slight increase. With the National Day holiday drawing near, most alloy plants plan to stockpile silicon metal that will be sufficient for a month of production, and some have already completed their stocking. The operating rates of silicone enterprises were basically stable. As of September 22, the DMC prices dropped to around 18,000 yuan/mt, a new year-to-date low. Several DMC plants began to issue bids as the month is about to end, with a small amount of #421 silicon metal being sold at around 21,400 yuan/mt (delivery to factory). In the face of high raw material prices and low finished product prices, DMC plants were under enormous cost pressure. With the ramp-up of new capacity, polysilicon producers stepped up their purchases of silicon metal.

Silicon metal plants are bullish and will continue to hold their offers firm next week. A few low-grade silicon metal plants have few spot cargoes available for sale. Downstream producers have not completed their pre-holiday stocking. But a few silicone producers are in losses, making them resistant to higher raw material prices. Therefore, SMM expects silicon metal prices will increase next week, but the increase is limited.