Silicon Prices Remain Stable with Thin Transactions Under Game Between Upstream and Downstream

SHANGHAI, Feb 28 (SMM) - Silicon metal prices remained stable last week. As of February 24, the prices of standard #553 silicon metal in east China stabilised at 17,000-17,200 yuan/mt, and those of above-standard #553 stood at 17,400-17,600 yuan/mt, flat from the previous week. #421 silicon metal (for use in silicone) traded between 19,100-19,300 yuan/mt, and #3303 silicon metal traded between 18,700-18,900 yuan/mt. The inquiries and transactions were both thin. Most downstream customers focused on digesting their inventory and purchased on rigid demand. Traders held a bearish outlook and were reluctant to restock. But both large-sized in Xinjian and other small-sized enterprises maintained stable quotations. Only few cargo holders lowered the prices to promote sales amid the financial pressure. Overall, the prices of silicon metal remained stable.

The operating rates of polysilicon remained high. Even with the half-a-month-long maintenance plan in March, the polysilicon output is expected to further increase due to the ramp-up of new capacity. The operating rates of silicone enterprises were around 83.5% on average, a slight increase of 0.4 percentage point from a week ago. The release of downstream demand encouraged DMC producers to raise their prices. As such, the mainstream DMC prices rose 500 yuan/mt to 17,400-18,200 yuan/mt. The aluminium alloy enterprises produced stably, but their demand for raw materials recovered slowly due to the sluggish consumption of terminal automobiles.

On the cost side, the prices of charcoal, clean coal, and petroleum coke dropped slightly after the Chinese New Year (CNY), which relieved the cost pressure of silicon metal enterprises. But the prices of silicon metal were still support by the costs, while silicon metal prices were below the level before the CNY even with a short-term price rebound recently. The transactions are expected to be average as there is no significant improvement in downstream demand. The prices of silicon metal are likely to remain stable under the game between upstream and downstream.