SHANGHAI, Feb. 5 --
This week, prices at ports for silicon metals declined to certain extend. Prices of #553 silicon metal fell to RMB 11,500/mt as producers moved goods in a large amount at low prices. Prices of #441 and #3303 declined by RMB 100/mt, and prices of #2202 remained stable since demand and supply was sluggish. Buying from trades at ports increased, as current prices levels were attractive for them.
Inventory levels didn't change much at warehouses at ports, and inventories at Hongkai and Yuehua warehouses were both around 4kt.
Next week is the last trading week before the Chinese New Year Holiday, whether prices will fall further shall depend on sentiment from cargo-holders. Most traders were optimistic toward price trend after the Chinese New Year Holiday due to the following reasons. Firstly, stocks replenished by overseas consumers at the end of December will be gradually consumed, and the possibility for them to replenish stock after the Chinese New Year Holiday will be relatively high. Prices are likely to be pushed up by demand. Secondly, output in Yunnan province will reduce due to negative impact of drought, which will further support prices. Downstream companies were cautiously towards future price trend, since supply still exceeds demand in the market, and they will change their purchasing plan flexibly based on specific market conditions.
SMM believes that silicon metal prices will be weak, #553 and #2202 silicon metals will remain in the RMB 11,500-14,200/mt range. It is expected that wait-and-see attitude will be adopted by market participants in a certain period and prices are expected to move on upward trend after the Chinese New Year Holiday.
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