SHANGHAI, Mar. 26 (SMM) --

Review

Prices to ports for silicon metal rose steadily. Actual traded prices of #550 silicon metal were in the RMB 12,300-12,400/mt range, and traded prices of #441 were around RMB 13,000/mt. Prices of #3303 and # 2202 silicon metal finally edged to RMB 13,300-13,500/mt and RMB 14,200-14,400/mt respectively after a long time quiet performance.

With regard to the inventory, stocks were 7,400 mt in Hongkai warehouse, and 5,800 mt in Yuehua warehouse, slightly up from the level last Friday, according to SMM statistics. Exporting market was relatively brisk this week, and arrivals of goods also increased. An exporter shipping out 4 kt of goods in a month during the high demand period told that 90 containers were shipped out this week, which improved significantly compared with the level last week that only 200-300 mt of goods were shipped out.

Forecast

Supply

Operating rates in Guihzou province gradually have improved due to increased supply of electric power, but costs at silicon producers in Guizhou are still high. In this context, sales prices of silicon in Guihzou province will still be firm. Producers in Hunan province enjoy more favorable electricity prices, but they are willing to lower prices as they received relatively high orders. Operating rates in Yunnan province are still low, and goods moved from Yunnan province are mainly from previous inventories. Overall inventories in China began to increase.

Demand

Downstream demand was stable. Orders are bullish at large scale aluminum alloy producers, and supply of aluminum alloy can't not meet market demand. Although profits at small aluminum alloy are squeezed due to weak aluminum prices, sales of aluminum alloy are good, which guarantees purchases of silicon in the market. Exporting market improved, and exporting volumes will increase.

Summary

SMM believes that silicon metal prices will remain bullish in the short term, and improved demand from overseas market will support the increase of silicon pries. It is expected that prices of #553 siliocon metal and # 2202 silicon metal will move in the RMB 12500-14500/mt range.

To contact the writer on this report: xiangyu@smm.cn

 
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