SHANGHAI, Jun. 25 (SMM) -- When entering into June, electricity prices at companies with high energy consuming and high pollution were lifted up by various local governments, due to crackdown to save energy and to cut pollution emission. Although market rumors regarding electricity prices are spreading, any specific details of the price adjustment were not revealed. Silicon metal price movement will not become clear until the end of June when electricity price is settled by the new standard. If electricity prices are above RMB 0.5/kWh, production costs for silicon metal producers will be at least above RMB 6,000/mt. In this context, many small-scale companies will halt production due to high cost pressure.
Polysilicon and organic silicon developed stably, and demand from these sectors also grows steadily. Although some small-scale aluminum alloy producers have halted production due to economic downturn, demand from large-scale producers is still stable.
Silicon metal prices were pushed up by electricity price adjustment, RMB appreciation and export tariff adjustment as well as other uncertainty factors. Prices of silicon metal climbed all the way after the Chinese Dragon Boat Festival, and trading volumes increased to certain extent as well. SMM believes that uncertainties from related policies will gradual become clear before the end of June, and silicon metal price performance will lie more in market fundamentals in the future.
It is expected that mainstream traded prices will be around RMB 12,400/mt at Huangpu port for #553 silicon metal, will be around RMB 13,000/mt for #441 silicon metal, will be around RMB 13,400/mt for #3303 silicon metal and will be around RMB 14,000/mt for #2202 silicon metal.
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