SMM Weekly Forecast on China's Silicon Metal Market

SHANGHAI, July. 9 (SMM) --

Supply

Operating rates will improve significantly at silicon metal producers in Sichuan and Yunnan provinces with favorable electricity costs due to rich water resources in late June. With output gradual improving, spot silicon metal inventories will continue to increase in the following two or three months, as major silicon metal producing regions have already all entered high-water period.

Demand

Development of aluminum alloy industry, the largest consumer of silicon metal in alloy industry, slowed down. Affected by this negative impact, purchasing volumes from domestic and overseas purchases reduced significantly, and purchasers mainly made purchases on an as-needed basis. Meanwhile, as silicon metal prices in China's spot market have fluctuated widely and frequently since April, purchasers believe the time is not right for large amount purchases, with strong wait-and-see sentiment prevailing. Silicon metal producers in major producing regions were eager to move goods with inventories increasing in July, but purchasing interest from downstream purchasers was still low. In this context, silicon metal prices have already showed signs to fall. SMM predicts that silicon metal prices will fall more significantly in the following week.

Forecast

SMM believes that that mainstream traded prices at Huangpu port will be around RMB 11,500/mt for #553 silicon metal, will be around RMB 12,300/mt for #441 silicon metal, will be around RMB 13,000/mt for #3303 silicon metal and will be around RMB 13,500/mt for #2202 silicon metal.

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

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