SHANGHAI, Dec. 24 (SMM) --
According to latest result of SMM survey, operating rates in December at silicon metal producers in Yunnan were only 49.67%. Dehong Electricity Authority will announce results of electricity quotas bids on afternoon December 24th. After electricity supply quotas are allocated, operating rates at local silicon metal producers may be even lower. In addition, producers in Sichuan, Guizhou and Wunan where producers mainly use hydropower may be forced to halt production due to absence of water resources in low-water period.
The US and Europe entered into Christmas holiday from December 24th, while Japan, South Korea and other countries will also embrace New Year holiday. Given that silicon metal consumers have already replenished certain stocks during pre-holiday period, China’s silicon metal export market will be quiet from late December 2010 to early January 2011. Demand from domestic aluminum alloy sector was still sluggish, and domestic silicon metal consumption doesn’t show any sign to recover.
Supply of domestic silicon metal will reduce due to slipping operating rate in December, while demand for silicon metal will be weak during holiday period. SMM believes that silicon metal prices will remain temporarily stable in the short term amid weak demand and thin transaction.
SMM believes that mainstream traded prices will be around RMB 13,600/mt for #553 silicon metal, around RMB 14,700/mt for #441 silicon metal, around RMB 15,400/mt for #3303 silicon metal and around RMB 16,200/mt for #2202 silicon metal.
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