SHANGHAI, Aug. 19 (SMM) --
High temperature and low rainfall in southwest China made hydropower supply inadequate. In addition, residential power consumption increased due to high temperature. In this context, tight power supply remains in some regions in southwest China, so supply of silicon metal from these regions was tight. Generally speaking, silicon metal supply was largely stable throughout China.
Affected by high temperature, operating rates at aluminum alloy producers were slightly down. Demand from downstream organic and polysilicon producers has showed signs to increase. SMM expects that demand for silicon metal will slightly increase in the future.
Current power supply has been tight in China, fueling price hike of silicon metal. If supply of silicon metal remains stable and if demand for silicon metal improves in August, silicon metal prices will have room to advance slightly. But tight cash flow in late August caused by electricity charges will press some silicon metal producers to slightly cut prices.
SMM expects that mainstream traded prices at Huangpu port will be around RMB 13,500/mt for #553 silicon metal, RMB 14,000/mt for #441 silicon metal, RMB 15,000/mt for #3303 silicon metal and 16,100/mt for #2202 silicon metal in the following week.