Silicon Metal Prices Extend Declines on Sluggish Downstream Consumption

SHANGHAI, Apr. 24 (SMM) – High-quality #3303 and #2202 silicon metal fell more rapidly recently owing to sluggish downstream consumption, while downside room in low-quality #553 and #441 silicon metal was relatively slight.

Traded prices for silicon metal have fallen below production costs at present, so silicon metal producers with more production lines face greater losses. As April ends, an increasing number of silicon metal producers have opted to suspend production owing to production cost pressures. Declines in Monday’s silicon metal prices were still prominent.

According to SMM sources, silicon producers are now in the most difficult time, as silicon metal prices hit fresh lows several times, down below production costs, and since their cash flows remain extremely tight. 

Aluminum alloy and polysilicon producers, two main silicon metal consumers, have seen falling aluminum alloy and polysilicon prices since late 2011 as well as slack demand. This is especially true of polysilicon, the prices of which have been declining significantly since last May, down to as low as RMB 170,000-180,000/mt from RMB 700,000/mt, adding to production cost pressures. Hence, more and more aluminum alloy and polysilicon producers begin to halt production, leading to a considerable drop in high-quality silicon metal demand.