SHANGHAI, Jun. 1 (SMM) –
At present, there are still a lot of silicon metal producers maintaining production at low capacities, mostly supplying low-quality #553 and #441 silicon metal. In late May, electricity prices were lower for some silicon metal producers in Sichuan and Yunnan, so some of them will stay in operation in early June, which will increase market supply of silicon metal.
Recent silicon metal demand was still mainly from the aluminum alloy industry, the overall situation of which, however, is sluggish, owing to overcapacities in domestic markets. Large aluminum alloy producers have stable silicon metal demand this week, while small producers choose to reduce output sharply. Silicon metal demand from the silicone industry has weakened some this week. The polysilicon industry has accelerated the integration pace, leading to low operating rates as well as slack demand for silicon metal.
According to SMM sources, as some silicon metal producers in Yunnan and Sichuan will resume production in the following two weeks, silicon metal supply will increase and cause prices to fall significantly. Producers with heavy cash flow problems in Fujian, Hunan, and Guizhou will be forced to suspend production earlier. Low-quality silicon metal prices have fallen to near production costs and thus will have limited downside space. Prices for #553 and #441 silicon metal will also inch down in the coming week, while #3303 and # 2202 will be seen to slide sharply.