SHANGHAI, Jul. 6 (SMM) –
According to SMM survey, silicon metal stocks at Huangpu port's Hongkai and Yuehua warehouses are still above 25,000 mt this week, and above 30,000 mt at two major warehouses in Yunnan's Kunming, up appreciably from the previous week. Operating rates at silicon metal producers in Southwest China rose considerably during June but inched down at producers in other regions. But overall silicon metal market supply has risen stably this week. Silicon metal prices fell in early July and forced some producers in Yunnan and Sichuan to reduce and even halt production. Some producers in Fujian have also prepared for production reduction. If silicon meal prices continue to slip, the average operating rate at Chinese silicon metal producers will drop further during July.
The amount of bidding projects from China's aluminum alloy producers has fallen gradually, while silicone market remains slack amid falling operating rates, depressing demand for silicon metal. Downstream consumption overseas has also begun contracting and silicon metal producers and traders both report decreasing export orders. This has added to silicon metal inventories at major Chinese ports.
Despite low silicon metal demand but high stocks, there is limited downside room for China's silicon metal prices which have dropped below most producers' production costs.
Mainstream traded prices at Huangpu port will be around RMB 10,600/mt for #553 silicon metal, RMB 11,300/mt for #441 silicon metal, RMB 12,200/mt for #3303 silicon metal and 13,200/mt for #2202 silicon metal in the following week.