SHANGHAI, Jun. 3 (SMM) – SMM sources report most silicon producers in Yunnan restarted production in late May, despite electricity prices in high water period in many regions have yet to be decided, which will cause spot supply to increase this week. In Sichuan, electricity price adjustments scheduled in May 25 were postponed for several days, but most silicon metal plants were not affected. Nevertheless, some plants put off production, which will sell goods this week.
Exporters that won the bidding in Q3 from Europe and the US purchased goods actively for delivery, and large downstream enterprises in Japan and South Korea also invited bid for Q3. Cash flow problems at aluminum alloy producers and soft demand affected silicon metal consumption. But consumption from polycrystalline silicon sector was brisk as few of producers cut output, despite that downstream consumption slid.
As silicon metal plants in southwest China restart production in June, spot supply will grow, which will help ease supply tightness. Nevertheless, demand will also strengthen. SMM anticipates as silicon metal producers that restarted production recently will not contribute to spot supply in the near term, and since other silicon metal producers mostly produce to orders, port warehouses have limited goods. With strong demand, silicon metal prices will unlikely fall.