Silicon prices to rely on demand recovery

SHANGHAI, Mar 26 (SMM) – Demand would be the key thing to watch for silicon prices in the short term as prices have been dropping even before the dry season ends.

Aluminium alloy plants, buyer of metallurgical-grade silicon, were operating at a low rate in a bid to destock as few new sales orders were received post-Chinese New Year when previous orders were also delayed.

Even though some aluminium alloy plants gradually resumed production after the two political sessions, little effect has been seen on boosting silicon prices as the demand was relatively small.

For chemical-grade silicon, prices were dragged down by its metallurgical-grade peer even though its buyers saw higher operating rates.

In addition, inventories for chemical-grade silicon are piling up at some plants as export demand was lacklustre and traders were unwilling to take up cargoes. It is likely that producers would lower their prices in the near term in order to maintain cash flows.

Some overseas buyers indicated they would only procure from mid-April as they have sufficient inventory. They were also reluctant to build on their stock with expectation of lower silicon prices when wet season arrives.

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