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Lacklustre demand keeps silicon prices rangebound in Aug
iconSep 12, 2018 16:12
Consumption is expected to pick up in Sep as the high season sets in and summer breaks end

SHANGHAI, Sep 12 (SMM) – Silicon prices traded in a narrow range during August and changed little from prices at the end of July, as three major downstream sectors currently experience the low season, and as aluminium alloy and organosilicon producers operated at low rates. 

Demand increased less than supply, and this grew silicon social inventories. Weak prices are unlikely to reverse if demand remains sluggish, SMM believes. This also applies to lower-grade silicon products, which saw limited inventories at plants in August. However, higher prices of raw materials such as silica, electrode, and petroleum coke provided some support to silicon prices. Silicon plants in Yunnan and Sichuan provinces sought financial support from third-party enterprises, through warehouse receipt financing for example, to ease their cash flow issues. 

In September, consumption is expected to improve from August as the summer holiday across aluminium alloy plants ends and the high season sets in. However, a quick rally in prices will be unlikely with current, adequate supplies.

For some specifications with relatively limited supply, like #551 and #553, greater upward momentum is expected, especially as traders and downstream customers restock ahead of the Mid-Autumn Festival on September 24 and the week-long National Day holiday from October 1. 

Market commentary

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