SHANGHAI, Feb 13 (SMM) – Domestic downstream purchases of silicon mostly occurred in the first two weeks of January, as some consumers conducted routine procurement in advance and some stockpiled cheap cargoes. Most downstream plants restocked silicon products to ensure production in February, while several plants stockpiled for production in March. 

In the second half of January, the suspension of logistics services lowered spot transactions of silicon. Limited purchasing volumes failed to support prices even as there were new orders. 

Cash flow issues across sellers ahead of the Chinese New Year holiday also accounted for weak prices in silicon. SMM leaned that some silicon mills were eager to cash in to pay wages. Cheap products dominated the market, with some specifications extending their price declines from December. 

Majority of the small and medium-sized aluminium alloy producers took longer breaks for the 2019 CNY than the previous years, with an extension up to 15 days. Large plants of aluminium alloy also lowered operating rates during CNY to control inventories of finished products. 

Downstream plants of chemical-grade silicon operated at lower rates during CNY. Nearly half of the organosilicon producers suspended for maintenance around CNY, while demand from polysilicon stood relatively stable.

In the week or two after CNY, continued cautious sentiment across buyers is likely to keep spot trades thin. After that, as more downstream plants return to work, on-demand purchases and eased cash flows will improve transactions. This, coupled with production cuts and lower social inventories of silicon, are likely to nudge up prices of some low-grade specifications.