SHANGHAI, Mar 8 (SMM) – Prices of low-grade silicon metal that underwent oxygen-refining inched up in late February as downstream purchases improved and as supplies were limited.
The market has not recovered fully, in the first two weeks after Chinese New Year. Uncertain outlook on prices prompted most buyers to watch from the sidelines while many small and medium-sized aluminium alloy producers did not resume until after the middle of the first lunar month as poor orders drove them to close for a longer period this year, with an extension of up to 10 days.
With downstream recovery and quarterly bids from some large Japanese aluminium firms, trading volumes across the silicon market recovered to normal levels in late February. Plants saw their inventories of finished goods decline as logistics recovered, and stocks at ports substantially shrank as traders delivered their long-term contracts.
Amid overall weakness in downstream consumption, the increases in silicon prices occurred in materials such as 553# and 521# that have undergone oxygen-refining due to limited spot supplies.
Supplies of silicon are expected to expand in March as most traders would be keen to lower inventories and as downstream consumers would remain cautious about procurement before the rainy season begins across Sichuan and Yunnan in June.
To purchase raw materials, many silicon producers in the south would clear stocks of finished goods to recover cash flows before they resume production.
Sellers are set to lower offers to discharge their cargoes during late March to April, which would weigh on silicon prices.
