SMM Morning Comments (Aug 14)

SHANGHAI, Aug 14 (SMM) &ndash;&nbsp;Prices of all specifications of silicon metal trended downwards in the first half of July, with declines exceeding 1,000 yuan/mt compared with a year ago. Prices of non-oxidised #553 silicon had slipped to nearly a three-year low as of mid-July.&nbsp;

Declines in prices slowed in the second half of July as market pessimism eased after heavier losses across high-costs capacity triggered greater cutbacks. Pent-up demand from traders and downstream consumers released on improved market sentiment. This rallied spot trades and underpinned prices of silicon.&nbsp;

Silicon prices had kept falling for months until mid-July, which drove traders and downstream producers to keep inventories at lows.&nbsp;

Stockpiling by domestic consumers and exporters for some three weeks since the second half of July lowered in-plant stocks at silicon producers. This prompted producers of low-grade silicon to take the initiative and raise offers.&nbsp;

However, silicon prices are unlikely to sustain their growth in August given the summer break in major export destination countries and limited rebound in downstream operating rates in a continued seasonal lull. A real price rally is expected in September.