Strong demand to support silicon metals prices after the CNY holiday

SHANGHAI, Feb 11 (SMM) —Silicon metals prices diverged in January. Metallurgical-grade silicon prices fell before rising, while chemical-grade silicon prices dropped slightly. Many downstream users from home and overseas restocked in advance in January ahead of the Chinese New Year (CNY) holidays in February. Silicon plants had reduced prices to promote sales as they concerned that inventories of finished products might pile up during the holiday, but in late January orders at large-scale silicon plants in Xinjiang and small and medium-scale plants in South-west China have been scheduled to late February. Sufficient orders prompted plants to raise prices. 

In previous years, trades are usually quiet before the CNY holiday, but this year downstream users and traders were still purchasing raw materials until the week before CNY and two overseas downstream buyers commenced quarterly bidding in advance. Expectations of higher post-holiday silicon metal prices drove some traders and downstream users to restock in advance. Silicon metals #553 and #3303 were even in short supply in the first week of February. 

Domestic silicone monomer plants and aluminium alloy plants without sufficient feedstock are expected to resume procurements after the holiday, while end-user consumption is likely to recover till April. Restricted transport amid the COVID-19 pandemic limited silicon metal inventories in consuming areas and quarterly orders from Japan are likely to be released in late February or early March, which are likely to boost prices of some metallurgical-grade silicon metals after the holiday.

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