Prices of high and low grade silicon metal diverged amid the gap between supply and demand

SHANGHAI, Jun 17 (SMM) – Prices of silicon metal of different grades diverged in May, as prices of metallurgical-grade low-grade silicon surged before retreating.

Prices of 553# silicon with oxygen increased due to the tight control of orders placed by large factories, up 1,600 yuan/mt to 13,700 yuan/mt, then down to 13,300 yuan/mt in mid-May. Prices of metallurgical-grade high-grade silicon rose by 1,000 yuan/mt in May due to the tight supply amid the power curtailment and production suspension on May 12 in Yunnan. Plants in Sichuan gradually resumed production in the wet season around May 25, while downstream aluminium alloy plants only purchased on rigid demand due to the lower operating rates. Prices of #553 oxygen-free silicon at ports fell to around 12,800 yuan/mt amid increased supply.

Yunnan, Sichuan and Xinjiang are the three main supply regions of chemical-grade 421# silicon. Resumption time at Baoshan and Dehong is unclear due to the power rationing in Yunnan, and supply of 421# silicon is tight. Some organic silicon companies started the monthly bidding in advance to lock in supply. Orders of 421# silicon stood at 15,300 yuan/mt, up 500 yuan/mt on the month.

Nujiang, Yunnan will resume production after the settlement of electricity prices. The power curtailment has been alleviated in other regions in Yunnan amid the wet season. The silicon plants in Dehong are expected to start production before the end of June. At that time, the shortage of high-grade silicon and chemical-grade silicon spots will be alleviated. Prices of 3303# and 421# silicon are expected to stabilise at slightly lower levels, and are likely to remain high amid the firm electricity cost and raw material prices. The pricing initiative of the 5 prefix silicon is still in the hands of large northern manufacturers. Prices of low-grade silicon are expected to stand stable in June amid more maintenance at large-scale plants.