Silicon Prices Kept Hitting New Highs amid Raw Material Shortage and Power Curtailment

SHANGHAI, Aug 16 (SMM) - The price trend of silicon was extreme in July. The prices of #553 oxygen-free silicon fell by 300 yuan/mt in early July, while the prices of silicon of other specifications stood stable.

After mid-July, Baoshan, Dehong, and Nujiang in Yunnan frequently implemented power curtailment, and the supply of cleaned coal was tight with lower grade. This, coupled with the sudden shutdown of a large silicon plant in Xinjiang, led to the short supply of silicon spots, and the prices kept rising to reach a record high.

The #421 silicon plants need high-grade cleaned coal as raw materials, and some plants had to change raw material purchase channels for lack of resources. Silicon plants frequently failed to deliver goods on time or in full quantity. The purchase volume by downstream organosilicone companies fell short of expectation. The raw material shortage cannot be alleviated in the short term, and the operating rates will not rise due to the power curtailment. #421 silicon will remain in tight supply in August, and the prices will keep going up. 

A previously suspended silicon plant in Xinjiang gradually resumed production since August 6. The tight supply of low-grade metallurgical silicon was eased, while traders and downstream users held mostly wait-and-see attitude. The holders gradually stabilised the quotations for the #553 oxygen-free silicon, and the prices are unlikely to further increase without new consumption from downstream aluminium alloy sector.

Such a price trend in the wet season was rare. The supply of high-grade silicon is tight, and downstream users are willing to accept the high prices, so silicon plants are highly intended to raise prices. The prices of high-grade silicon is expected to keep rising in August, the prices of low-grade oxygenated silicon will increase steadily, and the prices of oxygen-free silicon is likely to fall back in late August.