SHANGHAI, May 16 (SMM) - After the May Day holiday, the domestic silicon metal prices declined obviously. 553# silicon without oxygen prices stood at 18,000-18,200 yuan/mt in east China, down 550 yuan/mt on the week. 553# silicon with oxygen prices were 19,200-19,500/mt, down 300 yuan/mt on the week. 421# silicon (for silicone) prices were around 22,000 yuan/mt in east China, down 200 yuan/mt on the week. After the May Day holiday, the domestic silicon metal market was sluggish and the market transactions were poor, so the metallurgical-grade silicon metal prices declined. But the chemical-grade silicon metal prices fluctuated only slightly when the product contract is mostly executed on a monthly basis.
In the short term, the contradiction between the supply and demand of silicon metal became obvious amid the delayed downstream procurement as mostly buyers would rather purchase when the prices move all the way up. In addition, the market sentiment was relatively negative because the cost is expected to decline amid the persistent pandemic and the coming wet season. In this case, cargo holders were eager to ship the goods, hence some of them lowered the prices to digest the in-plant inventory with a bearish outlook. Most traders only purchased according to orders on hand, resulting in relatively chaotic market transaction prices. On the export side, the quotations fell due to the continuous depreciation of the RMB among other reasons. At the same time, export traders held different ideas on the exchange rate, which also made the FOB quotations more confusing.
Recently, as the pandemic situation has gradually improved, the terminal automobile industry has recovered to some extent. However, although the operating rates of downstream aluminium alloy enterprises have increased month-on-month, the growth is relatively slow, so the pressure on the supply side still exists. It is expected that the silicon metal prices will decline this week.