Silicon Metal Prices Dropped Last Week amid Slight Bearishness

SHANGHAI, Jun 7 (SMM) - Silicon metal prices dropped as a whole last week. Specifically, the prices of 553# silicon without oxygen in east China were 15,100-15,400 yuan/mt, a decrease of 900 yuan/mt or 6% from last Friday. Prices of 553# silicon with oxygen stood at 16,300-16,500 yuan/mt, down 800 yuan/mt or 5% on a weekly basis. 3303# silicon, on the other hand, was offered at 18,100-18,400 yuan/mt, down 1,250 yuan/mt or 6% week-on-week. Metallurgical grade silicon metal maintained a downward trend due to sufficient supply. A small number of traders restored their purchase willingness with consideration of the cost, hence the market transactions picked up. Chemical grade silicon metal shadowed the moves of metallurgical grade silicon metal, coupled with the influences of rising output in Sichuan and Yunnan in the wet season as well as falling prices of silicone, which prompted silicone manufacturers to force down silicon metal prices. In this case, the signing of monthly contract of 421# silicon has been postponed due to market stalemate.

On the demand side, the operating rates of aluminium alloy remained low in light of poor orders from die-casting producers as well as financial pressure, and purchased on rigid demand in small amount amid falling silicon metal prices. Most aluminium alloy factories maintained the inventory of one week or even less. The operating rates of silicone manufacturers were relatively stable, and they were quite wait-and-see regarding purchases of silicon metal on the backdrop of weak supply and demand. Polysilicon companies maintained full production, and the demand for silicon metal was quite strong, but they were also affected by the falling silicon metal prices and stood on the sidelines.

On the supply side, the operating rates of silicon metal factories varied greatly. Those in Xinjiang maintained relatively stable operating rates, while those in Sichuan and Yunnan saw rising production schedules. Metal factories in non-major producing areas, however, suffered losses and therefore cut or suspended their production. As silicon prices continue to weaken and metallurgical-grade low-grade silicon metal factories are willing to firm the prices, a small number of silicon factories have suspended taking orders and stand wait-and-see. Although there is a small amount of stockpiling activities in the market, the market sentiment is still weak under the current supply and demand pattern. It is expected that silicon metal prices will slow down its declines this week.