Silicon Metal Prices Fluctuated Rapidly due to the Uncertainty on the Supply Side

SHANGHAI, Sep 2 (SMM) - As of September 2, the prices of 553# silicon without oxygen stood at 18,000-18,300 yuan/mt in east China, down 1,400 yuan/mt or 7% on the week; 553# silicon with oxygen 19,300-19,500/mt, down 850 yuan/mt or 4% on the week; 441# silicon 19,500-19,800 yuan/mt, down 1,250 yuan/mt or 6% on the week; 421# silicon 20,500-20,800 yuan/mt, down 1,200 yuan/mt or 5% on the week;  3303# silicon 20,200-20,300 yuan/mt, down 1,300 yuan/mt or 6% on the week. In terms of supply, as the power rationing in Sichuan ended, some silicon factories in Leshan, Aba and other regions resumed the production while some delayed the resumption for maintenance. At the beginning of this week, the silicon metal prices fell obviously and the downstream enterprises were wait-and-see, hence the market transactions were poor. In the second half of the week, with the release of orders from traders, grinding plants and aluminium alloy companies, the market transactions improved rapidly. Meanwhile, a silicon factory in Xinjiang were still affected by the pandemic. In this scenario, there were few low-priced goods in the market. The quotations of cargo holders stabilised and showed an upward trend.

On the demand side, the operating rates of aluminium alloy increased slightly due to the ease of power rationing and other factors. Despite the approaching traditional peak season, many aluminium alloy enterprises reported that orders did not increase significantly. Therefore, the operating rates are unlikely to increase significantly in the short term. Most enterprises purchased as needed, and only a small number of enterprises purchased in large amount. The traditional peak season also failed to boost the demand for silicone. The DMC prices dropped to 18,800 yuan/mt and most silicon monomer enterprises suffered losses based on the current raw material costs. Therefore, enterprises were less willing to purchase high-priced 421# silicon. The operating rates of the polysilicon increased slightly and the inquiries of polysilicon companies increased. Meanwhile, grinding plants also tended to buy goods. Therefore, the actual transactions were active.

According to the price trend in recent months, prices of silicon metal fluctuated more widely affected by the market sentiment of both upstream and downstream players. In terms of supply and demand, due to the uncertainties such as the pandemic in Xinjiang and the power supply in Yunnan, the market sentiment improved and silicon factories tended to raise the prices. Silicon metal prices may increase slightly this week amid the release of downstream orders.