Silicon Prices Decline Further and the Transactions were Thin

SHANGHAI, Nov 25 (SMM) - Silicon metal prices extended the declines this week. As of November 25, the prices of standard #553 silicon metal in east China lost 550 yuan/mt or 3% on a weekly basis to 18,700-18,900 yuan/mt, those of above-standard #553 silicon metal dropped 550 yuan/mt or 3% to 19,800-20,100 yuan/mt, those of #3303 silicon metal also declined 600 yuan/mt or 3% to 20,500-20,700 yuan/mt. After more than ten days of poor performance in the silicon metal market, upstream and downstream enterprises turned more bearish. The orders from aluminium alloy and silicone producers, as well as export orders, were insufficient. Silicon metal suppliers rushed to sell at lower prices in an attempt to attract buyers.

The operating rates of aluminium alloy producers barely changed on a weekly basis. While the severe pandemic in Chongqing and Guangzhou disrupted aluminium scrap transportation, aluminium alloy ingot prices were unable to keep up with the gains of aluminium prices due to insufficient orders. Aluminium alloy producers reported shrinking profits or even losses and restocked silicon metal as needed. A small number of aluminium alloy producers purchased less expensive off-grade silicon metal. The operating rates of silicone enterprises declined. DMC prices stood between 16,800-17,500 yuan/mt and may remain low in the shot term. Silicon metal demand from DMC plants was slack. The overall polysilicon capacity in operation maintained an upward trend. No new bids were issued this week, but the long-term demand for silicon metal will remain strong.

Sichuan has entered the dry season since November 25, and the electricity prices in the dry season are expected to rise 0.08-0.1 yuan/kWh to 0.64-0.72 yuan/kWh, which is equivalent to 1,000-1,300 yuan/mt increase in the power costs of silicon metal plants. Some silicon metal plants in Yunnan province’s Nujiang city and Sichuan province’s Ebian county reduced their production due to maintenance. As the cost increase and supply reduction in Sichuan and Yunnan had been priced in earlier, pessimism in the silicon metal market barely eased. In view of the abundant supply in the spot market and an expected increase in supply from producers in Xinjiang, silicon metal prices will probably remain vulnerable to the decline next week.