Silicon Weekly Comment: Silicon Dowsntream Enterprises and Traders still Purchase as Needed

SHANGHAI, Mar 10 (SMM) - The prices of silicon metal continued to fall slightly this week. As of March 10, the prices of standard #553 silicon in east China were 16,800-17,000 yuan/mt, a week-on-week decrease of 200 yuan/mt, and the prices of above-standard #553 silicon metal were 17,000-17,300 yuan/mt, a drop of 200 yuan/mt. The prices of #421 silicon (used in silicone) stood at 18,900-19,100 yuan/mt, a decrease of 200 yuan/mt, and those of #3303 silicon at 18,300-18,500 yuan/mt, a drop of 200 yuan/mt.

With the exception of a brief rebound after the CNY holidays, the domestic silicon metal market has been on the downswing for nearly five months since late October last year. The prices for above-standard #553 silicon metal were lowered to 17,150 yuan/mt, a drop of 19.7%. The sticky weakness in silicon metal prices, combined with the current ample overall supply, limited silicon metal prices from rebounding. Downstream users have purchased on demand. Some sellers sold with discounts to spur sales. As such, silicon metal prices inched lower.

The operating rates of aluminium alloy enterprises rose from February on the back of improving downstream demand, but dropped by nearly two percentage points compared with the same period last year. Aluminium alloy enterprises worked through silicon metal inventories and purchased mainly as required. The average operating rate of silicone enterprises remained stable at around 83%. Due to the recovery of end-user demand, silicone inventory in February was 51,600 mt, a sharp decrease of 49.66% from January. Fewer DMC plants maintained elevated prices after one DMC plant discounted its cargoes, with the mainstream traded prices falling to 16,800-17,200 yuan/mt. The operating rates of polysilicon plants remained high. The prices of lucrative dense polysilicon have little correlation with those of silicon metal. The price war of silicon powder industry is also fierce amid bearish silicon metal prices.

Silicon metal prices are set to hover at lows in light of slow inventory destocking and the bearish market sentiment.