SMM Weekly Comment: Metallurgical-grade Silicon Prices stabilise

SHANGHAI, Jun 2 (SMM) - The prices of metallurgical-grade silicon metal fell at a slower pace during the week, while the prices of chemical-grade silicon metal began to drop.

Silicon metal prices by series as of June 2

Silicon metal prices have fallen below the production costs of most producers in north China. Producers in south China resumed production slowly due to the sluggish market and high electricity prices. Large producers in north China were reluctant to sell at the current low prices, allowing the prices of metallurgical-grade silicon metal to fall at a slower pace, and the prices of low-grade silicon metal showed signs of stabilising. DMC plants bargained down the purchase prices of chemical-grade 421# silicon metal when they began to sign a new round of orders. 

The operating rates of polysilicon enterprises were basically stable. New polysilicon capacity will be put into operation in July. Polysilicon prices fell rapidly due to high inventory, looming new capacity and weakening demand. Based on rough calculations, Ppolysilicon costs are 50-70 yuan/kg. As of June 1, the prices of SMM dense polysilicon had dropped to 110-123 yuan/kg. Recently, polysilicon enterprises have begun to make inquiries, and a small amount of off-grade silicon metal powder was sold around 14,300-14,500 yuan/mt.

The operating rates of aluminum alloy enterprises were basically stable, unaffected by the recent big fluctuations in aluminum prices. Both primary and secondary aluminum alloy plants may lower operating rates to tackle poor demand. Transactions improved slightly as silicon metal prices showed signs of stabilising.

The operating rates of silicone enterprises rose slightly as some producers resumed production. The slump in #421 silicon metal prices allowed the losses of DMC plants to shrink and some even reported profits. However, DMC plants remained cautious about raw material purchases due to pessimistic demand-user demand.