Weekly Review and Forecast on Silicon Market

SHANGHAI, Mar. 12 (SMM) --

Weekly Review

Prices to port for silicon metal were relatively stable this week, and supply of spot goods was ample. Although #553 was still offered in the RMB 12,300-12,400/mt range, traders can purchase goods between RMB 11,800-12,000/mt. #441 was offers in the RMB 12,700-12,850/mt range, and was mainly traded in the RMB 12,600-12,800/mt range. Although #3303 was offered at RMB 13,500/mt, transactions were only reached in the RMB 13,000-13,200/mt range. Offers of #2202 were still in the RMB 14,000-14,200/mt range.

Weekly Forecast

Supply

Currently, a serious drought hit southeastern regions in China, and there were still no rain in Yunnan province, Guizhou province, Guangxi province, Sichuan province and Chongqing city at present. Silicon producers relying on hydro power in these regions were forced to halt production due to electricity supply shortage. Relatively more producers resumed production in Huaihua of Hunan province, and operating rates at Huaihua were above 60%. In addition, some producers in Humua planned to run furnace in late March. According to SMM survey, Huaihua Hongyan Silicon Industry Lo,. Ltd will run on a new 12500KVA furnace in late March, and Xupu Fengshun Silicon Plant will also re-run furnace after completion of unit maintenance. However, operating rates at other regions in Hunan like Zhuzhou, Chenzhou and Yonghzou were still low. It was rumored in the market that electricity prices will be adjusted in Hunan province, but this news was confirmed to be untrue after SMM conducted a survey with silicon producers in Hunan province and the specific policies of the electricity price adjustment are expected to release in late March. In addition, there was certain amount of inventories held by traders. With regard to whether operating rates will climb during the high water season in April or not and whether supply of goods will increase or not are still not clear, and cargo holders moved goods relatively active.

Demand

Purchases from downstream aluminum alloy producers and silicon powder producers will be stable, and a large amount of purchasing hasn't occurred in the market due to ample supply of goods in spot market. Export orders increased, but most overseas buyers still made purchase in a small amount for the expectation of lower prices during the high water period.

Summary

SMM believes that current silicon price trend is not clear, but silicon prices will still have room to rise due to high costs and low operating rates. Traders and downstream consumers were relatively cautious and believed silicon prices will decline along with electricity price cut. It is expected that silicon prices will remain stable next week, with mainstream prices of #553 and #2202 in the RMB 11,800-14,200/mt range.

To contact the writer on this report: xiangyu@smm.cn

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