SMM Weekly Forecast on China's Silicon Metal Market

SHANGHAI, Aug. 6 (SMM) --

Supply

Operating rates at domestic silicon metal producers may begin to slip with the approach of low-water period and price hike of petroleum coke, clean coal, silica and other raw material. However, southwest producing region is still under high-water period, and supply of spot silcon metal will continue to grow in the short term.

Demand

With the expectation of global economy warm in 2H 2010, national industry output value will also grow mildly. Consumption of domestic silicon metal will improve, and demand recovery in domestic market will obviously outperform overseas market.

Analysis

This week's price rally of silicon metal is largely due to higher production costs, warmer demand, and a portion of speculative transactions. SMM believes that silicon metal prices will still remain current upward momentum, and will continue to move up slowly.

Forecast

It is expected that mainstream traded prices will be around RMB 11,900/mt for #553 silicon metal at Huangpu port, around RMB 12,800/mt for #441 silicon metal, around RMB 13,400/mt for #3303 silicon metal and around RMB 14,000 for #2202 silicon metal in the following week.

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