SMM Weekly Forecast on China's Silicon Metal Market

SHANGHAI, Aug. 13 (SMM) --

Supply

Supply of spot silicon metal will grow steadily during the peak production time during the high-water period. However, domestic silicon metal producers' unwillingness to move goods increased from expectation of higher raw material costs, government's move to eliminate outdated capacities as well other artificial speculative behaviors, leading to a new round of silicon metal price rally.

Demand

Purchases for silicon metal from downstream industries brisk recently, and demand has shown signs to improve. However, demand from overseas market is sluggish due to impact from summer holiday beginning mid-July to mid-August. Enquiries from overseas purchasers gradually increased, but time is needed for them to accept price rally when silicon metal prices advanced during their summer holiday.

Analysis

Silicon metal producers push up prices by tightening goods supply, but the actual inventory of silicon metal at China's spot market is extremely ample. In this context, it still needs time to for downstream purchases to accept price rally pushed by artificial speculation. SMM believes that growth pace of silicon metal price will slow down under the context that demand for silicon meal hasn't recovered significantly at domestic market or at overseas market. 

Forecast

It is expected that mainstream traded prices will be around RMB 12,200/mt for #553 silicon metal at Huangpu port, around RMB 13,000/mt for #441 silicon metal, around RMB 13,800/mt for #3303 silicon metal and around RMB 14,300 for #2202 silicon metal in the following week.

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