[Minor metal] Silicon Prices Face Downward Pressure

SHANGHAI, Aug. 21 (SMM) -- Domestic prices of silicon metal remained on upward track, and climbed by RMB 100-200/mt during this week. Traded prices were about 9,600/mt for #553 silicon, with highest traded prices at RMB 9,800/mt. Offers were mixed for #2202 silicon, as factories in Fujian offered RMB 11,000/mt, and delivery prices were RMB 10,000/mt or above in Kunming. A factory in Fujian province said current electric power costs increased, and prices for petroleum coke grew as well, so increases in raw materials prices were much larger than increases in silicon prices. In this context, a portion of factories in Fujian have suspended production.

    Traders have finished stock replenishment, and relatively large orders from overseas markets have been signed as well, so purchasing interest was low in the market. In addition, prices for aluminum alloy had a sign of decline negatively affected by falling base metal prices, and domestic demand for aluminum alloy decreased as well, waning the upward momentum for silicon prices.

    SMM believes although silicon market remained in upward trend, transactions were weak, especially when factories raised spot prices since prices for long-term orders were lower. The upward room for silicon prices is expected to be limited, with costs remaining a major factor to support prices, while the waning purchasing interest of traders and downstream consumers will exert downward pressure on silicon metal prices. Special attentions should focus on changes in costs, operating rates at factories, as well overseas demand.

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