China's Silicon Prices Set for Rise as Dry Season Approaches

SHANGHAI, Sept. 16 -- China's silicon prices are expected to rise in the next few months as supply tightens with the coming dry weather, ending weeks of unchanged prices, according to market participants.

    Silicon with a minimum metal content of 98.5% is mostly selling at RMB 9,500-9,600/mt (USD 1,391-1,406/mt) in China.

    "It's October soon, so a lot of the smelters that depend on hydropower will shut down when the dry season comes. Falling supplies will support prices," said a trader in Beijing.

    "Electricity tariffs will also go up during the dry season. In Yunnan province, power prices will tend to go up by RMB 0.08kWh from the existing RMB 2.1-2.5/kWh," said a Beijing-based market analyst.

    "Because of this dry season factor, there will be momentum for prices to move higher, although it is still hard to say whether it will be October, November or later," she added.

    In the short term, silicon prices are expected to be unchanged.

    "The market for standard silicon metal is stable but since September, there are fewer orders from downstream aluminum alloy plants. The downstream may be reducing output and will be buying less silicon," said a trader in Shanghai.

    "Meanwhile, the higher-purity silicon metal market is more active as demand from the chemical industry has improved. Compared to standard silicon, production of these grades is much lower," he added.

    (Source: Metal Bulletin)