Silicon Prices Continued to Rise amid the Expectation of Tight Supply

SHANGHAI, Aug 12 (SMM) - As of August 12, the prices of 553# silicon without oxygen stood at 18,000-18,300 yuan/mt in east China, up 1,500 yuan/mt or 9% on the week; 553# silicon with oxygen 18,700-19,000/mt, up 1,150 yuan/mt or 6% on the week; 441# silicon 19,200-19,400 yuan/mt, up 1,100 yuan/mt or 6% on the week.

Cargo holders raised the quotations of silicon several times this week, mainly because the market was worried about the production restrictions and shipment problem amid the pandemic in Xinjiang. Meanwhile, the hydropower supply in Sichuan was still tight, and the production in Leshan area was suspended due to the power rationing. In this scenario, the inquiries in the silicon market was active. In terms of transactions, there were relatively more orders from traders, aluminium alloy enterprises and grinding plants. Traders not only purchased for rigid demand, but also stockpiled on dips at the beginning of the week. At the same time, some aluminium alloy enterprises with low silicon metal inventory were more willing to purchase for fear of high prices. However, most silicone companies were wait-and-see as they mainly digested their inventory. In addition, due to the low silicone prices, silicone companies were less willing to accept the high-priced silicon.

On the demand side, the operating rates of aluminium alloy remained low as a small number of secondary aluminium alloy enterprises reduced the production due to the high temperature, power rationing and insufficient aluminium scrap supply. In terms of silicone, the operating rates slightly declined as some enterprises overhauled amid the weak consumption. On August 12, the DMC prices stood at 18,900-19,200 yuan/mt. In terms of polysilicon, as the operating rates of polysilicon were high, the demand for silicon metal remained strong.

Although the market inquiries were still active, the transactions were modest due to the high prices of silicon. The downstream enterprises were less willing to accept high-priced silicon and the wait-and-see sentiment was stronger. Although some traders were willing to ship amid the sufficient silicon inventory, the downstream consumption was still weak. It is expected that the increase in silicon prices will slow down and the prices will stabilise next week.