Silicon Prices Rose due to the Tight Supply and Downstream Enterprises Purchased as Needed

SHANGHAI, Aug 19 (SMM) - As of Friday, the prices of 553# silicon without oxygen stood at 21,500-21,700 yuan/mt in east China, up 3,450 yuan/mt or 19% on the week; 553# silicon with oxygen 22,000-22,300/mt, up 3,300 yuan/mt or 18% on the week; 441# silicon 22,500-22,600 yuan/mt, up 3,250 yuan/mt or 1% on the week; 421# silicon 22,900-23,100 yuan/mt, up 3,450 yuan/mt or 18% on the week. Due to the power rationing in Sichuan and the pandemic in Xinjiang, the supply was affected and silicon factories were reluctant to sell and raised the prices several times a day. The actual traded prices also increased significantly amid the rigid demand. Due to the high silicon metal prices, the cargo holders were more willing to ship. In this scenario, the market quotations were chaotic and the downstream enterprises were less willing to purchase high-priced goods. The market transactions turned weaker.

On the demand side, the operating rates of aluminium alloy in Chongqing, Jiangsu, Zhejiang and other places fell due to the tight power supply among other reasons. Therefore, most enterprises purchased as needed. In terms of silicone, due to the maintenance, pandemic and other reasons, the operating rates of silicone decreased slightly. As of August 19, the prices of DMC rose to 20,800-21,000 yuan/mt, supported by the high 421# silicon prices. The polysilicon enterprises had strong demand for silicon metal, but those in Sichuan were affected by power rationing and thus reduced the production.

On the supply side, as the power shortage in Sichuan has not been effectively alleviated, local silicon enterprises are unlikely to resume the production on August 21. Meanwhile, the silicon enterprises in Xinjiang are unlikely to resume quickly due to the pandemic. Therefore, the output in Sichuan and Xinjiang will not increase next week.

Although there are not many orders in the middle of the month, cargo holders are more willing to ship and the quotations diverge amid high silicon prices. It is expected that without other favourable news, the silicon prices are unlikely to increase sharply and will run in a narrow range in the short term.