Silicon Metal Prices Surged before Dropping amid Weak Demand

SHANGHAI, Apr 18 (SMM) - In March, silicon metal prices in China surged before dropping. As of April 8, the oxygen-free #553 silicon in Huangpu port was 19,000-19,100 yuan/mt, with a month-on-month decrease of 2,750 yuan/mt, or 13%, and prices of #553 silicon with oxygen were 20,500-20,600 yuan/mt, a month-on-month decrease of 1,800 yuan/mt, or 8%. #3303 silicon prices stood at 22,300-22,500 yuan/mt, a decrease of 1,900 yuan/mt, or 8%. At the beginning of March, the previous upward trend of silicon prices was kept due to the centralised downstream procurement and the reluctance to sell of silicon factories. In mid-March, silicon traders lost their confidence and were eager to ship due to the sharp drop in aluminium prices. Besides, the demand was weakened by the pandemic, while the supply was sufficient, resulting in the continuous decline of silicon metal prices. Low-grade silicon dropped to the prices before the Spring Festival.

The downstream consumption was restrained by the pandemic that occurred in many places in China. The common problems of transportation affected the aluminium alloy and silicone industry the most. Due to the pandemic prevention requirements, the difficulty in purchasing raw materials, the shortage of capital aroused by the transportation problem, the low profits, etc., aluminium alloy production was reduced. In addition to the weak domestic downstream consumption of silicone, the exports were suppressed by the pandemic controls in Shanghai, the main import and export place of silicone, silicone prices fell close to the break-even point. Moreover, the demand for silicon metal was suppressed by the low operating rates of silicon monomer producers because of the pandemic.

On the supply side, silicon factories kept the normal production, and the spot supply of silicon metal was abundant. With the support of cost, prices of low-grade metallurgical-grade silicon are expected to stop falling and stabilise. However, the silicon market is going to lose upward momentum as the downstream consumption cannot recover quickly because of the pandemic. Therefore, it is expected that the silicon prices will remain low in April.

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