Upside Momentum of Silicon Metal Muted with Thin Market Transactions

SHANGHAI, Jun 27 (SMM) – The trading market of silicon metal turned muted last week after metal prices rose the week before. And actual traded prices showed signs of falling as the goods holders were more willing to sell. In details, the prices of 553# without oxygen and with oxygen stood at 17,800-17,900 yuan/mt and 18,400-18,700 yuan/mt respectively in east China last Friday June 24, up 450 yuan/mt (3%) and 550 yuan/mt (3%) respectively on a weekly basis. 441# silicon metal was offered at 19,100-19,400 yuan/mt up 650 yuan/mt or 3% week-on-week. The prices of 3303# silicon stood at 19,800-20,000 yuan/mt, an increase of 550 yuan/mt or 3% from a week ago.

The silicon metal market experienced violent fluctuations in June. Silicon metal prices surged early in June as the purchasing interest of traders and downstream players was fully stimulated by falling silicon metal prices earlier, when leading silicon metal factories raised the prices accordingly. In addition, traders actively made shipment after successfully taking profits from rising silicon metal prices. Silicon metal factories, meanwhile, were more willing to sell as well, resulting in sufficient supplies. But downstream players stood on the sidelines at this time as the prices rose too fast. And some goods holders lowered their offers in order to revive the trading market.

Chemical grade silicon prices also rose following the metallurgical grade silicon. The prices of 421 # silicon (for silicone) stood at 20,000-20,500 yuan/mt last Friday, but actual transactions were rare as most silicone factories were still digesting their in-plant raw material stocs.

On the demand side, the operating rates of aluminium alloy remained stable, while orders from the downstream die-casting sector remained poor, hence market players stood wait-and-see concerning the purchase of silicon metal, the auxiliary material, amid falling aluminium prices and high manufacturing cost. In terms of polysilicon, the operating rates in some place dropped as a fire accident resulted in extensive shutdown of local polysilicon manufacturers, reducing the polysilicon output by around 3,000 mt in June. The prices of DMC stood at 20,400-20,800 yuan/mt. The demand for silicon metal in the silicone sector was low as the terminal demand has not yet fully recovered.

On the supply side, silicon plants in Yunnan province gradually resumed the production in June, with output yielded last week. The downstream remains quiet as a whole. And the market is relatively bearish amid supply pressure of silicon metal, with prices likely to fall again this week.