Cargo Holders of Silicon are More Willing to Deliver amid Bearish Outlook and the Transaction Prices of Silicon Metal Fell

SHANGHAI, Nov 4 (SMM) - Prices of silicon metal generally declined slightly this week. As of November 3, prices of standard #553 silicon metal in east China were 19,500-19,800 yuan/mt, down 500 yuan/mt or 2% WoW, those of above-standard #553 silicon metal stood at 20,700-21,000 yuan/mt, down 500 yuan/mt or 2% WoW, and those of #421 silicon metal were 21,600-21,800 yuan/mt, down 250 yuan/mt or 1% WoW. Some silicone and polysilicon companies placed orders, and the market transaction improved limitedly compared with last week. Cargo holders of silicon metal became more willing to ship amid the game between the buyers and sellers, but downstream companies still held a wait-and-see sentiment and intended to lower their offers. As a result, some holders cut their quotes to clinch a deal as the spot supply was abundant, hence the silicon metal prices dropped slightly.

On the demand side, the operating rates of aluminium alloy enterprises were stable. Primary aluminium alloy plants were more willing to purchase raw materials amid the falling aluminium prices and the better downstream demand. However, secondary aluminium alloy companies mainly purchased silicon metal on rigid demand because of the sluggish downstream demand and the cost pressure caused by the aluminium scrap prices. The operating rates of silicone companies remained low. Prices of #421 silicon metal and methyl chloride became lower, but monomer manufacturers that purchase raw materials externally still bore pressure, thus the #421 silicon metal demand decreased. With the ramp-up of new capacity earlier, the existing capacity of polysilicon enterprises was on the rise, and the demand for silicon metal boomed.

Insufficient new orders of silicon metal companies and shipments of some cargo holders in panic have weakened the prices in recent days. At present, the bearish sentiment prevails in the market, which will be alleviated by the release of orders from polysilicon producers to some extent.  However, the short-term silicon metal prices will not stop falling and stabilise quickly due to abundant supply. Therefore, silicon metal prices will mainly remain rangebound with some declines next week.