Prices of Silicon Metal Continued to Decline Under Pressure

SHANGHAI, Dec 30 (SMM) - Silicon metal prices dropped this week. As of December 29, prices of standard #553 silicon metal were 18,000-18,300 yuan/mt, down 250 yuan/mt WoW; prices of above-standard #553 silicon metal stood at 18,200-18,500 yuan/mt, down 300 yuan/mt WoW. #421 silicon metal (for silicone) prices stood at 19,600-19,800 yuan/mt, down 450 yuan/mt week-on-week. #3303 silicon metal prices moved between 19,400-19,600 yuan/mt, down 200 yuan/mt week-on-week. Major manufacturers in the north continued to lower their quotations, while new orders placed by most of the downstream companies were limited near the end of the restocking period. Some silicon metal sellers dumped their goods to gain cash, which led to a further decline in silicon metal prices.

Aluminium alloy enterprises planned to have longer Chinese New Year holidays this year owing to the pandemic outbreaks and the poor downstream demand. SMM survey showed that small and medium-sized secondary aluminium alloy enterprises have already reduced their production. It is expected that the scale of production reduction will be further expanded next week. The companies will mainly purchase on rigid demand amid the falling prices. The operating rates of silicone enterprises were stable. The overall production costs of DMC dropped, while the silicone trading was slack. Therefore, the mainstream traded prices of DMC were 16,800 yuan/mt, and the low-priced sources were quoted at 16,300 yuan/mt. Output of polysilicon enterprises continued to increase. Accordingly, polysilicon prices dropped greatly this week, with prices of dense polysilicon dipping 51 yuan/kg or 21%. Some polysilicon companies released orders for silicon metal during the week, but the limited volume had little impact on the spot market.

On the supply side, the overall operating rates in Yunnan are high despite the high costs brought about by the dry season in the region.  Producers in Baoshan city are expected to produce normally in January 2023. Some companies in Dehong suspended their production in late December 2022, and some plan to stop the production near the Chinese New Year. But there are also  a small number of silicon companies which have no production suspension plans. Most downstream companies completed the raw material  restocking this week, and they will buy from the spot market only when necessary afterwards. SMM believes that the trading volume of spots will drop further, and the prices will fluctuate with some declines.