Large factories cut silicon prices and reduced inventories under great pressure

SHANGHAI, May 13 (SMM) — The silicon metal market in April was mainly based on the decline in low-grade silicon. Oxygenated 553# and other 5 prefix silicon fell due to increased sales pressure from the northern silicon factory under high load. East China oxygenated 553# silicon fell by more than 1,000 yuan/mt in only one month. Other specifications followed the decline, while due to the relatively small supply, the decline was less than that of the 5-head silicon. Among them, the monthly average prices of chemical grade 421# only dropped by 200 yuan/mt to around 14,700 yuan/mt.

Output of large factories in Xinjiang increased to a record high, and the output was dominated by 5 prefix silicon. Oversupply was the fundamental reason for the decline in the prices of 5-head silicon. However, April was still in the dry season in southwest China. Yunnan silicon plants delayed the opening of the furnace due to the unresolved electricity prices. 441#, 3303# and other specifications with the south as the main source of supply were tight and the prices were firm, and it was difficult to find the source of 5 prefix silicon. Aluminium alloy manufacturers in Southwest and South China were turning to Xinjiang to purchase cheaper silicon.

Since May, silicon plants in the two major production areas Sichuan and Yunnan will be ignited due to the increase in power supply. However, the increase in power costs during the flood period and the increase in raw material prices will delay the resumption of production of the silicon plants. It is expected that the supply in the South will not increase sharply in May. The pricing initiative of the 5 prefix silicon is still in the hands of large northern manufacturers. The stage of lowering prices to digest inventory has ended. After low-grade silicon rebounds slightly, other specifications will see stable prices. The resumption of production process of Yunnan silicon plant will be monitored. If the number of furnaces opened in June is less than that in the same period of last year, silicon prices may rise against the trend during the flood period.