Silicon Metal Prices Dropped amid Weak Demand and Strong Supply

SHANGHAI, Jul 5 (SMM) – The silicon metal prices dropped after rising for several straight days. As of last Friday, the prices of 553# silicon metal without oxygen stood at 16,100-16,300 yuan/mt in east China, down 9% or 1,650 yuan/mt on a weekly basis; prices of 553# silicon with oxygen were 16,800-17,200 yuan/mt, down 1,550 yuan/mt or 8% from a week ago. 441# silicon was reported between 17,700-17,900 yuan/mt, down 1,450 yuan/mt or 8% week-on-week, and 3303# silicon saw a weekly drop of 7% or 1,450 yuan/mt to 18,400-18,500 yuan/mt.

The silicon metal prices fluctuated wildly, mainly because the prices once fell to the break-even point of some silicon plants, which were eager to see a price hike. Meanwhile, the release of downstream rigid demand as well as active engagement of traders on dips strongly shored up silicon metal prices.

But in the case of strong supply and weak demand, the prices did not find a solid support; with transactions turning quieting, silicon traders sold off after taking profits. Silicon plants, on the other hand, were more willing to ship. As such, silicon metal prices dropped quickly.

In east China, 421 # silicon (for silicone) prices stood between 18,500-19,000 yuan/mt, and chemical-grade 421#, due to falling metallurgical-grade silicon prices as well as sluggish downstream demand, experienced price drops as well. And silicone manufacturers purchased less amid high prices.

On the demand side, the operating rates of aluminium alloy were relatively stable, though the recovery of automobile sales could not be reflected in the alloy sector immediately. However, the operating rates could not rebound significantly either with the approaching of the seasonal off as well as slightly falling aluminium alloy ingot prices and poor die-casting orders. The prices of DMC dropped to a low of 18,800 yuan/mt last Friday, which was also the break-even point of most monomer plants, which have already suffered losses based on the current prices of 421# silicon.

Currently, most monomer plants have not yet started their tender projects even at the beginning of the month for a couple of causes, including high raw material cost, rising in-plant silicone inventory, and the intention to reduce the production. The operating rates of polysilicon plants were flat from a week ago. The prices of recharging polysilicon rose above 190 yuan/kg amid supply tightness caused by production reductions in Xinjiang. The polysilicon industry maintained high prosperity.

As silicon prices fall, prices of metallurgical-grade low-grade silicon showed signs of stabilising, while the downstream either forced down the prices or stood wait-and-see. The operating rates of suppliers have remained high, while the weak demand and falling prices in the largest downstream sector of silicone sent silicon metal prices lower. It is expected that silicon metal prices will fall again this week.