Outlook of Cargo Holders Diverged and Downstream Enterprises Purchased Silicon as Needed

SHANGHAI, Oct 28 (SMM) - Upstream and downstream enterprises in the silicon metal market remained in a stalemate this week. The prices of some metallurgical-grade low-grade silicon metal fell slightly, while the prices of other specifications were stable. As of October 27, the prices of standard #553 silicon metal in east China lost 150 yuan/mt on a weekly basis to 20,000-20,300 yuan/mt, those of above-standard #553 silicon metal were flat between 21,200-21,500 yuan/mt, those of #421 silicon metal were unchanged between 21,900-22,000 yuan/mt, and those of #3303 silicon metal were also stable between 22,000-22,200 yuan/mt. New orders were limited amid strong downstream wait-and-see sentiment. And the transactions were small in volume. Large producers in north China raised their offers of above-standard #553 silicon metal by 300 yuan/mt to 21,800 yuan/mt, but downstream buyers rejected the price hike. Some silicon metal plants and traders held their quotes less firm in order to promote the sales.

One the supply side, Sichuan officially adjusted the electricity prices for the dry season on October 26 with immediate effect. Yunnan will adjust the electricity prices to around 0.51-0.52 yuan/KWh on November 1. The silicon plants in Sichuan and Yunnan produced stably this week as there was no further power cuts in Dehong city. The maintenance of railways in Nujiang in late November may affect the production of some local RKEFs. On the demand side, the operating rates of aluminium alloy and silicone enterprises declined. Some smaller enterprises either reduced or stopped their production. The capacity of polysilicon enterprises continued to ramp up, but their bid invitation was delayed, which inhibited silicon metal milling enterprises’ purchasing enthusiasm.

It is expected that the market transactions will improve towards the end of this month and around the beginning of next month. Silicon metal plants will maintain high operating rates. As the electricity prices in Sichuan and Yunnan rose and the costs increased,  sentiment of upstream and downstream players diverged. Silicon metals prices are expected to remain largely stable under the support of cost and rigid demand.