Metal Bulletin’s China grade 553 silicon metal export price
inched higher to $2,030-2,120 per tonne fob China on Friday August 25, up 5.1% from previously.
There were a couple of quarterly tenders last week from Japanese buyers for the fourth quarter, stimulating demand in the spot market.
On top of this, spot supply has been tightened by environmental inspections in Sichuan and Xinjiang province – the key production hubs for silicon metal in China – as well as strong demand from the domestic market.
“Refineries don’t have much stock, and we haven’t seen a large volume of metal lying at major ports either. Although a couple of traders did stockpile some materials, it seems a good amount of silicon metal has flown directly to the downstream market,” a trader said.
As a result of these factors, tender prices had already reached well high above $2,000 per tonne fob China by the middle of last week, according to market participants.
Despite the sharp rallies in silicon import prices, Japanese buyers continued to purchase at these levels.
“The tender prices have been very high; however, we have no choice but to buy,” a Japanese buyer said.
However, Japanese buyers told Metal Bulletin they do not expect the current uptrend to persist for much longer.
“The price rally might be capped by mid-October when environmental inspections are finally completed,” a second Japanese buyer said.
“Or if the price continues to rise even after October, refineries in southern China might continue to produce on good profits instead of halting production as they have done every year in the past during dry season,” the same buyer added.
Meanwhile, some traders exporting from China have been cautious in offering and bidding due to the rapid price movements and resultant risks of committing to a price.
“We gave up bidding for the Japanese fourth-quarter tenders, as domestic prices change too fast,” a second trader said.
“We stopped making offers. Previously, we were still able to offer but set a price validity period; now prices from refineries are changing day-to-day,” a third trader noted.
“Under current market conditions, only those who have had some stocks were able to bid for the Japanese tender,” the third trader added.
Europe stays quiet
Conversely, the European silicon market continued to be subdued last week.
Metal Bulletin’s assessment for grade 441 silicon, in-warehouse Rotterdam prices
were assessed at €1,900-1,980 ($2,270-2,365) per tonne, while grade 553
was also unchanged, at €1,800-1,900 per tonne on August 25.
There were few offers heard in the market and no significant business concluded, traders said.
“Prices in China are skyrocketing but Europe is still quiet. Very little spot business is going on in Europe with most market participants covered with long-term contracts,” a trader said.