China’s grade 553 silicon metal export price
dipped to $1,940-2,000 per tonne on Friday September 15, a drop of 5.7% from previously.
The supply tightness of grade 553 silicon metal in China has eased thanks to the resumption of production at refineries in Sichuan province after environmental inspectors left the region.
Earlier in August, refineries in Sichuan province, a key production hub of grade 553 silicon metal in China, had been forced to halt production due to a one-month environmental inspection, which pushed the silicon export price to almost three-year highs.
“We’ve noticed recovered supplies at major ports in China,” a trader said.
Meanwhile, traders who had stockpiled some materials ahead of the price rally in the summer continued to take profits in the spot market, though less cheap material was offered.
The cost to purchase silicon metal for export traders decreased by an average of about 1,000 yuan ($152) per tonne from last week, market participants told Metal Bulletin.
At the same time, consumers have temporarily halted procurement and intend to take a “wait-and-see” approach especially after export prices have been falling in the past two weeks.
The majority of Japanese traders have completed procurement tasks for the fourth quarter, though there is still one tender from a Japanese trader outstanding. The volume for the tender is limited.
“We’ve had enough stock, and we would like to wait as we think the export price in China will fall further,” a Japanese buyer told Metal Bulletin.
Buyers from Middle East also completed their last quarter procurement earlier in July, according to market participants.
“It is quite hard to tell when Middle East buyers will purchase again for the first quarter of 2018. The Chinese export price had rallied too sharply in previous months,” a second trader said.
However, market sentiment has been bullish even after the price retreated for the second consecutive week.
“We will only see a limited retreat on prices ahead of dry season starting from late October to early November, as high costs for raw materials to produce silicon metal are able to lend strong support to the light metal price,” a third trader said.
“Refineries are not willing to sell cheap, while traders are also reluctant to sell any cheap materials with an outlook that the price would move up during dry season,” the first trader said.
As is usual practice, some refineries in southern China will choose to halt production during dry season in November-April when they need to bear higher costs on power because of a fall in hydroelectricity supply.
European silicon prices remain firm amid increased demand
Silicon prices remained firm in Europe last week as enquires kept increasing and supply tightened. Metal Bulletin’s assessment for grade 441 silicon
, in-warehouse Rotterdam prices were €2,050-2,325 ($2,447-2,776) per tonne, while grade 553 silicon
was assessed at €1,950-2,250 per tonne on September 15, unchanged from the previous assessment.
“Prices are continuing to be firm for all silicon grades,” a silicon trader in Europe said.
“We have a lot of demand from non-regular consumers, India, South Korea, Japan, Middle East, and unexpected additional demand from our regular customers, particularly big consumers. This indicates that Chinese silicon supply is below expectation,” a producer added.
“We are expecting this situation to last for some time given cost issues Chinese are facing,” the producer explained.
As well, temporarily production stoppage at United Silicon in Iceland helped to support prices last week, traders noted.
The plant has closed earlier this month for upgrades and maintenance and should be back to production in the next three to five months, according to the plant’s spokesperson.