China 553-grade silicon metal export prices hit $2,080-2,130 per tonne on Friday September 1, up 1.4% from the previous week, which marks the smallest increase since July 14 when prices started to rise.

Trading activity was relatively thin last week after some Japanese buyers completed their tenders for the fourth quarter. Although some other Japanese traders didn't purchase as much material as they initially set up for in last week's tender, they were cautious about near-term procurement in the spot market.

“We only completed part of the procurement task for the fourth quarter that our customers had required,” a Japanese trader said. “However, we won’t rush for the spot market very quickly as we still need to take a look at where the market might go.”

“The tender prices obviously were higher than Japanese buyers had expected. Therefore, they intend to take a watchful stance in the near future,” a Chinese trader pointed out.

In China, domestic 553-grade silicon quotations from refineries inched higher, although the market has seen cheaper offers and sales from middle-men looking to take profit amid thin trades.

Meanwhile, refineries in southern China have joined forces to try to keep the current ascent trend steady as they did at the start of July. However, market participants doubted whether they could achieve the same effect.

“Orders at a later stage might not flow excessively to refineries as they did at the start of this summer,” a second Chinese trader said.

“The reason why export traders continued to place orders to refineries when the price rose so sharply after mid-July was that they had over-booked to overseas customers in May and June on the outlook that the price would fall in summer as it usually does. In other words, they had to buy under any circumstances in order to fulfill their bookings with overseas customers,” the same trader added.

“However, right now, export traders without stocks will be cautious in purchasing silicon metal from refineries,” he said.

However, although an increasing number of export traders have started acting more cautiously towards procurement and making offers, they are far off being pessimistic on the price outlook given that silicon metal prices are still well supported by fundamentals, market participants pointed out.

“We expect that supply tightness will persist for a while even after environmental inspections, especially for non-oxygen grade 553 silicon metal,” the second trader noted.

“Silicon prices will be well supported as raw materials costs have been quite high,” a third trader from China said.

Europe remains quiet

European spot markets continued to be quiet last week.

Metal Bulletin’s assessment for grade 441 silicon, in-warehouse Rotterdam prices were assessed at €1,900-1,980 per tonne, while grade 553 was also unchanged, at €1,800-1,900 per tonne on September 1.

“Prices in China keep increasing, but Europe is quiet with stable prices,” a trader in Europe said.

“I’ve had few enquiries, people are starting to return to the market after the summer break but no significant spot business has been concluded so far,” a second trader said.

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