China’s grade 553 silicon metal export price dropped to $1,790-1,880 per tonne on Friday September 22, down 6.9% from its previous assessment of $1,940-2,000 on September 15.
“The supply for grade 553 silicon metal is not as tight as it was couple of weeks ago,” one trader source indicated.
The average winning price for a tender from a Japanese trader last week came at about $1,810 per tonne on cif basis, Metal Bulletin understands.
There were two other Japanese tenders seeking cargos to be delivered throughout October and November last week; however, neither got valid bids above the floor prices, according to market participants.
“I didn’t bid very low because the delivery is required for the fourth quarter, and I will need to bear the risks of losing money if the price rises in the winter,” a second trader said.
Many Chinese suppliers shared the same outlook due to the rising cost of raw materials for silicon production.
The procurement cost for graphite electrodes, a raw material used in silicon production, has risen sharply since the beginning of this year due to environmental protection – it rose to about 23,000 yuan ($3,486) per tonne in September from over 8,000 yuan per tonne in February, according to market participants.
“The cost for raw materials [has] put pressure on refineries. If the silicon price continues to be subdued, then producers are expected to stop production in order to keep the books balanced,” a third trader said.
Carbon electrodes, another raw material, are also facing potential supply tightness due to environmental restrictions over the period when central heating demand increases in northern China.
“Refineries might choose to halt production due to the shortfall on electrode output, which will in turn limit [the] supply of silicon metals,” a fourth trader said.
“It is still too early to say whether the price will rebound largely, at the least, the descent trend will end soon,” the same trader added.
European silicon prices move up again
In contrast, silicon prices in Europe have experienced a drastic increase this September as demand continues to improve after a price plateau earlier in the year.
Metal Bulletin’s assessment for grade 441 silicon, in-warehouse Rotterdam prices moved up to €2,190-2,300 ($2,609-2,740) per tonne on Friday September 22, up 2.6% from the previous assessment.
Grade 553 also moved higher to €2,100-2,205 per tonne, up 2.5% from €1,950-2,250 assessed on September 15.
Silicon prices for both grades had been flat since April and May while spot activity remained subdued throughout the summer months.
“Demand is still strong and there is good momentum on prices,” one producer said.
“China is still not able to supply the market domestically and lots of contracts had to be renegotiated. It’s still tight there. Shipments of Chinese material have completely stopped now,” a European trader said.
“I don’t see any downside for silicon prices in Europe right now. The positive momentum should continue,” a second trader based in Europe said.
The Chinese silicon export price has dropped for the third consecutive week due to supply tightness easing, whereas European silicon prices have moved up on improved demand.