China’s silicon metal export prices continued to be fuelled by rising raw materials costs, Metal Bulletin learned in the latest pricing session.
China grade 553 silicon export prices rose to $1,850-1,910 per tonne fob China on Friday October 20, up 0.8% from previous assessment.
Late last week, buyers from Japan received offers as high as $1,950-2,000 per tonne, according to sources in the country. They were still reporting offers at around $1,900 per tonne cfr Japan early last week.
The rising costs of raw materials used to produce silicon metals have weighed on operations at silicon refineries that have chosen to protect against losses by cutting production.
The spot market quotation for silicon raw material graphite electrode has more than tripled from the May-June period, according to market participants. Electrode prices are believed to have rallied due to tightened supply, market sources told Metal Bulletin.
“Operations at electrode plants in Henan province, a key production centre, have completely been suspended [on environmental protection scrutiny]; though refineries are still able to purchase materials from northeastern China, they need to pay more,” a trader said.
Under such circumstances, silicon refineries have attempted to take precautions against losses, such as by suspending production partially or completely.
“Together with rising power costs in winter, some refineries – especially those in southern China – have stopped the procurement of electrodes and are ready to halt operations in the following months,” a second trader added.
Having witnessed a strong rebound in silicon prices, downstream consumers started to ramp up procurement ahead of a further price leap.
“Chinese aluminium alloys producers have bought more silicon metal than they did in the previous few weeks, [based on] an outlook that silicon metal prices will continuously move up,” the second trader said.
“Now I think Chinese silicon export prices are back on the ascent, I will increase procurement volumes gradually,” a trader from Japan said.
Low stocks support European prices
Meanwhile, silicon prices in Europe were unchanged last week, but continued to be supported by low availability of material, market participants said.
Metal Bulletin assessed grade 441 silicon, in-warehouse Rotterdam prices at €2,215-2,325 ($2,609-2,739) per tonne on Friday, unchanged from the previous assessment.
Grade 553 prices were also stable at €2,150-2,200 per tonne.
“Prices are still firm with very limited availability till the end of this year,” a Europe-based producer said.
“The unexpected rise in demand in Europe is supporting prices here, [coupled] with problems getting material from China,” the producer added.
“It seems the positive sentiment will continue,” a European trader said.
“Grade 441 seems to be tighter than 553. I’m getting lots of enquiries but I’m not able to offer right now,” the producer said.
Silicon export prices fob China continued to move up in the latest pricing session, while the European market was stable on tightening material availability.