GLOBAL SILICON WRAP: China price consolidates; European market activity rebounds

The Chinese silicon export price softened this week in thin trading while the European market picked up after buyers returned from the summer break.

The Chinese 553-grade silicon export price dipped at the low end to $2,050-2,130 per tonne on Friday September 8, down 0.7% from previously.

Massive and extensive buying from Japanese traders at the end of August pushed China 553-grade silicon export prices to their highest since November 2014 on September 1.

But because most traders from Japan were completing procurement for their customers for the fourth quarter, they slowed their enquiries last week; new large bookings are less likely ahead of November when Japanese buyers will again source materials for the new quarter.

“We’ve completed procurement for the fourth quarter and our next purchases will be in late November for first-quarter procurement for 2018,” a Japanese buyer indicated.

Meanwhile, European buyers have returned to the market and started to make enquiries. Buyers wanted to check where the market was and were reluctant to commit immediately, especially while Chinese export offer prices are so high.

Suppliers from China therefore intend to restrict profits to secure orders for the following weeks.

“Our quotation dropped nearly $100 from last week’s only because we have to, otherwise customers won’t be interested in buying,” a trader said.

On top of that, the domestic silicon price diverged due to cheap materials being offered by traders who wanted to take profits.

Offer prices from traders were 600-700 yuan ($92-107) per tonne cheaper than material from refineries for Kunming delivered, according to market participants. But many believed such a retreat will be limited.

“Silicon prices are still well supported by raw materials costs so even 553-grade silicon price is falling [although] it won’t fall greatly,” a second trader said.

Silicon prices jump in Europe as availability tightens, consumers return from summer break

Silicon prices in Europe increased last week amid tightening availability and after consumers and producers returned to the market after a long summer break.

Metal Bulletin’s assessment for grade 441 silicon, in-warehouse Rotterdam prices were €2,050-2,325 ($2,463-2,794) per tonne, while grade 553 was assessed at €1,950-2,250 per tonne on September 8.

Silicon prices for both grades have been flat since April and May while spot activity has remained subdued throughout the summer months.

“Silicon has been moving in China and the US for months now and the same was bound to happen in Europe,” a trader in Europe said.

“People came back from holidays, saw what has been happening in China and they are ready to purchase” a producer said.

Meanwhile, the market seemed to tighten because Chinese suppliers could not commit to sales quickly due to supply constraints in local markets and changing quotations from refineries.

“There is a real problem with a shortage of material in China. China is not able to supply the market there and not able to finalize their contracts. Chinese producers have been telling their regular customers they can’t commit right now,” another producer said.

“We are just at the starting point of the price increase right now. Prices will continue to go up,” a market participant in Europe said.

“I keep receiving enquiries this week but I have no material to offer. There’s just not much material around,” a second trader said.