GLOBAL SILICON WRAP: Chinese price leaps on tightened availability; European spot market remains lacklustre
China’s silicon export price rose sharply, particularly during the second half of the week, largely driven by tightening spot availability, following the official start of the environmental inspection in Sichuan province which has led to the temporary closures of a few refineries in the region.
China 553-grade silicon metal export prices moved up to $1,810-1,860 on Friday August 14, up 10.9% from the previous assessment.
Following the start of the environmental inspections earlier last week in Sichuan province, which accounts for around 80% of the total non-oxygen 553-grade silicon metal production in China, a couple major refineries in the region have been forced to close down, Metal Bulletin understands.
“Those refineries won’t be able to restart production until September 17,” a market source told Metal Bulletin.
Yunnan, another key production hub for 553-grade silicon metal, is also facing difficulties in supplying the metal, according to market participants.
“There are only two qualified producers for 553-grade silicon metal in Yunnan province – one of them stopped offering; the other won’t be able to complete delivery on the previous bookings until mid-August,” a first trader noted.
Under such circumstances, some export traders have been very cautious when making offers.
“We are not making any offers right now as the price moved up too quickly, which our customers have difficulty in accepting,” a second trader said. “In addition, domestic refineries refresh their quotations every day, which means it is too hard for us to make procurement.”
“Refineries don’t have stocks; therefore, we don’t dare to make offers unless we have products at hand, being afraid that we are unable to deliver the cargo to our customers,” the first trader said.
In addition, the appreciation of the Chinese yuan also forced suppliers to raise quotations near the end of last week.
The exchange rate between the US dollar and Chinese yuan stood at 6.68 at about 3pm on August 11, down 0.05 from a week ago.
Meanwhile, the market is expecting mounting demand in September when peak season for silicon procurement arrives, which has led to a stronger price outlook, especially amid production disruptions ahead of the peak season.
“I don’t expect any change in this price trend for Chinese silicon metal by the end of August; actually the strong performance might persist into October,” a Japanese trader said.
US silicon metal prices continue to move up
Meanwhile, supply concerns continued to push spot prices for silicon metal in the USA higher, amid ongoing probes into countervailing and dumping duties.
US spot 553 prices rose to $1.18-1.22 per lb on August 10, up from $1.15-1.17 a month earlier, according to Metal Bulletin sister publication AMM assessments.
This is the highest level since September 2015 when prices were at $1.20-1.25 per lb.
Further increases are expected, fuelled by some of the hefty preliminary countervailing duties announced earlier this week by the US Department of Commerce.
Preliminary subsidy duties were determined at 16.23% for Australian silicon metal exporters; to 52.07% for Brazilian exporters from 3.69%; and 120% for exporters from Kazakhstan, the department said.
“A number of customers have come into the market to buy now before further price increases,” a silicon metal supplier said.
A second supplier commented that it would not make new prompt spot offers under $1.25 per lb “knowing the pipeline will be dry in two months.”
Prompted by petitions filed by a subsidiary of Ferroglobe plc, the US Commerce initiated the countervailing and dumping investigations in the end of March.
The final countervailing duty determinations for the silicon metal probe in the USA are due on December 19.
European spot market remains quiet amid summer slowdown
Last week, the silicon price in Europe was unchanged again in a lacklustre spot market.
Grade 441 silicon, in-warehouse Rotterdam prices were assessed at €1,900-1,980 ($2,246-2,341) per tonne, while grade 553 was also unchanged, at €1,800-1,900 per tonne on August 11.
“Silicon in Europe is still pretty quiet but it’s understandable given the time of the year,” a trader in Europe said.
“We are expecting a pick-up in September when the major players are back from the summer holidays,” another trader said.
GLOBAL FERRO-SILICON WRAP: Supply disruptions continue to fuel Chinese prices; US, EU markets remain in summer lull