GLOBAL SILICON WRAP: Supply disruptions continue to support Chinese price; European market stagnates in summer lull
China’s silicon price leapt up for another week due to supply disruptions at several key production hubs as a result of strict environmental inspections, while the European spot market was subdued due to weak consumption over the summer.
China’s grade 553 silicon export price marched higher to $1,950-2,000 per tonne on Friday August 18, up 7.6% from the previous assessment.
Supplies in both Sichuan and Xinjiang province have been greatly affected due to continuing environmental inspections in both regions, which led to widespread suspensions to regular production, according to market participants.
Eight environmental inspection teams have been sent to eight provinces in China, including Xinjiang, Sichuan and Zhejiang, for one-month environmental supervisions and inspections, commencing in mid-August, China’s Ministry of Environmental Protection said.
With environmental inspections strengthened in Sichuan and Xinjiang province, the market experienced more supply disruptions. As a result, ex-works quotations in both regions rose around 1,000 yuan ($150) per tonne for the past one week, market players told Metal Bulletin.
“I don’t think the refineries in Sichuan province are able to resume production very soon, at least not by the end of August,” a China-based trader said.
“Xinjiang province is no better than Sichuan,” a producer said. “The price might continue to move up due to the environmental issues.”
Meanwhile, there has not been active trading activities for the past week due to the absence of Japanese buyers during the traditional Summer Obon Festival on August 11-16.
However, a couple of tenders from Japanese traders will be held next week, signalling the commencement of procurement for the fourth quarter from Japanese buyers, according to market participants.
Japanese buyers have raised their expectations for tender prices, having witnessed the continuous rally in Chinese silicon export prices, while showing concern towards the price outlook in the winter when some southern Chinese refineries traditionally halt production during dry seasons.
“The price development this year is totally different compared with previous years,” a Japanese buyer told Metal Bulletin.
Chinese silicon export prices are usually depressed from June when producers ramp up production due to cheaper hydroelectricity during rainy season and there is an ample supply in the spot market. However, prices have bucked the trend this year.
On Friday, Metal Bulletin’s China grade 553 silicon export price moved up for the sixth consecutive pricing session, having climbed 33% higher than prices on July 7 when the price first started to rally.
The average grade 553 silicon price for the start of June to August 18 is nearly 10% higher than last year.
All quiet in Europe
Over in Europe, the silicon price was unchanged again in a lacklustre spot market as the summer slowdown continued.
Grade 441 silicon, in-warehouse Rotterdam prices were assessed at €1,900-1,980 ($2,233-2,328) per tonne, while grade 553 was also unchanged, at €1,800-1,900 per tonne on August 18.
“The silicon spot market in Europe remains very quiet. There is very little spot activity as the summer lull continues,” a trader in Europe said.
“Hopefully in September we will see some pick up after everyone is finally back from summer holidays,” a second trader said.
“There is lots of activity in China and the US but we are just not seeing this in Europe at the moment,” a third trader said.