Spot Chinese silicon metal supply in mainland China has turned sparse in March, as producers begin to overhaul their furnaces, the silicon branch of China Nonferrous Metals Industry Association said in a report in its website Tuesday.
The association said some producers in Xinjiang Uyghur Autonomous Region, Northwest China, are taking turns to overhaul their furnaces this month, with most producers in China having few spot cargoes, so supporting prices.
Xinjiang is the second-largest silicon production base in China, with regional silicon capacity of 1.05 million mt/year, figures from CNIA showed.
In the provinces of Yunnan and Sichuan, in Central and Southwest China, China's biggest and third-largest silicon production bases respectively, provincial operating rates have been low this month, due to the dry climate and inspections by the Ministry of Environmental Protection, CNIA said. Silicon production in China has relied heavily on hydro power supply.
Yunnan has a provincial silicon output capacity of 1.2 million mt/year, while Sichuan has a capacity of 700,000 mt/year, CNIA figures showed.
CNIA said both traders and producers reported thin trade during the second week of March, with producers who were still running having mostly produced according to orders.
With less spot supply, Chinese domestic prices for 553 silicon metal were at Yuan 10,700-10,800/mt ($1,546-$1,561) in the second week of March, up Yuan 100/mt from Yuan 10,600-10,700/mt in the first week of the month, CNIA figures showed.
Domestic prices for 441 silicon were at Yuan 11,900-12,000/mt ($1,720-$1,734/mt) last week, up Yuan 200/mt from Yuan 11,700-11,800/mt in the previous week.
FOB China prices for 553 silicon stood at $1,530-$1,560/mt last week, up $20/mt from $1,510-$1,540/mt a week before, while FOB prices for 441 silicon were at $1,700-$1,730/mt last week, up $20-30/mt from $1,680-1,700/mt, CNIA figures showed.
According to CNIA, most overseas buyers concluded Q2 silicon purchase deals at the end of February, with prices in the third week of March stable.
However, the association said that because prices of downstream organic silicon products were rising, along with silicon metal producers' low operating rates and falling inventories, it forecast silicon prices would surge in the coming months when the downstream processing sector starts buying.
