China's national silicon metal operations rate in December is estimated to drop to 30% from 52% in November, likely leading to a price rebound, China Nonferrous Metals Industry Association said Friday.
China has national silicon metal output capacity of 4.6 million mt/year, with Yunnan and Xinjiang, China's biggest and second biggest silicon producer, having output capacity of 1.3 million mt and 1.05 million mt a year, respectively, data from CNIA showed.
Chinese domestic price offers for oxygen 553 silicon were at Yuan 12,700-12,900/mt ($1,905-$1,935/mt) this week, up Yuan 50-100 from last week, as Chinese traders began a new round of inventory replenishment before the New Year, data from CNIA showed.
The association said with the dry weather in South China, some silicon furnaces there have begun shutting for maintenance this week and forecast spot supply would tighten soon. Chinese silicon production is highly dependent on hydro power.
CNIA said there had been a slight price rebound this week after the falls in November took prices low enough to spur traders to buy this week, completing their fourth-quarter sale deals.
However, CNIA said as the end of the year was approaching, it expected some Chinese producers to cut prices in the coming days to lift sales to get funds.
It said aluminum alloy producers overseas in general sign orders with Chinese traders on a quarterly basis, who would buy a vast amount of stocks at low prices.
The association this week saw strong overseas demand as Christmas and the New Year is drawing near, with shipments for December orders to be sent this week and next.
It forecast China's silicon export market would boom after the Christmas and New Year holidays.
China's January-October silicon metal exports hit 672,000 mt, up 20.4% year on year, with FOB prices for 553 silicon averaging $1,786/mt, data from CNIA showed.
