Spot prices of 98.5% 553-grade silicon metal in Asia rose further this week on tight supply and high demand as Chinese producers limit sales in anticipation of higher prices to come.
The Chinese export price was assessed by Platts at $1,930-1,995/mt FOB China Thursday, up from $1,870-1,950/mt FOB China on September 12. There was no assessment last Thursday due to the Mid-autumn festival in China.
Chinese producers and traders reported transactions over the week at $1,930-1,995/mt FOB. One producer with facilities in Hunan, Guizhou and Sichuan sold over 700 mt to buyers in Southeast Asia and Japan at around $1,995/mt FOB for October-November loading from Huangpu port.
"We have since raised our offer prices to $2,020/mt FOB," said an official with the producer.
A Hong Kong-based trader sold around 50 mt to a Middle Eastern buyer at $1,930/mt FOB for October loading from Huangpu this week. "It is very hard to offer to customers now as prices are increasing by $10/mt each day," he said.
Chinese producers are limiting sales as they see prices rising further towards the end of the year as the dry season in the south approaches and power rates rise. Several provinces, including major silicon bases like Yunnan and Sichuan, have already planned power rate rises in October, sources said.
JAPAN INTEREST
Meanwhile the spot price of 553-grade silicon metal imported into Japan rose to $1,970-2,000/mt CIF Japan Thursday, up from $1,960-1,980/mt CIF Japan a week ago. The price has been rising for seven consecutive weeks, from $1,810-1,830/mt CIF on August 11.
Trade remained robust this week as Japanese traders and end-users were expecting a further price rise in October. Some Chinese traders and producers have suspended spot offers, fueling Japanese buying interest further.
Deals were reported at $1,970-2,000/mt CIF Japan, for 60-200 mt lots for November loading from the South China ports of Huangpu or Guangzhou.
Traders said offers were in a wide range. "I have received offers at $2,000-2,060/mt CIF Japan for 553-grade but $2,000/mt CIF is the limit for my customers," said one Tokyo trader.
Another Tokyo trader, who had closed a deal at $1,980/mt CIF Japan this week, said his company was buying small lots every week rather than buying a large single lot, to diversify risk.
The highest offer he received this week was at $2,050/mt CIF Japan, he said, adding that 99% 441-grade was offered at $2,090/mt CIF Japan.
One Japanese secondary aluminum alloy smelter official said he was offered Yen 210/kg ex-warehouse ($2,020/mt CIF Japan) and had planned to accept this offer as his silicon stocks were low.
"I cannot stop my factory so I will buy for October-December," the official said. He was offered $2,150/mt CIF Japan for 441-grade, he added.
Japanese traders said most end-users were not ready to pay Yen 210/kg yet.
"There are end-users who would buy at any price because supply stability is important, but other end-users have budget limits as they have profit targets," said a second trader.
One major automaker has reduced purchase price of ADC12 aluminum alloy, with up to 12% silicon, by Yen 5-10/kg for October-December from July-September. Alloy spot prices were heard at Yen 220-230/kg ex-warehouse this past month.
But Japanese end-users may be forced to accept the Yen 210/kg price after the Chinese National Day holidays in the first week of October. "Prices usually rise after a long Chinese holiday, as more people need to buy," said one Japanese trader.
Chinese domestic 553-grade silicon prices at Huangpu port rose to Yuan 11,800-12,000/mt ($1,919-1,952/mt) Thursday, from Yuan 11,500-11,600/mt on September 12.
