Offers from Chinese silicon metal smelters up slightly
2011-12-07 09:44:15 [Print]
BEIJING (Asian Metal) 7 Dec 11 – With the increasing power price and decreasing operating rate, Chinese silicon metal smelters are in no hurry to lower offers further to promote sales this week. The mainstream offers from domestic smelters are stable and some even increase slightly, while the market trading has not seen obvious improvement.
A source from a silicon metal smelter in Guizhou claimed that their last deal for 5-5-3 was concluded at around RMB11,700/t (USD1,845/t) in ports in late November and do not make offers now. According to the source, the power price in Guizhou was around RMB0.535/kwh (8.43cent/kwh) in November and increased by around RMB0.03-0.05/kwh (0.47-0.78cent/kwh) from December 1st following the power price adjustment policy from the National Development and Reform Commission (NDRC). As the silicon metal market is unfavorable and the production cost increases further, they stopped production on December 1st.
“The power price in China increases, which makes the situation for smelters even harsher, and we choose to stop production as the current market price cannot afford the production cost,” said the source. “The operating rate is around 20% in the local area and we do not intend to resume production before the Spring Festival holiday. We are in no hurry to sell materials now.”
A trader in Guangdong, with a regular trading volume of around 800tpm for silicon metal, claimed that the offers from smelters are stable or even increase slightly this week. They purchased 60t of 5-5-3 and 120t of 5-5-3 oxygen-blown from Yunnan at RMB11,700/t (USD1,845/t) and RMB12,300/t (USD1,940/t) d.d.p respectively on Monday, which increased by RMB100/t (USD15/t) against their last purchasing in last week. They purchased 100t of 4-4-1 at RMB12,800/t (USD2,018/t) d.d.p from Yunnan last week and the offers increased to RMB12,900-13,000/t (USD2,034-2,050/t) d.d.p this week, but they did not place orders.
The source noted that the silicon metal price has dropped a lot in the past two months. On the increasing power price and decreasing operating rate, the offers turned stable or even increased slightly this week, but the overall market deals have not seen obvious improvement. The inventory in the market is still large and the demand is not strong in the year end, so silicon metal price will stop dropping but it is difficult to rebound strongly in the near future.
A source from a silicon metal smelter in Guizhou claimed that their last deal for 5-5-3 was concluded at around RMB11,700/t (USD1,845/t) in ports in late November and do not make offers now. According to the source, the power price in Guizhou was around RMB0.535/kwh (8.43cent/kwh) in November and increased by around RMB0.03-0.05/kwh (0.47-0.78cent/kwh) from December 1st following the power price adjustment policy from the National Development and Reform Commission (NDRC). As the silicon metal market is unfavorable and the production cost increases further, they stopped production on December 1st.
“The power price in China increases, which makes the situation for smelters even harsher, and we choose to stop production as the current market price cannot afford the production cost,” said the source. “The operating rate is around 20% in the local area and we do not intend to resume production before the Spring Festival holiday. We are in no hurry to sell materials now.”
A trader in Guangdong, with a regular trading volume of around 800tpm for silicon metal, claimed that the offers from smelters are stable or even increase slightly this week. They purchased 60t of 5-5-3 and 120t of 5-5-3 oxygen-blown from Yunnan at RMB11,700/t (USD1,845/t) and RMB12,300/t (USD1,940/t) d.d.p respectively on Monday, which increased by RMB100/t (USD15/t) against their last purchasing in last week. They purchased 100t of 4-4-1 at RMB12,800/t (USD2,018/t) d.d.p from Yunnan last week and the offers increased to RMB12,900-13,000/t (USD2,034-2,050/t) d.d.p this week, but they did not place orders.
The source noted that the silicon metal price has dropped a lot in the past two months. On the increasing power price and decreasing operating rate, the offers turned stable or even increased slightly this week, but the overall market deals have not seen obvious improvement. The inventory in the market is still large and the demand is not strong in the year end, so silicon metal price will stop dropping but it is difficult to rebound strongly in the near future.
Silicon Metal 3-3-03 FOB China
Unit:USD/mt
China silicon metal producers' inventory statistics by province by month
Unit: mt
