US silicon metal market declines slightly on still weak demand from smelters

PITTSBURGH (Asian Metal) 16 Jul 09 - US metallurgical-grade silicon metal prices fell slightly in the US market to USD1.09-1.12/lb as demand from domestic secondary aluminum smelters remains incredibly slow.Asian Metal Copyright The source purchased about 100tm in 2008 and buys only through long-term contracts established with close suppliers.Asian Metal Copyright Prices are likely to continue falling in the short-term based on further weakness from the retail sector.Asian Metal Copyright08-1.Asian Metal Copyright

One of the largest producers of silicon metal in North America cited prices at USD1.09-1.13/lb amid diminished but generally stable demand.Asian Metal CopyrightIt is estimated a total of 60% of all silicon metal produced in the US is used directly by auto manufacturers as an alloy with aluminum in casting.Asian Metal Copyright According to the source, the silicon metal market is likely to stay unchanged through the third quarter with increases expected towards the end of the year.Asian Metal Copyright One of the largest producers of silicon metal in North America cited prices at USD1.Asian Metal Copyright

“The auto industry is obviously a big buyer of silicon metal and it will take a while before new car sales come back to where they were in 2008. I think there should probably be some improvements as we head into the fourth quarter,” the producer commented.Asian Metal Copyright09-1.Asian Metal Copyright

It is estimated a total of 60% of all silicon metal produced in the US is used directly by auto manufacturers as an alloy with aluminum in casting.

A large buyer revealed that he had just procured two truckloads of material at USD1.12/lb, but estimated actual domestic price levels at USD1.Asian Metal Copyright12lb.Asian Metal Copyright08-1.12/lb. The source purchased about 100t/m in 2008 and buys only through long-term contracts established with close suppliers.Asian Metal Copyright According to the source, the silicon metal market is likely to stay unchanged through the third quarter with increases expected towards the end of the year.Asian Metal Copyright

“I pay slightly more than I might if I were to buy it directly from the spot market,” the source explained. “The real price is probably a few cents lower than what I pay for it, but I get mine from local suppliers that I know personally.Asian Metal Copyright12lb as demand from domestic secondary aluminum smelters remains incredibly slow.Asian Metal Copyright”

The source further speculated that while additional price erosion is likely, historically the rate of depreciation has been at most USD0.02/lb per week.Asian Metal Copyright”The source further speculated that while additional price erosion is likely, historically the rate of depreciation has been at most USD0.Asian Metal Copyright

“The US market is so well-insulated that even during a recession like this price fluctuations are not like you would see with other commodities. While I believe there is still more room for the price to fall, it will be slow and inconsequential in the short-term,” the source explained.