Dry season comes, Chinese silicon metal producers raise offers sharply

BEIJING (Asian Metal) 28 Nov 13 – Dry season comes and the power price rises in Yunnan and Sichuan, China.Asian Metal Copyright Buyers have not began to place orders actively on the rising offers.Asian Metal Copyright Silicon metal producers noted that the production cost increases sharply and most of them intend to reduce production in the near future.Asian Metal Copyright Thus silicon metal producers begin to raise offers sharply.Asian Metal Copyright Besides, the power supply in some places of South China will be insufficient and the production volume of silicon metal will be cut down by large range in dry season.Asian Metal Copyright1kwh 1.Asian Metal Copyright Thus silicon metal producers begin to raise offers sharply.Asian Metal Copyright Silicon metal producers noted that the production cost increases sharply and most of them intend to reduce production in the near future.Asian Metal Copyright Buyers have not began to place orders actively on the rising offers.Asian Metal Copyright If the silicon metal price doesn’t rise accordingly, most of the smelters will stop production in the near future.Asian Metal Copyright The transaction prices will be more clear next week.

One source from a silicon metal smelter in Yunnan, which is running one furnace of 12,500kva with an output of 650tpm, told Asian Metal that they have completed deals of 4-2-1 and 4-4-0-2 at RMB13,000-13,100/t and RMB13,000/t Kunming respectively several days ago. He said after hearing the news that the power price will rise by RMB0.1/kwh (1.63cent/kwh) in Dehong, Yunnan from December 1st, they raise offers by RMB400/t (USD65/t) to RMB13,400-13,500/t (USD2,196-2,213/t) and RMB13,400/t (USD2,196/t) Kunming respectively.

The source noted that currently many silicon metal smelters in Yunnan only run half or less than a half of capacity. The power price will rise by RMB0.1/kwh (1.63cent/kwh), which means that the production cost increases by RMB1,000/t (USD163/t) at least.Asian Metal Copyright1kwh 1.Asian Metal Copyright If the silicon metal price doesn’t rise accordingly, most of the smelters will stop production in the near future. “We think the price rising range of RMB300-400/t (USD49-65/t) is acceptable by both producers and buyers and the transaction price may be more clear in next week, then the market is likely to run more active,” said the source.

One source from a silicon metal smelter in Fujian, which is running two furnaces of 6,300kva with an output of around 650tpm, noted that the prices of 4-4-1 and 3-3-0-3 (low P/B) have been stabled at RMB12,700/t (USD2,081/t) and RMB13,600-13,700/t (USD2,229-2,245/t) ex works in the recent three weeks. They raise offers of 4-4-1 and 3-3-0-3 (low P/B) to RMB13,200/t (USD2,163/t) and RMB14,000/t (USD2,295/t) respectively on Wednesday and there are no deals being completed yet at this level.

The source noted that the local power price is RMB0.58/kwh (9.5cent/kwh) and they are producing near to production cost under the current silicon metal price level.Asian Metal Copyright Silicon metal producers noted that the production cost increases sharply and most of them intend to reduce production in the near future.Asian Metal Copyright “We heard the power price rises in Yunnan and Sichuan and the production volume will certainly be cut by large range, so we estimated that the supply will be tight in dry season under the demand situation of this year and raise offers accordingly,” said the source.Asian Metal Copyright The source noted that currently many silicon metal smelters in Yunnan only run half or less than a half of capacity.Asian Metal Copyright