LONDON U.S. silicon
market participants expect an uptick in prices early next year
as more supply is taken out of the domestic market.
significantly curtailed output in November as they opted to
sell power back to the spot market instead of making silicon
due to a combination of factors, including weak U.S. prices and
a dry winter (
amm.com, Nov. 15).
FerroAtlántica Group SA recently announced it would cut
silicon and ferrosilicon production in South Africa by 15,000
tonnes each due to difficult market conditions and a national
energy-saving initiative (
amm.com, Dec. 13).
The market appears to have
already settled into that trend as Brazil sent 2,292 tonnes of
silicon to the United States in October, down from 6,724 tonnes
in September. Similarly, South African material totaled 594
tonnes in October, down from 2,012 tonnes in September,
according to U.S. International Trade Commission data.
Taking supply out of the market
will undoubtedly yield higher prices, which are now at two-year
lows of $1.25 to $1.30 per pound, sources said.
"I think its about to get
really interesting," one supplier told AMM. "We have
the Brazilian situation and FerroAtlántica cutting
production in South Africa. I think a lot of people have
curtailed capacity, and we are burning through inventory very
quickly. We are very short on inventory."
Although seasonality led to a
few deals at $1.24 per pound this past week, suppliers reported
deals at $1.27 per pound. They anticipate prices will surpass
the $1.30-per-pound mark by as early as January.
"Theres not a whole lot of
activity out there, but Im quoting north of $1.25 (per
pound) and I have sold some higher," the first supplier
"Silicon is picking up," a
second supplier said.
There is "very little product
from Brazil" and there will be less material entering the
United States from South Africa after
FerroAtlánticas cutbacks, both of which will
support higher prices next year, he said.
While the first supplier
reported some signs of seasonality, the second supplier said
demand has been decent.
"Customer orders continue to be
strong," he said. "Were seeing new inquiries from
semiconductor, chemical and auto-related secondary aluminum
customers right now."