NEW YORK U.S. silicon
prices have hit new three-year lows due to a combination of
slower demand and excess supply.
Spot prices have dropped to
$1.22 to $1.27 per pound from $1.25 to $1.30 previously,
suppliers and consumers told AMM. It is the first time
prices have fallen below $1.25 per pound since February
"I have enough to get me through
February. Im not actively soliciting for material now.
Ill start looking next month," one consumer said.
"Its been really dead
since the end of the year. No ones done anything. Some
people bought some very cheap metal the last week of December
but now everyone has their material, so no ones looking,"
a supplier added.
"Things have been extremely
slow," another source agreed.
The price decline counters
expectations voiced in December that the market would rise in
the new year due to curtailments at Brazilian producers in 2012
amm.com, Dec. 19).
In November, Brazilian producers
cut silicon production significantly and began selling power
back to the grid for a number of reasons, including weak prices
and a dry winter (
amm.com, Nov. 15).
FerroAtlantica Group SA will
also cut silicon and ferrosilicon production in South Africa by
15,000 tonnes each, citing challenging market conditions and a
national energy saving initiative (
amm.com, Dec. 13).
Taking this supply out of the
U.S. market will undoubtedly raise prices in the future,
For now consumers maintain
Brazilian material continues to enter the United States,
pushing prices lower.
"Ive bought some at $1.24
(per pound) recently. ... There is Brazilian material around,"
a second consumer said.
"I know a couple of (Brazilian)
producers have a surplus and are willing to offer me silicon,"
the first consumer said.
Once this surplus material is
depleted prices will increase, the supplier said.
"There was some Brazilian
material on the water (in late 2012). (That metal) has a 45- to
60-day lag before it gets to (the consumer, but) theres
no more now," the supplier said, adding that while consumers
have material now, their "inventories are quite tight" as
"Nobody is sitting on any excess
of metal," he said. "At some point, people will have to come
back to the market."
The 2013 demand outlook for
silicon is still unclear.
"Theres weaker demand
(from) the chemical industry than anticipated, and I dont
think theres (been) such an increase in demand from the
secondary aluminum industry for automotive," the first consumer
said, adding that the drop in prices has consumers favoring
spot business over contract in 2013.
"In the past Ive done
annual contracts, but Im not willing to do that today. As
long as prices are around $1.22 to $1.26 (per pound), Ill
hold out and do spot business," he said.
While the supplier said most
customers "booked for the year," some opted to "play the spot
market" but "could be hurt if prices go back up."