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Silicon prices hold amid mixed outlook

Keywords: Tags  Silicon, silicon prices, automotive, aluminum scrap, Suzy Waite

NEW YORK — Quiet spot demand has kept silicon prices steady, although market participants remain divided on the future direction of prices.

AMM’s silicon price range is between $1.23 and $1.28 per pound.

While consumers say business is mediocre at best and insist there are no indications that prices will do anything but move sideways or even down, suppliers anticipate a pickup in end market demand this year, led by a strong automotive sector, and maintain that prices will undoubtedly rise as a result.

A consumer source said that no supplier is willing to sell him fourth-quarter 2013 material because they assume prices will go up soon. "I can’t get a commitment for the fourth quarter. I think it’s the suppliers’ wistful thinking and (they) don’t want to commit to a lower price today," he told AMM, pegging prices at between $1.20 and $1.23 per pound.

"Demand is muted and I don’t see prices going higher, only moving sideways or (getting) softer," a distributor source said. "Producers are talking the market (up)."

While suppliers agree that there is very little spot activity taking place—a third source described markets as "so quiet it’s not even funny"—they maintain the range is $1.25 to $1.30 per pound.

"It’s pretty quiet to be honest. Most people are covered. There’s not a whole lot of stuff going on," a supplier source said. "But at the same time, I don’t think there is anything less than $1.25 out there. The stuff we’re selling, for three- or five-tonne truckloads, is at $1.30 (per pound)."

"For us it’s quiet. We’ve done our business for the year, with only a small amount of small spot deals," a second supplier source said, agreeing with the $1.30-per-pound number.

While robust automotive demand will undoubtedly boost silicon business eventually, it has not necessarily happened yet due to high scrap availability in the Midwest, he said. "Keep your eye on the availability of scrap car wheels. Car wheels have 8 percent silicon. If there are a lot of scrap car wheels available, then people will use (them and buy) less silicon."

Silicon business will almost certainly pick up once Chinese buyers enter the aluminum scrap market, he added.

However, for the moment participants expect spot silicon business to remain lackluster in the near term.

"I think it’s going to be a ‘wait-and-see attitude’ over the next three to four weeks," the consumer source said.

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