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| Price Of Chinese Silicon Metal Rises To US$1,600 / Ton CIF As Highest In Its History |
| = Exceeding US$1,400 Recorded In 1996 As Highest |
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The price of Chinese silicon metal ( 5.5.3 grade for aluminum industry ) is rising steeply. Chinese shippers are currently offering this metal at US$1,600 per ton CIF Japan for shipments in October - December quarter of 2007, having risen by US$350 per ton compared with that contracted for shipments in July - September quarter. This price of US$1,600 CIF has certainly exceeded largely that ( US$1,400 CIF ) recorded for shipments in July - September quarter of 1996 and become the new highest one in its history. It has been thought that, among ferro-alloys, Chinese silicon metal is the commodity, delaying to rise its price, and price of Chinese silicon metal has been depressed for a long period. However, the reason, why price of Chinese silicon metal has risen to the highest one in its history after an interval of 12 years, is a sharp raise of the production cost at Chinese side. While oil coke is used as reducing agent for production of silicon metal, it can be pointed out that price of Chinese oil coke has risen to a considerable extent. Reflecting the active demand for oil coke from aluminum industry, prices of oil coke have risen to US$280 - 285 per ton FOBT for fines after sieved and US$300 per ton FOBT for normal sieved material, both of which have doubled in the last 2 - 3 months. Price of oil coke is anticipated to rise further in the near future. Fees of electric power in China have also risen. Different fees are now applied to various industries and, therefore, many industries have been obliged to use electric power at normal fee ( CNY0.4 per 1 KWH ) instead of preferential fee. For a reference, in view of the matter which cost to produce silicon metal in China is anticipated to raise for the near future, Chinese producers have shifted their position to be reluctant to sell silicon metal. Also, when many cargoes of this metal are shipped in October - December quarter, Chinese producers are necessary to supplement their stocks of this metal in order to prepare for the cutback of production to be caused by drought in winter season. Therefore, Chinese side is hesitating to sell silicon metal. The current situation of silicon metal in overseas countries has backed up producers of silicon metal. A change has appeared in the market of the USA. In view of the fact that, because of the cut supply of electric power, a possibility to declare force majeure by the US producers is enhancing more, consumers of the USA are in a hurry to purchase silicon metal and, consequently, price of this metal has risen to a level of 115 US-Cents per lb. ( US$2,500 per ton ). Brazil is one of main suppliers of silicon metal for the USA but has held long-term contracts with European customers and, accordingly, has taken a negative attitude to export silicon metal for the USA. China is the largest country to produce silicon metal in the world and, as a matter of fact, exported 300,000 tons of silicon metal in the first half ( January - June ) of 2007, having increased by 16% compared to that in the same period of 2006, but is nearly nil of export for the USA at present, because Chinese silicon metal is the object commodity to impose antidumping duties on imports into the USA. The reasons, why price of Chinese silicon metal with 5.5.3 grade had risen to the highest one ( US$1,400 CIF ) in its history for shipments in July - September quarter of 1996, were a serious decrease of the production in Norway caused by an extraordinary drought and a bullish attitude towards sales of silicon metal taken by Brazilian producers. However, at present, these two countries of Norway and Brazil have nearly nothing to put an influence on the market of silicon metal in Japan. Under the circumstances, Japan have to depend supply of silicon metal on the capacity held by China. |
| last modified : Wed 05 Sep, 2007 [10:34] |
