Chinese Silicon Metal Offer Price Jumps by 20% Due to Power Shortage

Chinese offer price of silicon metal #553 jumped by more than $ 400 to CIF $ 2,150-2,250 per tonne in the latest month against Japanese consumers such as secondary aluminium alloy makers. Concerned sources point out the offer price has rapidly risen due to electric power charge upsurge and supply tightness in China.

Chinese offer price was around $ 1,700 for September-October with low demand while turned upward in late October. Japanese trader source said electric power has shortened in Guizhou Province, where many silicon metal refineries are located, entering low-water season of winter and power charge has widely increased. Another source points out power supply is also short for industrial sectors in Yunnan Province, even where electricity generation mainly depends on thermal plants.

At the same time, Japanese traders suppose Chinese domestic inventory of silicon metal may be rapidly decreasing with increasing demand from domestic aluminium industry. Japanese trader source said Chinese silicon metal refineries’ operating rate stays 20-30% against their capacities. The backgrounds are that demand recovery is delayed in Japan and Europe and that many refineries cannot restart operations due to electric power shortage.