Agoracom Blog

Silicon markets set to extend upward trend in September

Posted by AGORACOM-JC at 11:08 AM on Thursday, August 21st, 2014

LONDON (Metal-Pages) 20-August-14. Silicon markets in Europe and the US are expected to trend higher in the coming weeks on firm demand from the chemicals sector, while demand from the aluminium sector is expected to pick up again after the seasonal slowdown, according to industry sources this week.

Moreover, supply tightness on both markets should also buoy prices despite an increase in Chinese exports, which are subject to EU trade duties, and a shortfall in supply from Brazil, South Africa and Australia.

Exports from Brazil are seen falling further in the coming months as stocks are being used to a low level against steep domestic production cuts this year as the country battled a prolonged, widespread drought and an energy shortfall.

There have also been power shortages in South Africa.

EU producers such as Ferroatlantica have made little material available to the spot market so far this year, industry sources said, while Australia’s Simcoa has been forced to shut one of its two silicon metal furnaces for repairs.

Officials at Simcoa could not be reached for comment. Consequently, US and European prices have moved up several cents a pound and about €50 a tonne, respectively this summer. Metal-Pages last assessed prices are some €2,125/tonne and $1.44/lb on average in Europe and the US.

Tighter supply

Brazilian exports are expected to tighten in the coming months as power-restricted production starts to bite after exporters have persistently met customer orders, while also taking advantage of buoyant overseas prices. Brazilian silicon metal exports have jumped more than 5% in the first half of this year, year-on-year, to more than 70,000 tonnes. but although exports increased more than 4% in June, they fell almost 29% from the month before, according to industry data.

Brazilian exporters have also been redirecting material towards Europe as the price differential between European and American domestic prices has narrowed.

Brazilian silicon exports to Europe accounted for almost half of total overseas shipments in June, from below a quarter of the total in January this year, while Brazilian exports to the States fell to below 45%, from two-thirds of total Brazilian silicon exports in the same comparison.

-By Declan Conway in Europe ([email protected])

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