Chinese Silicon Metal Price Continues Soaring

Offer price for Chinese silicon metal #553 is sharply increasing. Recent spot price soared by 30% to US$ 2,100 per tonne from US$ 1,600 in January-March 2008. Chinese supply of silicon metal is tightening when some smelters stopped production due to electricity shortage caused by less water and heavy snow in winter. Silicon metal price for April-June seems to surge remarkably versus previous quarter.Chinese silicon metal price has soared up since 2007. At the beginning of 2007, the price was around US$ 1,000 per tonne for #553. Japanese users import more than 90% of their silicon metal consumption from China. Price negotiation for April-June seems to have started this week after Chinese New Year holidays ended.Silicon metal #553 is used as a sub material for secondary aluminium alloy, in which silicon metal is added at 7-8% content. Japanese secondary aluminium alloy makers are recently suffered from higher material costs and cheaper ingot selling price. Their profitability might become even worse.