Japan Secondary Al Makers Start Silicon Metal Price Talks for Jul-Sep

Japanese major secondary aluminium alloy makers, including Daiki Aluminium Industry, Nikkei MC Aluminium and Summit Showa Aluminum, started price negotiations for silicon metal #553 shipped in July-September with Chinese suppliers. Secondary aluminium alloy makers use silicon metal as an additive. Chinese producers presently offer CIF US$ 2,040-2,100 per tonne against Japanese consumers. The offer price is lower by about US$ 200 (8%) than the yearly highest in April.

The market price turned down in mid May and continued to lower. Japanese trader source who visited China in early June said hydropower supply largely improved in Guizhou, Sichuan and Yunnan Provinces, where many silicon metal refineries are located, when low water season ended in mid May. Major refineries’ outputs turned upward consequently.

Summit Showa plans spot silicon metal procurement for July-September though the firm concluded quarterly contracts for April-June. The firm aims spot purchase when Chinese offer price gap is recently widening and short in supply has eased. Meanwhile, Daiki and Nikkei MC will keep procurement based on quarterly contracts. The alloy makers are likely to purchase silicon metal almost as much as in April-June since alloy production volume is expected to keep the current level.