[Ferro-alloys.com] Since July 2014, metallurgical grade Si metal prices had declined much and became basically stable in mid August 2014 in China. Editor of www.ferro-alloys.com made an analysis of silicon metal price changes in terms of supply and demand.

As for production and supply, output began to improve with the occurrence of high-water season when unit power price was lower than other period in China’s southern provinces. For instance, the overall operation rate rose to 60% in China’s Yunnan province in high-water season. Si metal prices began to rise in May 2014, which brought nice situation of busy production and high prices, while the reduction of production cost seemed a sign of later declining prices in July 2014.

In terms of demand, the consumption of Chinese Si metals was almost halved between China and other countries. China Customs statistics showed exports of Chinese Si metals began to increase from March 2014. The surging exports could be considered much improved demand from abroad, which enabled Chinese Si metal producers to much raise their operation rate and enjoy continuous high prices. Quickly added output indicated the potential for later declining prices.

Since July 2014, the demand had begun to become steady and foreign dealers reduced orders. Facing the high inventory, power bills and other expenditures, Chinese Si metal producers lowered their quotations, especially metallurgical grade Si metals.

As usual, Si metal consumers would basically use up their stocks and purchase activity would become common again. Si metal producers adjusted product structure in July and August 2014 to make the supply meet the demand.

Some ferroalloy producers shifted other products to production of SI Metals. We advised they not be rash about this behavior. Hot sales and high prices of certain product indicated output and supply were on the increase, which could hold risks for later slumping prices.

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• [Editor:Yueleilei]