New York (Platts)--13Jul2007

US silicon prices appear to be heading for above $1/lb due to the
strength in demand from the chemicals and semi-conductor sector, despite poor
metallurgical demand.
     Producers and suppliers note that there is little in the way of imported
material coming into the US that is not already committed on long-term supply
contracts. Meanwhile, a metallurgical consumer told Platts that it was finding
it hard to obtain offers for prompt truckload material.
     One consumer made an inquiry for a prompt truckload of silicon and had
yet to receive an offer. "I can't get any offers and I'm looking for a prompt
truckload right now, but nobody is returning my calls. I fear it may be over
$1." Last month, the same consumer paid 97 cents/lb, delivered Midwest.
     Meanwhile, a supplier said that he had offered material as high as $1.05
FOB warehouse but had yet to be booked. He also claimed to have been booked
for a prompt truckload at $1.01, but the report of the business came after
Platts assessed the market on Wednesday. The supplier said that despite not
being offered at $1.05, he had another outstanding offer at $1.05 and said he
expected to be booked somewhere between $1.01 and $1.05/lb FOB. He said that,
depending on destination, freight would be 1.5 to 2 cents/lb.
     A metallurgical consumer conceded that chemical demand for silicon had
been exceptionally strong, but declined to say where prices were. However, a
secondary aluminum producer told Platts that he was raising his price for A380
alloy to $1.07/lb delivered from $1.06 because silicon prices had risen above
$1./lb.
     Several purchasing agents at secondary aluminum producers were absent
this week as plants were closed for maintenance.
     Spot market activity has remained quiet in silicon, which is not unusual
for the time of the year, as the bulk of the business is on long-term formula
contracts. However, the market is likely to heat up again later in the year,
when the major consumers and suppliers turn their attention to negotiating
2008 supply contracts.
     On Wednesday, the Platts assessment for silicon in the US market
(0.35-0.50%) was unchanged, at 97-98 cents/lb delivered. The Platts database
goes back to October 22, 1975 and prices are now at their highest level since
June 12, 1996, when the range was 93-98 cents/lb.
--Anthony Poole, anthony_poole@platts.com