New York (Platts)--20Jun2008

Silicon prices remained stable in the US this week, even as some
consumers braced themselves for a squeeze on material following news that the
country's largest silicon producer, Globe Metallurgical, will convert silicon
production from a furnace at its Beverly , Ohio plant to ferrosilion output.

A source close to Globe said June 11 that ferrosilicon production would
start this week and that it the company already had customers lined up to take
material. But the decision didn't have an immediate material impact on the US
silicon market, as demand on the spot market remains very quiet.

The Platts assessment for silicon metal in the US remained at
$1.63-$1.70/lb, delivered.

One US producer said he sold "multiple" truckloads between $1.65 and
$1.68 delivered, adding that Globe's action could bring supply and demand back
into balance.

"The spot business is not really related to Globe," he said. "It's hard
to say on silicon. Demand from the secondary industry is not great but at the
same time with Globe switching furnaces it will take out over a thousand tons
a month of production. There is a supply overhang right now but if they do
this for three months then it will put the market back in pretty good
balance."

Some said that Globe's conversion had consumers fearing a tighter supply
scenario and higher prices and holding tight to their existing material,
noting that the reselling trend had come to a halt.

One consumer was expecting higher numbers following Globe's furnace
switch -- but not for a couple of months.

"No one is out there grumbling, where they are expecting prices to go up
because of Globe," he said. "Most consumers are expecting to see a price
increase but I can't confirm anything so far. The rumor is, though, prepare
for it -- hold onto your seat and prepare for it."

He continued that in the short term, lower output from Globe would mean
little as demand from end-use sector remains soft.

A pair of sources said the impact was purely psychological, as the US
market was overrun with silicon supply.

--Meghann McDonell, meghann_mcdonell@platts.com