Prolonged thin trade continued to cap Chinese 553 silicon metal prices at $1,920-1,970/mt FOB China this week, unchanged from a week ago, Chinese industry sources said late Thursday. Most traders reported no spot deals this week as prices were weak.

A local trader said he had temporarily stopped exporting the material as "current prices are too low for export." He added that the company would have to sell the material at no less than $2,000/mt FOB China in order to make some profit. "But current prices are indicated at around $1,950/mt FOB China, and given such a low price level we have to suspend our export activities," the trader said. He added that there had been more smuggling activity from China with some material being exported at a low price.

The trader said that there was more smuggling from China as traders wanted to avoid the 15% export tax on silicon metal.

Another trader agreed, adding that traders were looking for ways to get around the tax in a weak market. "Most Chinese silicon metal traders are not making profits after taking into account the export tax imposed on the metal and some of them are trying to find a way out," she said.

A third trader also reported no spot deals this week. "Prices are too low and we would rather wait and see for more market direction," he said. "We are now building up our stocks rather than selling our material at lower than our cost level. I think the market will stay weak ahead of the National Day holiday in China in early October."

A fourth trader said prices were heard at $1,920-1,970/mt FOB China this week. "We haven't sold any material this week as overseas demand has been lacking. Most producers in China are operating at below full capacity in anticipation of continued weak market sentiment in the near future," he said.