Now that Dow Corning was successful in getting the EU to consider dividing the silicon market up according to end use, via the aluminum content, the question is whether the US government has been asked to reconsider its policy to treat silicon as one commodity?
The argument is old—the silicon consumers, chemical manufacturers and aluminum producers, are wildly different. While there is some overlap in the quality of silicon they purchase, how they buy is quite dissimilar. The aluminum buyers reply on a variety of pricing mechanism, i.e., spot, quarterly and annual, while the chemical buyers look for long-term, i.e., at least annual contracts. And, since the chemical buyers are not spot buyers, their prices are not reflected in the indexes.
“A 5-mt sale to a secondary aluminum producer could affect a 5,000 mt shipment to a chemical producer,” one seller said. “They are not represented in the pricing indexes. Still, using the indexes for pricing was their decision.”