REC Silicon blames China trade dispute for suppressed Q3 revenue, job losses


Norway’s REC Silicon has today announced that 70 jobs are to be cut in the U.S. following a difficult third quarter (Q3) in which revenues fell to $50.9 million, down from $71.1 million in the second quarter.

The polysilicon producer pulled no punches when explaining the reasons behind the revenue contraction, stating that the "ongoing solar trade war between the U.S. and China" continues to restrict the firm’s access to polysilicon markets in China.

Another main driver for the reduced revenues is the continued disruption of the solar grade polysilicon market, which has been exacerbated by the expiration of the 2015 FIT in China. This has negatively affected the entire value chain and largely explains why REC Silicon posted Q3 EBITDA at minus $7.9 million.

Earlier this year REC Silicon was forced to shut down its remaining Fluidized Bed Reactor (FBR) polysilicon production lines in Washington, having earlier severely scaled back production of the technology. Capacity utilization at the site is now just 50%.

Now, further cost-cutting measures are afoot, not least the 70 job loses confirmed at Washington’s Moses Lake facility.

"We have been successful in maintaining sufficient liquidity during this period of market disruption," said REC Silicon CEO Tore Torvund. "Because of our efforts to control costs, I expect REC Silicon to remain a low cost leader in the polysilicon industry, even at reduced prices."

However, despite such relatively naked optimism, the CEO’s additional comments cast a pall over the Q3 report. Torvund remarked that he sees no end in sight for the U.S.-China solar silicon trade row, which levies a 25% tariff on polysilicon products from U.S. producers. "It is difficult to find a solution with so many parties involved, and the U.S. election coming up. We are not very optimistic to find a solution to the trade war in the short term but we are working on it."

The CEO added that REC Silicon is planning for there "not to be a resolution" to the trade war, stressing that around 80% of the company’s market is affected.

Over Q3 REC Silicon’s polysilicon sales were 1,775 MT, which was in line with guidance given in September. Its finished goods inventory increased by 2,132 MT during Q3, with the company’s cash balance reported as $86.8 million.

Torvund said that REC Silicon’s guidance for FBR production in Q4 has been cut from 4,710 MT in July to just 2,260 MT. Polysilicon production for next quarter is also expected to fall sharply to 3,280 MT, compared to July’s projection of 5,520 MT.

Popular content

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact:


Related content

Elsewhere on pv magazine...

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.