China’s cheap electricity crowds out foreign polysilicon

Polysilicon market analyst Johannes Bernreuter says China imported around 30% less polysilicon last year and cornered 80% of the global market for its domestic manufacturers, fueled by uber-low electricity prices.

“South Korea’s polysilicon industry was out-competed by Chinese producers who enjoy extremely low and subsidized electricity rates from coal-fired power plants in the western regions of Xinjiang and Inner Mongolia,” said Bernreuter, noting Korean players OCI and Hanwha exited the market a year ago, citing electricity prices.

That decision prompted the volume of South Korean polysilicon imported by China to fall from 48,881 metric tons (MT) in 2019 to just 15,331 MT last year, according to the analyst, who said Korean poly had made up more than 70,000 MT of imports by China in 2016 and 2017, before the nation’s third largest manufacturer of the commodity–Hancook Silicon–became insolvent in 2018.

OCI is still supplying the product to China, however, via its Malaysian manufacturing operation, which supplied 23% of Chinese polysilicon imports last year, according to Bernreuter.

With German manufacturer Wacker supplying 50,061 MT of polysilicon to China in 2020–despite running production at 70% capacity from May to July–Bernreuter estimates German and Malaysian-made product will account for almost 90% of China’s poly imports this year. The amount of polysilicon shipped by Wacker to China slipped last year, from 52,667 MT in 2019.

The other major change was observed in Chinese imports of U.S.-made polysilicon, which is now subject to heavy customs duties. The 9,227 MT of product moved across the Pacific in 2019 slumped to 2,659 MT last year, reflecting the shuttering of the Moses Lake facility in Washington state owned by Norwegian business REC Silicon, in July 2019.