Norway-based REC Silicon has announced that its wholly owned subsidiary, REC Advanced Silicon Materials LLC, is shutting down polysilicon production capacity at its facility in Butte, Montana. The plant employs about 300 people and is one of the top private employers in the region.
The manufacturer said the shutdown of the business in Butte is “primarily necessary due to the regional structural imbalance in supply and demand for electricity.” It is also said to be part of its strategy to ensure long-term profitable operations.
REC Silicon produces solar-grade polysilicon at its facility in Moses Lake, Washington, and electronics-grade polysilicon and silicon gas at its factory in Butte, Montana. The plants have an annual production capacity of more than 20,000 metric tons (MT) of polysilicon.
The company's Washington facility restarted production in November 2023 after five years of idleness and following a 10-year take-or-pay supply agreement for high-purity fluidized bed reactor (FBR) granular polysilicon with Hanwha Q Cells, announced last September.
“Discontinuing the polysilicon production at Butte will significantly reduce annual energy consumption and operating costs,” the company said in press release this week.
The polysilicon business will continue to produce for approximately six to nine months to fulfill polysilicon supply obligations to the customers, said REC Silicon. After the supply obligations are satisfied, the company expects that the workforce in Butte will be reduced accordingly. Further details are to be announced.
“The decision to shut down the polysilicon business in Butte was very difficult from a human perspective because of the impact on REC’s workforce,” said Kurt Levens, REC Silicon's CEO. “We did everything in our power to return profitability to the polysilicon business in Butte, however, forecasts for sustained high electricity costs that are outside of our control necessitated this decision.”
According to the manufacturer, short- and mid-term increases in electricity pricing in the region is not expected to abate and will not allow for profitable operations in the polysilicon business line.
The company took short-term mitigative measures that included electricity hedging, optimized production, and increased sales prices. These efforts minimized the losses in the short term, but “the decision taken is primarily about the mid- to long-term viability of a very power-intensive polysilicon process located in a high electricity cost region, particularly relative to alternative manufacturers and regions,” said REC Silicon.
Polysilicon prices have been in free fall amid a growing supply glut, and manufacturers have struggled to turn a profit. In its recent market update for pv magazine, OPIS, a Dow Jones company, said that polysilicon prices in China fell to CNY 60.25 ($8.40)/kg on Jan. 16, down 51.8% year on year.
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