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					</table>Polysilicon imports into China dropped 28.5% in 2023 to 62,965 metric tons (MT), the lowest level since 2011, according to Germany-based polysilicon market research firm <a href="https://www.bernreuter.com/" target="_blank" rel="noopener">Bernreuter</a>. Polysilicon is a key material for making solar cells and semiconductors.
<img loading="lazy" decoding="async" class="alignnone wp-image-63915 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/03/2024-02-28-polysilicon-imports-into-china-2018-2023.jpg" alt="2024-02-28-polysilicon-imports-into-china-2018-2023" width="1024" height="536" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/03/2024-02-28-polysilicon-imports-into-china-2018-2023.jpg 1024w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/03/2024-02-28-polysilicon-imports-into-china-2018-2023-300x157.jpg 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/03/2024-02-28-polysilicon-imports-into-china-2018-2023-768x402.jpg 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/03/2024-02-28-polysilicon-imports-into-china-2018-2023-650x340.jpg 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/03/2024-02-28-polysilicon-imports-into-china-2018-2023-624x327.jpg 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/03/2024-02-28-polysilicon-imports-into-china-2018-2023-600x314.jpg 600w" sizes="(max-width: 1024px) 100vw, 1024px" />
The report also says that major foreign suppliers like <a href="https://www.wacker.com/cms/en-us/home/home.html" target="_blank" rel="noopener">Wacker</a>, <a href="https://www.hscpoly.com/about/" target="_blank" rel="noopener">Hemlock Semiconductor</a>, and <a href="https://ocim.com.my/" target="_blank" rel="noopener">OCI Malaysia</a> are shifting shipments from China to Vietnam after U.S. regulations aimed at preventing imports of goods linked to forced labor in Xinjiang came into force.
To avoid the regulations, big Chinese solar module makers like <a href="https://www.jasolar.com/html/en/" target="_blank" rel="noopener">JA Solar</a>, <a href="https://www.jinkosolar.com/" target="_blank" rel="noopener">JinkoSolar</a>, and <a href="https://www.trinasolar.com/us" target="_blank" rel="noopener">Trina Solar</a> have already opened wafer plants in Vietnam and are sourcing polysilicon from non-Chinese suppliers.
JA Solar began making wafers in Vietnam in 2018-19, starting with 1.5 GW yearly capacity. By the first half of 2023, they increased it to 4 GW. JinkoSolar built a 7 GW wafer plant in early 2022, and Trina Solar opened a 6.5 GW wafer factory in August 2023.
According to Bernreuter, manufacturing wafers outside China makes it easier for companies to show the U.S. Customs and Border Protection (CBP) agency that polysilicon from Xinjiang has not entered the supply chain of modules destined for the U.S.
However, a surge in polysilicon exports from China to Vietnam in 2023 raised concerns that these supply chains may not be as separate as claimed. Polysilicon exports from China to Vietnam soared from 639 MT in 2022 to 4,970 MT in 2023.
“That raises doubts about the claims of a separate supply chain and should sound alarm bells at the CBP,” said Johannes Bernreuter, head of the polysilicon market Bernreuter Research.
Overall, polysilicon imports into China from the U.S., Japan, South Korea, and Taiwan plunged in 2023 as temporary supply deals expired. Germany&#8217;s Wacker and Malaysia&#8217;s OCI now account for 98% of Chinese polysilicon imports.
Bernreuter predicts polysilicon imports into China could drop another 40% this year to around 38,000 MT as major solar manufacturers focus on wafer production in Vietnam instead.
Earlier this month, India’s Directorate General of Trade Remedies (DGTR) <a href="https://www.mercomindia.com/dgtr-anti-dumping-probe-solar-glass" target="_blank" rel="noopener">initiated</a> an anti-dumping investigation on imports of textured tempered coated and uncoated glass originating in or exported from China and Vietnam.
DGTR also <a href="https://www.mercomindia.com/dgtr-extension-anti-dumping-duty-eva-backsheets" target="_blank" rel="noopener">recommended</a> the extension of anti-dumping duty on the imports of Ethylene Vinyl Acetate (EVA) backsheets originating in or exported from China for five years. It found that EVA backsheets continue to be exported to India at prices below the normal value, resulting in their dumping.

Polysilicon Imports into China Drop as Manufacturers Shift to Vietnam

A massive explosion was reported at a polysilicon factory in the city of Shihezi in China’s Xinjiang region. The plant produces raw materials for polysilicon used in the production of solar modules.
The factory belongs to the <a href="http://www.hoshinesilicon.com/index_en.aspx" target="_blank" rel="noopener">Hoshine Silicon Industry</a>, which stated that the fire broke out at the second phase trial production line at the finished product packaging workshop of the sealing plant.
In a notification to the Shanghai Stock Exchange, the company stated that the gutted portion did not house the raw material production unit, which goes into making polysilicon. The company has claimed that the mishap has had no major impact on the company’s production and operation.
According to Hoshine, the fire has been extinguished, and no casualties have been reported. An on-site inspection has been conducted, and the pollutants are mainly particulate matter and not toxic or harmful gas. The company has stated that environmental protection departments continue to monitor air quality to ensure that no secondary disasters occur.
China’s Xinjiang region houses several major manufacturing facilities integral to the polysilicon supply chain, as the region provides 40% of the world’s polysilicon. These include Hoshine and other manufacturers of finished polysilicon, such as <a href="http://www.dqsolar.com/" target="_blank" rel="noopener">Daqo New Energy</a>, <a href="http://www.gcl-poly.com.hk/en/" target="_blank" rel="noopener">GCL-Poly Energy Holdings</a>, <a href="https://www.bloomberg.com/profile/company/EHGCLZ:CH" target="_blank" rel="noopener">East Hope Group</a>, and <a href="https://www.xinteenergy.com/en/" target="_blank" rel="noopener">Xinte Energy</a>.
According to Chinese media reports, Hoshine supplies raw materials to both Daqo and GCL-Poly.
In July 2020, an <a href="https://mercomindia.com/polysilicon-prices-rise-explosions-production-facility/" target="_blank" rel="noopener">explosion</a> at GCL’s Xinjiang production facility saw the prices of polysilicon skyrocket globally. The explosions have resulted in about 50 MT of polysilicon production capacity going offline, around 10% of the global production capacity.
GCL had <a href="https://mercomindia.com/gcl-poly-warns-shareholders-huge-losses-in-1h-2020/" target="_blank" rel="noopener">warned</a> its shareholders to expect losses to the tune of RMB 1.5 billion (~$217 million) in the first half of 2020. The total net loss for the first half of 2020 (unaudited) was RMB 1,924 million (~$281.8 million).
A small fire was also reported at Daqo’s polysilicon plant on July 1, 2020, affecting a production capacity of 6,000 MT. Similarly, heavy flooding in South-eastern China forced <a href="http://en.tongwei.com/" target="_blank" rel="noopener">Tongwei Group</a> to shut down a quarter of its polycrystalline silicon unit.
The solar industry is already experiencing polysilicon shortages, and the average spot prices have increased exponentially over the past 12 months.
<a href="https://mercomindia.com/wp-content/uploads/2021/06/Average-Monthly-Polysilicon-Spot-Prices-in-China-Taiwan-in-2021.png"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-26889" src="https://mercomindia.com/wp-content/uploads/2021/06/Average-Monthly-Polysilicon-Spot-Prices-in-China-Taiwan-in-2021.png" alt="Average Monthly Polysilicon Spot Prices in China Taiwan in 2021" width="538" height="375" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2021/06/Average-Monthly-Polysilicon-Spot-Prices-in-China-Taiwan-in-2021.png 538w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2021/06/Average-Monthly-Polysilicon-Spot-Prices-in-China-Taiwan-in-2021-300x209.png 300w" sizes="(max-width: 538px) 100vw, 538px" /></a>
With the latest explosion, speculation is rife that the polysilicon prices will spike, increasing project costs. However, based on the initial statement by Hoshine, the impact of this explosion could have minimal effect on polysilicon prices and supply. We will continue to monitor this development closely.

Explosion at Hoshine Silicon’s Polysilicon Plant in China Threatens Supply

China-based <a href="http://www.dqsolar.com/" target="_blank" rel="noopener noreferrer">Daqo New Energy Corporation</a> announced that its gross profit stood at $45.3 million in the third quarter or 2020 (Q3 2020), up over 150% from $18.1 million in the same quarter last year, according to its Q3 2020 earnings statement.
Gross profits were also up over 99% from $22.7 million in the previous quarter. Gross margins rose to 36% in Q3 2020, up from 21.5% in the same quarter last year and 17% in Q2 2020, primarily due to improvements in production costs and a higher average selling price (ASP).
However, the company’s revenue was down about 6% at $125.5 million in Q3 2020, from $133.5 million in the previous quarter due to lower polysilicon sales volumes despite higher ASP.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) during the quarter stood at $51.6 million, up almost 162% from $19.7 million in the same quarter last year and up nearly 93% from $26.8 million in Q2 2020.
Daqo, primarily a solar photovoltaic (PV) grade polysilicon manufacturer, said it produced about 18,406 metric tons (MT) of polysilicon in Q3 2020, up slightly from 18,097 MT in the previous quarter. It sold about 13,643 MT of this during the quarter. In the previous quarter, it sold 18,881 MT.
It said that it completed the annual maintenance and multiple technology improvement projects at its polysilicon manufacturing facilities and resumed full production in August.
“As our facilities are now running with increased efficiency, we expected to achieve a higher production volume of approximately 19,500 MT to 20,500 MT in the fourth quarter, with a potential cost reduction by approximately 3%, as compared to the third quarter,” said Daqo Chief Executive Officer, Longgen Zhang.
“With robust market demand for mono-grade polysilicon, we expect our ASP to improve meaningfully in the fourth quarter as compared to the third quarter,” Zhang added.
The company also said that it expects to produce about 75,800 MT to 76,800 MT of polysilicon in 2020 as a whole after factoring in the impact of the company’s annual facility maintenance.
“(Daqo) delivered close to inline Q3 results and provided soft Q4 guidance. The fundamentals for the company appear to be robust nearly across the board with strong demand, an elevated pricing outlook, and an improving cost structure,” California-based investment banker ROTH Capital Partner said in a research note.
“We see the China carve-out listing as a meaningful positive catalyst for the stock. Despite this, we maintain our neutral on the policy risks regarding Xinjiang forced labor issues,” the note added.
In September, Daqo <a href="https://mercomindia.com/daqo-new-energy-to-invest/" target="_blank" rel="noopener noreferrer">revealed</a> plans to raise $732 million (~$53.7 billion) for new polysilicon manufacturing facilities and working capital requirements. It also said its application to get its subsidiary Xinjiang Daqo New Energy Company Limited enlisted in the Shanghai Stock Exchange for an initial public offering (IPO) had been received by the exchange.
In July, Mercom <a href="https://mercomindia.com/polysilicon-prices-rise-explosions-production-facility/" target="_blank" rel="noopener noreferrer">reported</a> that polysilicon prices were expected to climb higher spiked following an explosion at GCL’s Xinjiang production facility. The explosions resulted in about 50 MT polysilicon production capacity being taken offline. This was over 10% of the global production capacity at the time.

China’s Solar Polysilicon Manufacturer Daqo Reports 150% Rise in Gross Profit in Q3 2020

Chinese solar photovoltaic (PV) grade polysilicon manufacturer <a href="http://www.dqsolar.com/" target="_blank" rel="noopener noreferrer">Daqo New Energy Corporation</a> has revealed plans to raise $732 million (~₹53.7 billion) for new polysilicon manufacturing facilities and working capital requirements.
In its press statement, the company said that its application to get its subsidiary Xinjiang Daqo New Energy Company Limited enlisted in the Shanghai Stock Exchange for an initial public offering (IPO) has been received by the exchange.
It added that it intends to use the proceeds from the IPO to set up a phase 4B ultra-high-purity polysilicon manufacturing facility for monocrystalline solar PV wafer applications with an annual production capacity of 35,000 metric tons (MT). This project is expected to cost about $514 million (~₹37.7 billion). Polysilicon is an essential raw material in solar cells.
Additionally, the company plans to set up a semi-grade ultra-high-purity polysilicon facility for semiconductor wafer applications with an annual capacity of 1,000 MT. This is expected to cost $62 million (~₹4.5 billion).
Separately, Daqo also said it plans to garner $156 million (~₹11.4 billion) in working capital to optimize debt structure, enhance research and development, and fund business development projects.
To raise these funds, Daqo, which owns around 95.6% of Xinjiang Daqo’s shares, would issue 286,764,706 shares – about 15% of its total share capital after the offering. Following the IPO, the company’s stake in its subsidiary would stand at around 81.3%.
According to a research report published by California-based investment banker ROTH Capital Partners, this move could help the company bring in low-cost capital that can then be used to add manufacturing capacity and increase earnings power.
ROTH also believes that production at the facility for monocrystalline solar wafer could start ramping in the first quarter of 2022 (Q1 2022) and be fully operational by the second quarter of the year (Q2 2022).
Recently, Jiangsu Zhongneng Polysilicon, a subsidiary of Chinese major GCL-Poly Energy Holdings, <a href="https://mercomindia.com/gcl-poly-begins-construction-polysilicon-facility/" target="_blank" rel="noopener noreferrer">announced</a> the groundbreaking of the first phase of its 54,000 MT polysilicon manufacturing facility using a recently acquired fluidized bed reactor, the company said in a recent statement.
In July, Mercom <a href="https://mercomindia.com/polysilicon-prices-rise-explosions-production-facility/" target="_blank" rel="noopener noreferrer">reported</a> prices of polysilicon were expected to spike following an explosion at GCL’s Xinjiang production facility. The explosions were said to have left about 50 metric tons of polysilicon production capacity offline. This amounted to over 10% of the global production capacity at the time.
Image credit: Warut Roonguthai / CC BY-SA (<a href="https://upload.wikimedia.org/wikipedia/commons/5/59/Polycrystalline_silicon_rod.jpg" target="_blank" rel="noopener noreferrer">3.0</a>)

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