**Abstract**
After a period of "recession tide" last year, polysilicon manufacturers who had been relatively quiet for a long time are now preparing for a new wave of production resumption. The rising prices of polysilicon and China's ongoing "double-reverse" investigation into imported polysilicon have become key drivers behind this resurgence.
Following the downturn in 2012, many polysilicon producers are now looking to restart operations. According to insiders, companies with domestic production capacities exceeding 3,000 tons are planning to resume operations by the end of April. Major players such as China Silicon High-Tech, Savi LDK, and Sichuan Ruineng are among those planning to restart their facilities. Yan Dazhong, a deputy general manager at China Silicon High-Tech, stated that the company aims to resume 6,000 tons of production capacity by the end of April.
The ongoing "double-reverse" investigation by China into polysilicon imports from Europe, the U.S., and South Korea is seen as a potential opportunity for domestic manufacturers. Many local firms believe that the investigation could help them gain a competitive edge against foreign competitors. However, the delay in the preliminary ruling of the Ministry of Commerce, originally scheduled for early April but postponed to late June, has created uncertainty. This delay has forced some smaller plants to hold off on restarting operations for an additional two months.
In September 2012, China Silicon High-Tech made the difficult decision to halt production. At the time, its annual production capacity reached 10,300 tons, ranking it second only to GCL-Poly. The shutdown was primarily due to low market prices and intense competition. In fact, according to the China Photovoltaic Industry Alliance, over 90% of Chinese polysilicon companies were forced to suspend operations in 2012.
As 2013 began, polysilicon prices started to rise, signaling a potential recovery. Data from the China Nonferrous Metals Industry Association showed that the price of polysilicon increased from 115,000 yuan/ton at the end of 2012 to 142,600 yuan/ton in March 2013—a 24% increase. This upward trend has encouraged several companies to consider resuming operations.
Zhai Xingxue, CEO of LDK, noted that the rising cost of polysilicon may eventually lead to lower downstream prices. Recently, LDK announced a hiring plan for 1,200 employees, which many see as a sign of upcoming production resumption. Another factor driving the industry’s return is the upcoming "double-reverse" investigation into imported polysilicon, expected to be launched in early April.
Despite the challenges, Chinese polysilicon companies are cautiously optimistic. While domestic manufacturing costs are about $10/kg higher than those of foreign producers, the imposition of higher anti-dumping and countervailing duties could help close this gap. This has prompted large-scale producers like China Silicon High-Tech to begin preparations for resumption.
Sichuan Ruineng, a subsidiary of UK-based Renesola Ltd, is also planning to resume production in April. If both of its production lines are fully restored, the company expects to reach 10,000 tons/year in output.
However, not all companies are able to resume immediately. Many small and medium-sized manufacturers are delaying their plans due to the postponement of the Ministry of Commerce’s preliminary ruling. A mid-sized company executive explained that the uncertainty surrounding the investigation has forced them to wait for more clarity before making any decisions.
The Chinese Ministry of Commerce initially launched an anti-dumping investigation into polysilicon imports from the U.S. and South Korea in July 2012, with the investigation period running through June 2012. The findings revealed that these countries were dumping large quantities of polysilicon into the Chinese market at prices far below the cost of domestic producers.
According to data from February 2023, imported polysilicon from South Korea, the U.S., and Germany accounted for 87.5% of total imports. The average import price was around $17.7/kg, significantly lower than the domestic cost of over $30/kg. This has continued to pressure domestic producers, even as they prepare for a possible resumption.
GCL-Poly executives admit that even if they resume production in June, it will still be challenging to achieve good profit margins. The current situation remains tough, with low-cost imports continuing to flood the market.
In addition to the import issue, the recent reduction in on-grid tariffs for photovoltaic power has further dampened enthusiasm in the solar industry. The National Development and Reform Commission proposed a new pricing policy in January 2023, which lowered the on-grid tariff for large-scale ground-based solar projects. This has affected the entire supply chain, reducing demand for upstream materials like polysilicon.
Looking ahead, the EU is expected to announce its preliminary ruling on Chinese solar cell products in June, while China will also release its own preliminary results on imported polysilicon. These developments could provide much-needed relief to domestic producers, but they may also create short-term challenges for downstream companies that rely heavily on European markets.
While the industry is showing signs of recovery, the road to full recovery remains uncertain. With overcapacity and pricing pressures still present, the future of the polysilicon sector depends on how effectively these challenges can be addressed.
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