September 2, 2009 - A new Chinese ban on imported scrap polysilicon likely dents business for foreign firms but spells relief for domestic ones, notes a Reuters report.
The report notes that as the producer of the majority (>60%) of the world's solar panels, China is a heavy consumer of the raw material silicon; as much as 30% of its intake is of the scrap variety. The new ban enacted by the government's Environment Protection Ministry is ostensibly a move to reign in chemical waste pollution produced by reused scrap poly-Si.
But it's also giving a boost to the country's fledgling silicon supplier sector, which "needs all the help it can get" as global prices sink and supplies surge, notes KK Chan of private equity firm Nature Elements Capital, quoted by the news outlet. Specific firms to benefit include GCL-Poly Energy Holdings, which recently acquired $3.4B worth of solar assets and should produce ~3,000 tons of polysilicon by year's end, the report notes. Also helped by the new rule are LDK Solar (targets ~5,000 tons by 2010), Yingli Green Energy, ReneSola, and Tongwei.
On the outside looking in are foreign suppliers who must now find other outlets for their scrap Si, including South Korea's OCI, MEMC Electronic Materials in the US, and Japan's Tokuyama. Even Taiwanese foundry giant TSMC has been nurturing a small poly-Si reclaim business.
The Reuters report notes that the ban seems to be helping solar pricing, at least somewhat -- spot pricing for poly-Si rose about 7% in August to $72 (from $65 in July).