The solar industry has been left in confusion over whether China
has started restricting imports of the solar-module material
polysilicon, with some manufacturers reporting that shipments have
been held up by customs officials and that buyers are delaying
orders.
Those companies say that China has added waste silicon to a list
of restricted imports, either as part of a deliberate move to
protect its domestic polysilicon industry or for environmental
reasons. However, other sources, including one major polysilicon
distributor, said they weren't aware of any change in Chinese
policy.
Calls to the Chinese embassy in Washington were not returned
Wednesday.
Rick Doornbos, president and chief executive of Hemlock,
Mich.-based Hemlock Semiconductor, one of the world's largest
polysilicon producers, wrote in an email to Clean Technology
Insight that "Yes, China has recently added 'waste' silicon to its
list of restricted imports." He said that the restriction applies
to "tops and tails from silicon ingot production, broken silicon
wafers, and the small fraction of polysilicon production that does
not meet quality specifications."
"We believe the driver for this was environmental concerns with
some of the procedures used by local recyclers who convert this
material into usable silicon," he said.
Doornbos said that the scrap polysilicon that is affected by the
restriction is used in about 10% of Chinese solar cell manufacture,
a relatively small and declining portion of overall production.
"We do not believe this restriction will have a significant
impact on local polysilicon prices in China (or on global prices),"
said Doornbos. He added that it won't have a material impact on
Hemlock Semiconductor.
However, Targray Technology International, a Montreal-based
supplier of pure and scrap polysilicon to solar customers in China,
started getting calls last week from customers reporting that both
scrap and virgin polysilicon shipments were being held up at
Chinese customs, said Howard Alter, director of strategic materials
at Targray, in an interview.
While the restriction doesn't include pure or virgin
polysilicon, customs officials have been holding up shipments to
sort the waste material away from the allowed material, according
to Alter.
"This is not just us," said Alter, "many Chinese customers who
are purchasing silicon have had materials stuck in customs."
Roger Wu, president of East Bright Inc., of San Jose, Calif.,
another exporter of polysilicon into China, said that his customers
based in the U.S. received notice from their China-based
headquarters to "to stop looking for the material" until the
situation clarifies.
Wu said that he heard from customers that Chinese buyers of
polysilicon scrap would now have to get a special permit to receive
deliveries.
But Targray's Alter said that his company will now have to apply
for a license with the Chinese authorities to receive an exemption
to the restriction. However, he said, the agency that issues such
licenses to all kinds of waste material importers stopped taking in
new applications in December 2008. He didn't have the name of the
agency.
Others said they weren't aware of any change or denied that any
change of policy had occurred.
Terry Kunimune, head of Burbank, Calif.-based Kunical
International, which distributes polysilicon globally, said in an
interview that he hadn't heard of any delays or of new
restrictions.
Analysts at Deutsche Bank wrote in a note on Tuesday that no new
restrictions have been applied to polysilicon scrap.
They were responding to a note from analysts at Eurasia Group, a
global political risk research and consulting firm with polysilicon
clients. Eurasia pointed to a list of restricted imports on the Web
site of The Chinese Ministry of Commerce, dated Aug. 4, which it
said included polysilicon scrap for the first time. The Deutsche
analysts said the list included only scrap silicon from integrated
circuit manufacturing, which they said has been a restricted
category for a while.
Two solar companies, Suntech Power Holdings Co. (STP) and Yingli
Green Energy Holdings Co. (YGE), said that their imports aren't
being affected.
"None of our [polysilicon] is [stuck]," said Robert Petrina,
head of Yingli Green's North American business in an email to Clean
Technology Insight. "But we have been proactive in engaging
officials at all levels to make sure that we understand the process
and are in compliance with all the regulations."
Steven Chadima, spokesman for Suntech, said in an email that the
situation hasn't affected the Wuxi, China-based company.
However, Eurasia sees a broader trend at work that it warned
could spell wider restrictions for clean-technology companies that
aim to do business in China.
"This likely portends a broader trend: Beijing will seek to
expand protections for domestic suppliers in clean technology
industries in the years ahead as these producers become
increasingly competitive. But in doing so, the leadership will be
wary of igniting a protectionist debate due to the large export
markets for many of these technologies," Eurasia analysts wrote in
a report to clients Monday.
(Dow Jones Clean Technology Insight covers news about public and
private clean-technology and alternative-energy companies.)
-By Yuliya Chernova, Dow Jones Clean Technology Insight;
Yuliya.chernova@dowjones.com