China’s Extension of U.S. Solar-Grade Polysilicon Duties and the Phase 1 Trade Agreement
- Fornebu, Norway
On January 19, 2020 the Ministry of Commerce of the People’s Republic of China (MOFCOM) has announced that it would extend tariffs on imports of solar-grade polysilicon from the United States and South Korea for a further 5 years, effective from January 20, 2020.
This announcement was anticipated by the Government of the United States (USG) and REC Silicon, as it was made by MOFCOM pursuant to an on-going review procedure with a pre-determined schedule.
In a press release from REC's headquarters in Norway,
We do not expect this announcement from MOFCOM to affect or change China’s commitment to purchase solar-grade polysilicon from the United States under the terms of the Phase 1 Trade Agreement between the USG and the Government of China (China), that was concluded on January 15, 2020.
Shares in polysilicon producer REC Silicon jumped by 65 per cent on Thursday after China agreed to buy more US supplies of the solar panel material as part of the countries’ “phase-one” trade deal. Beijing agreed to buy an additional $77.7bn of manufactured goods from the US over the next two years as part of the deal signed at the White House on Wednesday. That includes purchases of US polysilicon, the agreement said — a potential boost for Norway- headquartered REC, which has two plants in the US.
“It is really positive that the US government has recognised the importance of the US polysilicon industry. Being locked out of the global market for polysilicon for the last several years has cost the US high-paying jobs and billions of dollars in investment,” Tore Torvund, chief executive of REC Silicon, said.
The trade deal could mark a turnround for the industry following years of rapid expansion of capacity in China that has caused polysilicon prices to fall by over 60 per cent over the past five years. Polysilicon is a critical material for solar panels and semiconductors. China accounts for over 92 per cent of global polysilicon demand because of dominance in solar panel production. In 2014, China imposed tariffs on US solar-grade polysilicon.
That forced REC to close the $1.7bn polysilicon plant here in Moses Lake last July and lay off 450 workers, it said. The trade deal could eventually lead to a recovery in the market, especially as older coal-fired Chinese capacity closes, said Francine Sullivan, vice-president at REC Silicon, adding that it might be possible to reopen the Moses Lake plant.
REC Silicon of Norway thanked the USG, and U.S. Trade Representative Ambassador Lighthizer and his negotiating team at the Office of the United States Trade Representative (USTR), for prioritizing the interests of the U.S. polysilicon industry in this important trade agreement, and securing this purchases commitment from China. REC Silicon looks forward to working closely with USTR in relation to the execution of the Phase 1 Trade Agreement and the fulfillment of China’s solar-grade polysilicon purchases commitment.