The China government is likely to levy punitive tariffs on polysilicon makers from Europe, the US and South Korea in the first quarter of 2013. Recently, domestic material makers have been aiming for a price increase. Market observers believe if international material firms are blocked from entering the China market, the firms will dump supplies on non-China markets, meaning downstream customers could benefit from cheaper materials. However, industry sources pointed out that companies are unlikely to continue lowering prices to obtain customers because the current spot price of polysilicon is below the variable cost of many material firms.
According to China-based material firms, the top-four polysilicon firms in the world are US-based Hemlock, Germany-based Wacker, South Korea-based OCI, and China-based GCL-Poly. The average variable cost of production for the four major firms is around US$16-17/kg. China is the largest market for polysilicon and is also the largest market for material firms from Europe, the US and South Korea.
US-based polysilicon provider Hemlock Semiconductor recently announced plans to lay off 400 employees due to decreased production and the anticipated tariffs from the China probe.
