REC Silicon said it has no imminent plans to shutter its Moses Lake, Washington facility, contrary to a letter Washington and Montana legislators sent to President Trump and other administration members on Friday. The letter stated that impacts of the U.S.-China trade dispute would force the plant to close at the end of September.
The company did say tariffs continue to represent an existential threat. Francine Sullivan, REC’s vice president of business development, said a board meeting this week discussed a working plan for the plant’s future. Though Sullivan declined to share specifics on a timeline, she said the plant would continue functioning through the end of this quarter. REC also said the next two months will be crucial in assessing how much longer the facility can function at its current 25 percent capacity.
“The lawmakers got a little bit ahead of themselves,” said Sullivan on the sidelines of the Solar Power International conference in Anaheim, California. “There is no decision to shut down, but we have a very uncertain future.”
REC, one of three U.S.-based polysilicon manufacturers, laid off 40 percent of its workforce in July, on top of hundreds of layoffs since 2011. Chinese tariffs on polysilicon have locked the company out of that market since 2014, leaving it reliant on demand from Taiwan and other global markets.
Falling polysilicon prices haven’t helped. According to Jade Jones, a senior solar analyst at Wood Mackenzie Power & Renewables, the industry hasn’t seen such drastic price drops on a quarterly basis since 2011 because of a global glut across the supply chain. WoodMac doesn’t forecast any price spikes in 2018.
“It’s a tough market right now,” said Jones. “Despite high tariffs, [U.S. manufacturers] have held on for a really long time.”
While the administration recently granted some solar products an exclusion from Section 201 tariffs, polysilicon is still waiting for a resolution of its trade concerns.
Sullivan said REC is interested in some type of tariff relief in the meantime, akin to what has been offered to the U.S. agriculture industry. She said the letter from lawmakers is part of a larger push to get the administration’s attention in a “very noisy trade environment.”
“We’re doing what we can, we’re struggling, we’re scraping around,” said Sullivan. “We’re chasing everything we can to try to survive.”
The U.S. Chamber of Commerce estimated this summer that should the administration provide help across all industries impacted by tariffs, it could cost nearly $39 billion.
The latest round of tariffs from China also impacts REC’s facility in Montana, which supplies the semiconductor market. Though Sullivan said the company is coping with those “smallish” tariffs, she said the latest moves from both China and the U.S. indicate the administration is gearing up for one of Trump's favorite activities: making deals.
“He’s sizing up for a trade negotiation. We’re not putting our hope in that solving things, but there is something brewing,” she said. “We need to be on their priority list. We need to be on their must-fix list.”
The company is also investigating other potential points of relief. As Greentech Media previously reported, REC is eyeing growing demand for silicon and silane gas from the battery industry. While that demand isn’t enough to make up for the losses at Moses Lake, Sullivan said it does present promise.
“It’s the timing,” said Sullivan. “It’s a bright spot on the horizon for us, but we need to get through the next few years.”
REC is also continuing to ramp its joint venture in China with Shaanxi Non-Ferrous Tian Hong New Energy, though Sullivan said any money from that project won’t be in hand for a couple years.
“We’re still going,” she said.
Though the letter from legislators caused angst, Sullivan added it remains a “wait-and-see situation.”
“Everyone knows we’re in danger,” she said.
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