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As solar panels pile up, China takes axe to polysilicon producers
Three quarters of China's solar-grade polysilicon producers face closure as Beijing looks to overhaul a bloated and inefficient industry, resulting in fewer but better companies to compete against Germany's Wacker Chemie AG and South Korea's OCI Co Ltd.
The polysilicon sector, which has around 40 companies employing 30,000 people and has received investment of 100 billion yuan ($16 billion), suffers from low quality and chronic over-capacity as local governments poured in money to feed a fast-growing solar panel industry, for which polysilicon is a key feedstock.
Demand for solar panels has eased since the global financial crisis, forcing governments worldwide to slash solar power subsidies, and leaving China sitting on idle capacity and mounting losses. To help prop up the solar industry, Beijing plans to more than quadruple solar power generating capacity to 35 gigawatts (GW) by 2015 to use up some of the huge domestic panel glut. It has also said it will accelerate technological upgrades in polysilicon to weed out inefficient producers and "nurture a batch of internationally competitive producers."
People in the polysilicon industry say the moves will halve China's production capacity to 100,000 metric tons (110231 tons) a year, leaving around 10 relatively strong firms with better technology and cost efficiency. "Most producers will be eliminated rather than acquired. This may sound cruel, but is the reality as they are technologically uncompetitive," Lu Jinbiao, a senior official at China's top polysilicon producer GCL-Poly Energy, told Reuters.
http://news.yahoo.com/solar-panels-pile-china-takes-axe-polysilicon-producers-210746815.html
The polysilicon sector, which has around 40 companies employing 30,000 people and has received investment of 100 billion yuan ($16 billion), suffers from low quality and chronic over-capacity as local governments poured in money to feed a fast-growing solar panel industry, for which polysilicon is a key feedstock.
Demand for solar panels has eased since the global financial crisis, forcing governments worldwide to slash solar power subsidies, and leaving China sitting on idle capacity and mounting losses. To help prop up the solar industry, Beijing plans to more than quadruple solar power generating capacity to 35 gigawatts (GW) by 2015 to use up some of the huge domestic panel glut. It has also said it will accelerate technological upgrades in polysilicon to weed out inefficient producers and "nurture a batch of internationally competitive producers."
People in the polysilicon industry say the moves will halve China's production capacity to 100,000 metric tons (110231 tons) a year, leaving around 10 relatively strong firms with better technology and cost efficiency. "Most producers will be eliminated rather than acquired. This may sound cruel, but is the reality as they are technologically uncompetitive," Lu Jinbiao, a senior official at China's top polysilicon producer GCL-Poly Energy, told Reuters.
http://news.yahoo.com/solar-panels-pile-china-takes-axe-polysilicon-producers-210746815.html
Correcting the third paragraph... it's demand growth that has eased... not necessarily demand (except over short timeframes). Of course, the effect is the same in a high growth industry.