China Solar Plant Explosion Repairs May Cause Global Price Hikes

Rising costs are threatening to ripple through the solar supply chain as workers race to repair damage from an explosion that shut down a Chinese plant that supplies a key material for the industry.

GCL-Poly Energy Holdings Ltd. will likely take one month to make repairs and restart production at its 48,000-ton-a-year polysilicon plant in Xinjiang, according to a person with knowledge of the matter, who asked not to be identified as the information isn’t public. The plant halted output after explosions July 19 resulting from distillation unit problems.

The price of polysilicon, a crystalline material that can conduct electrons when agitated by photons of light, jumped 20% Wednesday from the previous week, according to PVinsights. The material is the key building block for the solar supply chain. It’s sliced into thin wafers that are electrically connected in solar cells, which combine to form the panels that we see on rooftops and in countrysides.

The price hike may spill over to wafers and other components, China Merchants Securities analysts including You Jiaxun wrote in a note. LONGi Green Energy Technology Co., the world’s biggest wafer maker, jumped by as much as the 10% daily limit in the Shanghai stock exchange Thursday, hitting an all-time high.

GCL-Poly holds 38.5% equity interest in the Xinjiang plant, said the person. The company confirmed a flash explosion occurred at the plant in a written reply, without providing further details.

GCL-Poly was the top polysilicon producer in 2018 before slipping to fourth spot last year, according to BloombergNEF. Total global production of the material, which is a key building block for solar panels, was about 518,000 tons last year, according to BNEF.

Source : bloombergquint