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China trade dispute blamed for shutdown of Moses Lake polysilicon supplier

REC Silicon announced it will halt production at its plant in Moses Lake on Wednesday and its remaining 150 employees will be laid off at the end of June unless the trade dispute between China and the United States ends. (SR)
Associated Press

MOSES LAKE, Wash. – A central Washington factory that produces polysilicon for use in the manufacture of solar panels is shutting down because of the nation’s ongoing trade dispute with China, the company said.

REC Silicon announced it would halt production at its plant in Moses Lake on Wednesday and its remaining 150 employees will be laid off at the end of June unless the dispute ends.

“We will keep the employees for another six weeks, until we see what is the outcome of the trade war,” company president Tore Torvund told investors last week.

The Columbia Basin Herald reported last weekend that REC is struggling because of China’s 57% tariff on U.S.-made polysilicon.

Torvund said if the U.S. and China fail to reach agreement, the plant will be mothballed until prices improve.

China imposed tariffs on U.S. polysilicon after the U.S. imposed tariffs on Chinese solar panels. The tariffs basically prevent REC from selling its product in China, which makes most of the world’s solar panels, REC Silicon has said.

Despite the problems caused by the trade war, REC Silicon supports the actions of President Donald Trump, said Francine Sullivan, vice president of marketing for the company.

“This kind of brinksmanship is necessary in politics,” Sullivan said.

REC reported a loss of about $4.7 million on revenues of $45 million for the first three months of 2019. While the company has increased sales, Torvund said the world price for polysilicon keeps falling.

Meanwhile, REC Silicon’s plant in Butte, Montana, remains profitable despite curtailed operations, the company said. The Butte facility makes silicon gas for the electronics market.

The Butte plant reduced production earlier this year because of high electricity prices.

Torvund said REC Silicon will rely on Butte operations to keep the company going while the situation in Moses Lake is resolved.

Few Chinese polysilicon producers are making a profit, Torvund said.

“No one in the value chain is making money at today’s prices,” he said. “There’s still an oversupply.”