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Difficult market conditions and industry-wide overcapacity has led to Elkem Solar, based in Norway, to temporarily suspend production of its solar grade silicon (SoG) material. The company had only recently restarted production after idling operations in October last year. Elkem had recently said that it would reduce its ferrosilicon sales by as much as 15,000 tonnes due to FeSi prices falling below production costs. Elkem's annual capacity of SoG material is 6,000MT.
“There is a large overcapacity in the solar sector and the market is in a phase of consolidation, adjusting production to demand,” stated Trond Sæterstad, senior vice president Elkem Solar. “The market for solar power will continue to grow in the future and Elkem Solar has a technology that provides us with a significant competitive advantage over other manufacturers. We will therefore be in a stronger position than our competitors when the market recovers.”
Higher-purity polysilicon prices have plummeted over recent years, with blended average spot prices just above US$20/kg, forcing lower-grade material prices to below manufacturing costs or close to cost levels. Many small polysilicon producers have halted production and or exited the sector.
Elkem Solar employed 225 workers who are negotiating with management over the extent of the temporary layoffs. The company did not comment on when production or market conditions would improve for production to be resumed.