Moves by Beijing to reform the polysilicon manufacturing sector will result in a cull some of the largest producers have warned.
The Chinese government plans to support an increase in technological advancement in the sector that will leave less efficient manufacturers behind and “nurture a batch of internationally competitive producers”, according to Reuters.
Chinese sources in the industry expect the move to ultimately cut the country’s production capacity in half.
“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 GCL-Poly Energy, told Reuters.
Lu was backed up by Ma Haitian, deputy secretary general of the Silicon Industry of China Nonferrous Metals Industry Association (CNMIA), who said: “Large amounts of ineffective, high-cost production capacity will exit the market.”
A CNMIA report released last month revealed that in the first half of 2013 just six companies were actively producing polysilicon while 43 firms left their plants closed.
Beijing announced tariffs on Korean and US polysilicon in an effort to curb dumping.