With the suspension of China’s first-ever polysilicon production line (built by Dongfang Electric in Sichuan province), China’s polysilicon industry is facing its biggest challenge since its founding, with 80 percent of manufacturers now closing operations.

Of over 40 poly manufacturers in China, only six or seven are still in operation due to the plunging price and industry overcapacity of the solar material. The average cost of polysilicon production in China ranges from 200,000 yuan to 300,000 yuan per ton, while the market price of the key material in solar modules has dropped to roughly 200,000 yuan per ton.

As a result, China’s imports of polysilicon doubled in February 2012 compared to the same period last year. Statistics from the General Administration of Customs showed that China imported 7,615 tons of polysilicon in February, an increase of 130 percent year-on-year. China currently imports half its polysilicon from companies overseas.

In Sichuan province, where one-fourth of these businesses are located, only two of the plants, Yongxiang Polysilicon and Renesola, remain in operation. Yongxiang has an annual production capacity of 4,000 tons; Renesola has an annual capacity of 3,500 tons.

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