Will the dispute over polysilicon entry standards be resolved in half a year?

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Decisions on access standards will be made within six months; the process of survival of the fittest among polysilicon producers has already begun. Source: China Business News – China Business Network. Date: 2010-05-14 15:36. Authors: Ye Wentian, Xue Ling. Although the relevant standards have not yet been introduced, significant changes have taken place in this industry since the end of September 2009, when a warning about excess polysilicon production capacity was issued. The concentration of the industry is increasing rapidly, large enterprises are expanding swiftly, while small and medium-sized enterprises are facing increasingly difficult conditions. Interest from investors in this industry is also gradually declining. 　　“After the May Day holiday, the **National Development and Reform Commission held a low-key and secretive seminar on the polysilicon industry in Beijing. 　　The enterprises attending the meeting included key players in the industry such as Jiangsu Zhongneng, Luoyang Zhongsilicon, and Suntech LDK. One of the attendees revealed to a reporter from China Business News that \"this is the last meeting before the introduction of the ‘Polycrystalline Silicon Industry Access Standards’ (hereinafter referred to as the ‘Standards’); these Standards will be officially released by the end of June.\" ” 　　However, this launch date is nearly 3 months later than what was planned at the beginning of this year. According to a draft of the \"Standards\" document obtained exclusively by reporters from China Business News at the beginning of the year, the planned launch date was early April. 　　“Disputes between ministries and differing opinions among companies have led to repeated delays in the adoption of this \"standard\" that could bring about major changes in the polysilicon industry. ”The participant said. 　　Although the \"Standard\" has not been introduced, significant changes have taken place in this industry since the end of September 2009, when a warning about oversupply of polysilicon capacity was issued. The concentration of the industry is increasing rapidly, large companies are expanding swiftly, small and medium-sized enterprises are facing growing difficulties, and interest from investors in this industry is gradually declining. 　　Delayed release of the “Standard”  Controversy accompanied the development of the “Standard” throughout the first half of the year. 　　“After four large-scale surveys last year, the \"Standards\" were finalized in January 2010, with almost no changes made over the following six months. ”An industry executive from a polysilicon company who has attended numerous ministerial meetings told a reporter from China Business News that this standard is highly controversial due to its implications for aspects such as layout, energy consumption, environmental protection, and supervision. 　　Significant opposition comes from small and medium-sized enterprises. 　　In the view of a manager from a polysilicon manufacturing company in Sichuan, the standards are too stringent. For example, it stipulates that the scale of new polysilicon production projects must be 3,000 tons per year or more; the power consumption for producing solar-grade polysilicon must be less than 60 kilowatt-hours per kilogram. By the end of 2011, polysilicon production capacities with a comprehensive power consumption of more than 200 kilowatt-hours per kilogram were to be phased out. “Many companies are not yet able to meet these requirements, and since the polysilicon industry is still in its early stages, such strict restrictive policies should not be in place. ”The official said that his company currently does not meet this standard. 　　According to the draft of the Standards, if these requirements are not met, enterprises will not be able to receive support in terms of credit and land; they will also not be able to obtain approvals or registrations, and banks will refuse to provide loans or credit facilities. 　　“Due to the huge investment required for polysilicon projects, which are mostly financed through bank loans, these regulations strangle the livelihoods of small and medium-sized enterprises. The problem is that the \"Standards\" have not been released yet, and banks have begun to tighten their lending policies toward us. The attitude of local authorities has also changed this year, shifting from strong support to caution, which has put a lot of companies under severe financial pressure. ”The aforementioned business executive told reporters. 　　It is understood that in previous discussions, as leading companies in the industry, Jiangxi Sunwoda and Jiangsu Zhongneng suggested raising the standard for a single production line to 5,000 tons, which is also the standard adopted by world-class enterprises. However, faced with opposition from many companies, after discussions among all parties, 3,000 tons was ultimately set as the standard. 　　However, the current reality in the domestic market is that there are only a handful of enterprises capable of handling 3,000 tons. 　　Another voice of opposition comes from the battery and module manufacturers at the downstream end of the photovoltaic industry chain. 　　A manager from a photovoltaic cell manufacturing company in Jiangsu told a reporter from China Business News that there is no oversupply in the polysilicon industry, and therefore no need for excessive restrictions. “In 2009, China’s demand for polysilicon was 40,000 tons, of which 20,000 tons were supplied by domestic companies and 20,000 tons were imported. These figures show that there is still a significant shortage of polysilicon in China, and at this time, overly strict measures should not be implemented. ”The company executive said. 　　In the view of Xie Xiaotuo, general manager of Changzhou Tianhua New Energy, the intentions of downstream companies are quite clear: they hope that the polysilicon industry in the upstream sector will develop rapidly and that prices will continue to fall. “The more upstream companies there are, the greater the benefits for battery and component manufacturers, as ample competition at the upstream level ensures that downstream companies have sufficient choices and room to set prices. It is clearly unfavorable for downstream companies when one upstream company dominates the market. ” 　　According to a senior executive from a large polysilicon company, as told to a reporter from China Business News, although the relevant standards were not introduced in the first half of this year, the National Development and Reform Commission has approved hardly any polysilicon projects so far this year. Most of the projects that companies are launching this year were approved several years ago. \"This is a highly sensitive period with an uncertain situation; everyone is anxiously waiting for policies to be introduced, but they remain unresolved, hanging in the air.\" ”