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Trade war forces closure of REC Silicon plant in Washington but Butte facility fine

Trade war forces closure of REC Silicon plant in Washington but Butte facility fine

REC Silicon plant

REC Silicon exports much of its production of polysilicon.

REC Silicon’s factory in Moses Lake, Washington, is shutting down because of the United States' ongoing trade war with China, but the company's plant located just west of Butte will continue to operate as usual, according to a company official.

REC Silicon announced Tuesday that it will halt production at its Moses Lake plant and that its remaining 150 employees will be laid off at the end of June unless the trade dispute ends.

But there is no plan to lay-off Butte workers at the Montana Connections Business Park, said Francine Sullivan, REC Silicon vice president of business development.

“Butte is a very good asset,” Sullivan said by phone Tuesday. “It has decent markets, and the business is very strong. We’re hoping to continue to run it as is.”

China imposed tariffs on U.S. polysilicon, which is used to make solar panels, 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.

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

The Butte plant is mostly shipping its product to Japan and Korea.

The Butte plant reduced production earlier this year because of high electricity prices. Sullivan said the Butte plant turned a reactor off temporarily due to Montana power prices spiking early in 2019. But it caused no layoffs and was “just temporary," according to Sullivan.

Last week, company president Tore Torvund told investors that the company would keep Moses Lake employees for another six weeks.

“Until we see what is the outcome of the trade war,” he said.

Despite the problems caused by the trade war, REC Silicon supports the actions of President Donald Trump, said Sullivan.

"This kind of brinksmanship is necessary in politics," Sullivan said. “The last thing I would do is criticize the president. He did the right thing.”

Sullivan said the Butte plant would absorb as many Moses Lake workers as it could. But, she said, there’s a limit to what the company can do.

“We don’t want to strangle Butte,” she said.

The Butte plant has also felt the pinch from the trade war with China. Over the last couple of years, REC Silicon has laid off about 35 employees at the Butte plant as the company struggled through the trade war.

The Butte factory employed roughly 200 people as of Tuesday.

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

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.

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."


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Environmental and natural resources reporter for the Montana Standard.

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