On September 5th, an earthquake that was 6.8 in magnitude struck Ganzi Prefecture, which is a part of China’s Sichuan Province. The provincial-level agencies that specifically deal with earthquakes and geological disasters are reported to have initiated their “level-2” emergency response and relief.
As pointed out by Chinese news outlets, Sichuan contains many large manufacturing bases for PV products. The major domestic solar energy enterprises that have set up shops there include Jinko, GCL-Poly, JYT, and Gaoce. How these companies plan and adjust their production activities can have a significant influence on the PV industry as a whole.
Based on the latest information provided by Chinese news outlets and market intelligence firms, the local wafer production capacity figures of Jinko, JYT, Gaoce, and TongHe for PV wafers have come to 20GW per year, 12GW per year, 6GW per year, and 15GW per year respectively. As for the local production capacity figures for polysilicon materials, Sichuan as a whole has around 207,000 tons per year, of which Yongxiang (Leshan) and GCL-Poly (Leshan) account for 107,000 tons per year and 100,000 tons per year respectively. Turning to PV cells, Tongwei has three main production sites in the province. Its cell production sites in Meishan and Chengdu each have 10GW per year, while its production site in Jintang has 6.6GW per year. Yingfa also has 16GW per year of cell production capacity in the province.
GCL-Poly has reported that its local production sites were all inspected following the earthquake. Its Leshan site, which manufactures granular silicon, is operating “safely and normally” as it is unaffected by the earthquake. Tongwei has also reported that the earthquake has not caused disruptions at its local production sites, which are far from the epicenter. Tongwei added that the regional supply chain for PV products has not been damaged.
Although the latest earthquake appears to have little to no impact, the regional supply chain has been affected by the temporary electricity rationing measure implemented by the provincial government as a response to the ongoing heatwave. On August 20th, the provincial economic and information department and Sichuan Electric Power Company, which is under the State Grid Corporation of China, jointly announced that local industries would have to limit their electricity consumption for a longer period in order to free up more electricity supply for civilians. Specifically, electricity rationing was to continue for five more days from August 15th to 20th. Hence, the effective period of the policy was extended to 11 days, and local industries including PV manufacturers experienced disruptions in varying degrees
Citing the information provided by China Nonferrous Metal Industry Association (i.e., Silicon China), Chinese news outlets have reported that GCL-Poly’s and Yongxiang’s polysilicon production sites in Sichuan have cut output. Other provinces such as Jiangsu and Hubei have also implemented electricity rationing this summer. As a result, the supply of polysilicon materials from Zhongneng and CSG is lower than expected. Looking polysilicon prices in China, the latest round of price hikes occurred at the end of August. This round is the 29th of this year, and the highest quote has climbed to RMB 310,000 per ton.