How Biden Gave a Boost to One Xinjiang Solar Manufacturer
(Bloomberg) -- Four companies in China’s Xinjiang region produce nearly half of the world’s solar polysilicon supply. The U.S. government added three of them to its export blacklist -- the fourth had its best day on the stock market in more than a month.
Xinte Energy Co. gained 7.3% on the Hong Kong stock exchange after the Commerce Department added its three main rivals to a list of firms that U.S. companies are forbidden to sell products to without government approval. It’s unclear why Xinte was spared while units of Daqo New Energy Corp., GCL-Poly Energy Holdings Ltd. and East Hope Group Co. will be included.
“Xinte, which is one of the biggest producers of polysilicon globally, is not on the list despite having all of its capacity in Xinjiang,” Jefferies analyst Johnson Wan said in an emailed report. “We are not sure why this is the case.”
In addition to the three polysilicon producers, the Commerce Department added two other firms to its blacklist: the Xinjiang Production and Construction Corps, a quasi-governmental group that has previously been sanctioned, and Hoshine Silicon Industry (Shanshan) Co., which makes metallurgical silicon in Xinjiang that is later processed into polysilicon.
Hoshine has been targeted by U.S. Customs and Border Protection, with its products set to be blocked from entry at U.S. ports and only released if they can prove the goods are not made with forced labor, Bloomberg reported. The move marks one of the Biden administration’s biggest steps yet to counter alleged human rights abuses against China’s ethnic Uyghur Muslim minority.
Hoshine supplies Xinte, Daqo, GCL and East Hope, among other companies, Daiwa Capital Markets analyst Dennis Ip said in a research note, citing a February response from the company. Hoshine shares dropped as much as 10%, their daily limit and the most since March 24.
Tongwei Co., a Chinese polysilicon maker that doesn’t have any factories in Xinjiang, climbed 9.9% in Shanghai. Several other Chinese solar manufacturers also gained on Thursday. Even if the Hoshine ban extends to the U.S. blocking all solar panels made with Xinjiang polysilicon, there is enough supply of the material from other regions to satisfy the relatively small share of global consumption represented by the U.S., Ip said.
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