Ferroglobe, REC to strengthen silicon supply chain for US solar sector

Ferroglobe and REC Silicon entered a memorandum of understanding June 13 to pursue a silicon supply agreement that will support each company's US silicon capacity and help establish a "low-carbon and fully traceable US-based solar supply chain."

REC, which produces silicon materials for the solar and electronics industries, said its need to secure greater silicon supply and grow its US production capacity has been triggered by recent third-party investments and the US' push for more solar energy infrastructure, according to a joint statement released with Ferroglobe.

The MOU also "commits the companies to work together to increase production and employment at each of the companies' facilities."

REC said demand for its products in the US could increase considerably if Congress passes the Solar Energy Manufacturing for America Act, which was introduced by Senator Jon Ossoff in 2021. The legislation allows a new tax credit for producers of solar components.

"It is imperative that the solar manufacturing industry grows and diversifies," REC CEO James May said in the statement. "We believe that the passage of SEMA in particular would result in the creation of tens of thousands of high-paying manufacturing jobs across the sector, accelerating the US transition to clean energy."

Norway-based REC produces polysilicon and silicon gasses. It operates a plant in Butte, Montana, and plans to restart operations at its idled facility in Moses Lake, Washington, in 2023.

London-based Ferroglobe will "leverage its asset platform in the United States" to supply high purity silicon metal to REC, according to the statement.

"We are excited to collaborate with REC Silicon on this important initiative," Ferroglobe CEO Marco Levi said. "We have had a longstanding relationship with REC, and this MOU aligns both company's respective expertise and competencies towards a common goal which is critical to the United States."

Ferroglobe operates US silicon plants in Alabama, West Virginia and Ohio. The company recently restarted operations at its previously idled 22,000 mt/year facility in Selma, Alabama, amid bullish trends in the global silicon market.

The Platts assessment for 553-grade silicon settled at $3.95-$4.05/lb delivered Midwest June 8, according to data from S&P Global Commodity Insights, down from $4.20-$4.85 at the beginning of the year. However, the assessment held below $2/lb in the first half of 2021 before spiking in the fourth quarter.