BOC International: The new national standard reflects the government's firm determination to choose GCL Technology (03800)

The Zhitong Finance App learned that BOC International released a research report saying that the new national standard for polysilicon energy consumption has been tightened beyond expectations. The bank believes that it reflects the government's firm determination to reverse the inward roll of photovoltaics. The reversal of the polysilicon process can be expected. GCL Technology (03800/purchase) is the preferred granular silicon leader in the industry, which has the lowest energy consumption and benefits the most from the new national standard.

The main views of BOC International are as follows:

A new national standard for polysilicon energy consumption was released, which was further tightened compared to the draft solicitation of comments

The “Energy Consumption Limits for Silicon Polysilicon and Germanium Unit Products” was officially released. Compared with the draft solicitation of comments in September last year, rod-shaped silicon/granular silicon grade 3 comprehensive energy consumption limits were further tightened from 6.4/5.0 kgce/kg to 6.3/4.6 kgce/kg, respectively. The rod silicon limit seems to have been reduced, but it is an energy consumption concentration area that accurately corresponds to stock production capacity. According to previous statistics, the 6.3-6.4 range accounts for 38% of industry output, and less than 6.3 accounts for only 45%. ^{At the same time, in order to prevent enterprises from reducing their nominal energy consumption by outsourcing high-energy intermediate products, in response to the current situation where almost all of the silicon cores used by enterprises are outsourced, the official draft clearly adds that if the silicon core is outsourced (not outsourced processing), the energy consumption per unit of silicon core product needs to be included in an additional level 3 value of the energy consumption limit level of polysilicon unit products, blocking the loophole that embellishes energy consumption data through outsourcing silicon cores. At the same time, the energy consumption for hydrogen gas conversion has been drastically raised from 0.2 kgCE/nm 3 to 0.6 kgCE/nm 3, which will increase significantly} How difficult it is for an enterprise to meet energy consumption standards.

The new national standard is expected to speed up the clearance of production capacity, and the margin of overcapacity is expected to be drastically reduced

The new national standard will be officially implemented on January 1, 2027, earlier than expected. At that time, enterprises that do not meet the Level 3 standard will be rectified within a limited period of time, and enterprises that have overdue or failed to meet the Level 2 standard after the rectification will be shut down. According to the Silicon Industry Branch's statistics on the energy consumption standards of the draft for comments last year, the effective production capacity of polysilicon in mainland China will drop to about 2.4 million tons, a sharp decrease of 31.4% compared to the 3.5 million tons already built. Due to the further tightening of the official draft standards, the bank expects the effective production capacity in mainland China to fall below 2 million tons, which is only about 1/3 of the estimated demand of 1.5 million tons in 2027, and the overcapacity margin is expected to be drastically reduced.