The China government has announced a temporary stoppage of polysilicon imports through export processing zones (EPZs) beginning September 1, 2014, with the measure intended to block evasion of anti-dumping and anti-subsidization taxes.

The China government has imposed anti-dumping and anti-subsidization tariffs on polysilicon imported from the US and South Korea, but polysilicon imported for processing in EPZs has not been subject to the taxation. As a result, 70-80% of imported polysilicon has been going through EPZs to evade the taxation.

China-based solar-grade monocrystalline silicon wafer maker Zhejiang Yuhui Solar Energy Source indicated that the China government's measure will tighten supply of polysilicon in the local market and push up prices to US$23-25/kg. China's domestic polysilicon production and imports are estimated to each account for 50% of total demand in China in 2014.

China-based polysilicon and solar-grade silicon wafer makers are expected to hike prices due to the measure, according to Taiwan-based KGI Securities. Taiwan-based solar wafer makers will benefit from the measure because they may increase quotes and/or receive orders shifted from China-based makers, KGI said.