[Special Stock] BK Tops Faces Export Ban to Chinese Polysilicon Company... Impact on Global Solar Supply Chain

[Asia Economy Reporter Yoo Hyun-seok] BK Tops is showing strong performance. The rising prices of scrap metal and polysilicon raw materials seem to have increased expectations for improved earnings. It is also interpreted that the news of the U.S. government deciding to ban exports by American companies to solar panel material suppliers related to the human rights abuses of the Uyghur people in Xinjiang, China, including polysilicon, has had an impact.

As of 1:37 PM on the 24th, BK Tops was trading at 10,200 KRW, up 6.47% (620 KRW) compared to the previous trading day.

According to the scrap metal industry, the average nationwide price of iron scrap was about 510,000 KRW per ton (weight A, arrival basis) the previous day, rising approximately 34% from 380,000 KRW per ton at the beginning of the year. A BK Tops official predicted, "Regarding the sales from the demolition project of the Woongjin Polysilicon factory located in Sangju, Gyeongbuk, the revenue is expected to far exceed the 70 billion KRW target set when purchasing the factory."

Recently, due to the avoidance trend of Chinese-made polysilicon products, domestic polysilicon prices have been rising. Additionally, equipment prices for expanding polysilicon production facilities are also soaring.

BK Tops expects an initial transaction worth about 10 billion KRW to be completed by the end of this month or early next month. They also stated that inquiries about used production equipment from the old Woongjin Polysilicon factory purchased in February this year are increasing not only domestically but also overseas.

On the 23rd (local time), the U.S. Department of Commerce added five Chinese companies, including Hoshin Silicon Industry and Xinjiang Production and Construction Corps (XPCC), to the 'blacklist' of export restrictions for U.S. companies.

About half of the world's polysilicon is produced in Xinjiang. With the increasing demand for solar panels due to carbon-neutral policies worldwide, this measure is expected to directly and indirectly affect the global solar supply chain.

The U.S. government will soon implement import restrictions on polysilicon. Political media outlet Politico reported, citing sources, that the U.S. Customs and Border Protection (CBP) is expected to announce a ban on imports of polysilicon produced by Hoshin Silicon through a detention order.

If the measure is implemented, polysilicon produced by Hoshin Silicon Industry will be seized upon arrival at U.S. ports, and it must be proven that it is not related to forced labor to be allowed entry into the United States.

Jung Sang-yong, CEO of BK Tops, said, "The demolition project of the Sangju polysilicon factory will accelerate sales growth and a turnaround to operating profit," adding, "Upon my appointment, I will appoint Attorney Park Min-pyo as an advisor to strengthen corporate transparency and reliability."

Attorney Park is a legal expert who graduated from the 18th Judicial Research and Training Institute, attended Seoul National University Law School, and served as the chief prosecutor of the Seoul Eastern District Prosecutors' Office and head of the violent crimes division at the Supreme Prosecutors' Office. He also concurrently serves as chairman of the National Assembly Public Officials Ethics Committee and outside director of NH Investment & Securities. He was appointed as a member of the Prosecutors' Human Rights Committee during the tenure of former Prosecutor General Yoon Seok-youl.