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REC Shutters Norwegian Solar-Wafer Output as Demand Dwindles

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Jan. 4 (Bloomberg) -- Renewable Energy Corp. ASA, the Norwegian solar-parts maker that halted factories last year, will further reduce wafer production as prices extend declines.

REC will temporarily close half its 300-megawatt output of monocrystalline wafers at a facility in Glomfjord, Norway, in the first quarter, the Sandvika-based company said today in a statement. The shutdown will affect about 65 employees, it said.

“The quicker they do this the better,” Anita Huun, an analyst at Svenska Handelsbanken AB in Oslo, said by telephone. “It’s going to be very challenging to be profitable in the Norwegian assets given the cost structure there versus Chinese peers.”

European solar-component makers are under pressure from Chinese rivals that expanded output capacity just as consumption slowed, causing wafer and cell prices to plummet. REC and its European peers Solarworld AG and Q-Cells SE have cut production as demand shrinks in the region, where Germany, France and Italy have reduced subsidies to cap booming solar installations.

REC rose as much as 7.9 percent to 3.79 kroner in Oslo trading, after falling 5 percent earlier in the day. The shares were at 3.66 kroner as of 3:10 p.m. local time.

The company, which in October closed down Norwegian plants that were already idle, and in November cut wafer output at its Heroeya factory, expects to produce 105 megawatts of solar wafers in Norway in the first quarter. Wafer, cell and module output at its Singapore facility and polysilicon production in the U.S. remain at full capacity, REC said.

Prices for high-grade polysilicon, used in solar panels, climbed 4.5 percent on the week to $30.50 a kilo, PV Insights said today in a report on its website. The price of 6-inch monocrystalline solar wafers rose 0.5 percent to $1.53 apiece.

To contact the reporter on this story: Stephen Treloar in Oslo at streloar1@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net

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