The trade deal signed between the United States and China this week brought a jolt of positivity to U.S. polysilicon manufacturers, which have for years struggled to stay competitive while tariffs hampered access to the Chinese market that accounts for more than 90 percent of polysilicon demand.

While U.S. polysilicon stocks shot up at the news, any excitement has since been tempered. It remains hazy how much help the agreement will deliver to the three U.S.-based polysilicon manufacturers. The deal, the first of a two-phase negotiation process, bundled polysilicon along with a list of other goods worth a collective $77.7 billion above 2017 exports that China agreed to purchase over the span of two years.

From the terms of the deal, it remains unclear if China will divide its spending among the products (which also includes goods such as vehicles, iron and steel) or has made a specific commitment to purchase each type of product.

U.S. polysilicon manufacturer REC Silicon is working through the details with the U.S. Trade Representative and awaiting specifics, said Francine Sullivan, the company’s vice president of business development, but she believes the purchases will be significant.

“All we have right now is the publicly available document. But we are hopeful, and we believe we will get the same kind of market access we had before,” said Sullivan. “We have reason to be confident.”

China, the world’s largest solar market, placed steep tariffs on imports of polysilicon — a feedstock for solar cells — in 2014, after the U.S. imposed its first duties on Chinese solar cells. After that, exports to China from REC and the other two U.S. manufacturers, Wacker Polysilicon and Hemlock Semiconductor, faced duties as high as 57 percent.

Exports to China went into free fall. The U.S. exported 22,314 tons of polysilicon to China in 2014, according to BloombergNEF. The figure dropped to 8,724 tons in 2017, the baseline year used in the new trade agreement.

Hemlock in 2014 decided to mothball plans for a new plant in Tennessee. REC closed its Washington state polysilicon plant in July of 2019 and laid off 450 employees. This fall, it also mulled selling its plant in Montana, which produces silane gas for semiconductors.

The new agreement — which has also caused uncertainty in other sectors of the energy industry — comes amid a review process of those earlier tariffs, called antidumping and countervailing duties. China is slated to determine by January 18 if they will continue. If they do, the new deal could soften their edge.

“It may be that China will actually extend the duties, but it is my understanding that the purchase commitments will override these existing duties, and China will find a way to purchase polysilicon despite having the duties in place,” said Sullivan.

In addition to eliminating or extending the duties, said Sullivan, China could create a tariff-free quota for U.S. imports or open a previously closed loophole that allows for the import of tariff-free U.S. polysilicon if modules made with that material are then sold outside of China.

Sullivan said REC is not ready to reopen its Washington plant based on the commitments made so far, but the company is assessing the business case to do so.

If REC does reopen the plant, its costs could be competitive with polysilicon prices currently in China, which are around $10 per kilogram, according to a January note from Roth Capital Partners. But Roth also said that “U.S. producers likely have a tough road ahead to compete” against low Chinese pricing.