Polysilicon producer REC Silicon reported a 48% decline in polysilicon sales in the first quarter of 2015, driven by a number of negative impacts.
REC Silicon sold 2,390MT of polysilicon in the first quarter, down 48% when compared to the previous quarter. The company said that lower seasonal demand contributed to the decline but also highlighted a 7.9% decline in pricing, excess polysilicon and wafers in the market as well as a shipment slowdown due to US port disputes with workers.
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Furthermore, REC Silicon noted that weaker than expected demand and limited ability to ship polysilicon to China under the process in trade import duty mitigation led to high inventory levels throughout the supply chain. As a result REC Silicon’s inventories grew by approximately US$42.5 million in the quarter.
Overall, REC Silicon reported first quarter revenue of 74.4 million, compared to US$126.2 million in the previous quarter. EBITDA stood at US$24.8 million, down from US$38.0 million in the previous quarter. The lower EBITDA was attributed to lower sales volumes and lower prices, according to the company.
Profit from continuing operations was US$46.7 million in the first quarter, compared to US$119.0 million in the previous quarter, which was attributed to currency gains caused by a stronger US dollar compared to the prior quarter.
Polysilicon production in the quarter reached 5,210MT, with its FBR-based polysilicon production reaching a cash cost of US$10.7/kg.
The company also noted that its planned JV in China for FBR production was proceeding as planned.
Tore Torvund, CEO of REC Silicon said, “Activities in the Yulin JV are progressing according to plan. The realisation of this next generation FBR polysilicon plant will support the increasing demand in China's growing PV industry.”
Construction activities are expected to begin during the second quarter of 2015. Total expenditure on the plant is expected to be in the region of US$1.25 billion. Production ramp in 2017 is expected to target 7,300MT in the first year and reach capacity of 19,300MT in 2019.