Major polysilicon producer Daqo New Energy has been forced to revise down guided polysilicon sales volumes in the third quarter of 2020, due to customers postponing purchasing orders as market prices hit US$12.5/kg.
Daqo said that polysilicon sales to external customers during the third quarter of 2020 were approximately 13,643MT, compared to previous guidance of approximately 17,000MT to 17,500MT.
Market ASPs for mono-grade polysilicon were currently said to be in the range of approximately US$11.5/kg to US$12.5/kg, compared to ASPs in the range of US$7.0/kg to US$7.5/kg in the second quarter of 2020.
In previously releasing its Q2 2020 financial results, Daqo had stated that its own polysilicon ASPs had been in the range of US$12/kg, after having been in the US$6.0/kg range in Q1 2020.
The weaker than expected demand from predominantly China-based wafer producers and integrated PV manufacturers indicates downstream PV power plant projects have become increasingly sensitive to financial viability when polysilicon ASPs are in the US$12/kg range. This has a direct negative impact on wafer and cell ASPs.
The company said in a statement: “The dramatic rise in ASPs, especially in September, caused postponement of purchasing orders from some customers. However, entering into October, the Company is seeing orders and product deliveries resuming to normal levels. We expect the inventory built up temporarily in September will be sold in the fourth quarter, as we expect to see strong end-market demand both domestically and abroad.”
Daqo also said that another round of maintenance had been completed and polysilicon production was back to full capacity in August, with production in Q3 2020 being approximately 18,406MT, exceeding previous guidance of 17,500MT to 18,000MT.
The company guided that total production costs and cash costs in the third quarter were expected to be approximately US$5.82/kg and US$4.88/kg, respectively. Daqo previously reported that its polysilicon average total production cost was US$5.79/kg in Q2 2020.
ASPs in the third quarter were expected to be around US$9.13/kg, compared to US$7.04/kg in the second quarter of 2020.
Polysilicon production guidance for the full year was increased and in the range of 75,000MT to 76,000MT, up slightly from previous guidance of 73,000MT to 75,000MT.