China’s largest solar grade polysilicon producer, GCL-Poly Energy Holdings, has warned that it will incur a substantial but not detailed profit loss for the full-year 2012.
The company had posted a 2012 first-half year loss of HK$330 million due to weaker than expected demand and rapidly falling ASPs, despite continued manufacturing cost reductions.
Significant overcapacity in polysilicon production, coupled to an inventory overhang from 2011, had resulted in polysilicon prices reaching a record low in December 2012.
Prices fell below manufacturing costs for a significant number of suppliers forcing a high percentage of players to reduce, stop or simply exit the market sector entirely.
GCL-Poly blamed all of these factors for the profit warning announcement but also claimed foreign producers, which had been the major producers of polysilicon for half a century, of “dumping viciously low-priced polysilicon to China”.
GCL-Poly as well as other struggling China-based polysilicon companies had demanded and gained success in getting the Chinese authorities to investigate dumping claims.
The polysilicon producer also noted that the price declines were particularly strong during the fourth quarter of 2012, yet noted prices had stabilised in December, which supports new in-depth analysis from Bernreuter Research.
The company said that it also expected to incur impairment charges and make provisions against inventory and production facilities in its full-year financial reporting.
GCL-Poly has the sector's largest nameplate capacity of 65,000MT, although production has never reached half this level since the company aggressively started building a few years ago.