Major polysilicon producers benefiting from solar boom

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Four of the largest polysilicon producers have all reported strong revenue for the third quarter of 2014, on the back of stable ASPs and strong demand from the PV industry. 

The largest producer, GCL-Poly Energy reported an operating income for the first nine months of RMB5,711,843,171.88 (US$934.1 million) up from RMB3,963,206,229.10 (US$648.1 million) in the prior year period. Net profit was RMB322,093,256.64, compared to RMB366,675,160.70 in the first nine months of 2013. The company doesn’t breakout polysilicon revenue within its quarterly income statement.

GCL-Poly previously reported revenue from its solar material business of HK$11,888 million, a 55.5% increase from the prior year period, generating a profit of HK$1,135 million. Sales of polysilicon were KK$1,275 million in the second quarter of 2014.

Wacker Chemie’s polysilicon segment reported third quarter 2014 sales of €252.4 million, compared to €235.7 million in the prior quarter, despite undertaking scheduled maintenance work at a number of polysilicon facilities in the quarter.

Importantly, Wacker reported an EBITDA of €180.3 million, more than double the previous quarter (€87.9 million) and almost quadruple the figure (€46.6 million) in the prior year period. EBITDA margin increased from 32.2% in the second quarter of 2014 to 71.4% in the reporting quarter. 

Key factors behind the margin increase related to more retained advance payments for supply deals as well damages totalling €92.3 million in the quarter as more customers renegotiated supply contracts. Special income related to contracts has topped €206 million in the first nine months of 2014, compared to €69.3 million in prior year period.

The company also said that it also benefited from a substantial rise in polysilicon prices in the quarter. 

“After the first nine months of the year, we are well on track to achieve our targets for 2014,” said Rudolf Staudigl, Wacker Chemie CEO. “Demand has remained robust in numerous sectors and regions, and there have also been positive price signals for key WACKER products, particularly for our polysilicon business. Additionally, the measures introduced to improve our cost structures are having a tangible effect, helping us enhance our competitiveness and our profitability.”

Wacker reiterated that it remained focused on completing the construction of its new polysilicon plant in Tennessee, US on schedule. The company expects construction to be completed by the middle of 2015, with start-up in the second-half of the year.

Hemlock Semiconductor also retained sales momentum in the third quarter. Parent company, Dow Corning posted group revenue of US$1.52 billion, a 7% increase compared to 2013. Net income was US$109 million, compared to US$28 million in the prior year period. 

“Our Polysilicon segment through the Hemlock Semiconductor Group continued its strong performance in 2014 as long-term contract customers continued to take shipments of material for both semiconductor and solar grade polysilicon,” said J. Donald Sheets, Dow Corning’s Executive Vice President and Chief Financial Officer.

Finally, Korean-based OCI reported third quarter 2014 sales of KRW520 billion (US$492.3 million), flat with the prior quarter but posted higher EBITDA of KRW119 billion (US$112.5 million), compared to KRW59 billion in the previous quarter. The company noted that ASPs remained relatively flat but polysilicon shipment volumes increased. 

However, OCI is continuing to hold back on polysilicon production expansions, while aggressively undertaking cost reduction strategies at its polysilicon facilities. Only a 10,000MT debottlenecking project (P3.9) is expected to be completed in the third quarter of 2015. OCI noted that it had achieved a 23% manufacturing cost reduction over the past four years with plans to achieve a further 39% reduction over the next four years. 

Underlying the third quarter financial results of the major polysilicon producers, figures released by the China Nonferrous Metals Industry Association (CNMIA) highlighted record imports of polysilicon in to China in September. 

CNMIA reported 9,942MT of polysilicon imports in September, an 18.7% increase from the previous month. Korean polysilicon imports in the month were 4,046MT. 

However, processing trade imports of polysilicon from the US amounted to 1,698MT. German imports were 2,839MT. 

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