Daqo drives polysilicon production costs down to industry record US$5.86/kg

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The company noted that the significant cost reduction in such a short period was due to the growing economies of scale as polysilicon production also reached a record 19,777MT (metric tonnes) for the quarter as it reached full production of its Phase 4A capacity expansion project. Image: Daqo

China-based high-purity polysilicon producer Daqo New Energy has reported that in the first quarter of 2020, the average total production cost of polysilicon was reduced to US$5.86/kg, down from US$6.38/kg in the previous quarter, a new industry record. 

The company noted that the significant cost reduction in such a short period was due to growing economies of scale, as polysilicon production also reached a record 19,777MT (metric tonnes) for the quarter. The quarter also saw Daqo attain full production of its Phase 4A capacity expansion project.

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Also contributing to the record were low production costs. Production process were further optimised, with those said to have exceeded original expectations. This included a per unit electricity usage reduction of approximately 7% compared to the previous quarter and a reduction of approximately 10% as compared to the prior year period, according to the company. 

Daqo New Energy has reported that in the first quarter of 2020, the average total production cost of polysilicon was reduced to US$5.86/kg, down from US$6.38/kg in the previous quarter, a new industry record. Image: Daqo

However, expectations of further polysilicon production cost reductions in the second quarter of 2020 are highly unlikely.

Due to demand constraints brought on by the COVID-19 pandemic creating ASP (Average Selling Price) pressure across the sector, Daqo’s polysilicon ASP averaged US$8.79/kg in Q1.

Daqo's major customers such as LONGi Green Energy and JinkoSolar have also significantly reduced polysilicon inventory due to global demand issues, according to the company.

As a result, and industry practice, annual production maintenance for part of its major Xinjiang facility will be undertaken in Q2. However, with capacity at record highs, facility maintenance is to be enacted in phases. 

Daqo only expects to produce approximately 13,500MT in Q2 and sell in the range of14,500MT to 15,500MT in the quarter. Therefore, production costs are expected to be higher as economies of scale will be lower.  

8 October 2024
San Francisco Bay Area, USA
PV Tech has been running an annual PV CellTech Conference since 2016. PV CellTech USA, on 8-9 October 2024 is our second PV CellTech conference dedicated to the U.S. manufacturing sector. The event in 2023 was a sell out success and 2024 will once again gather the key stakeholders from PV manufacturing, equipment/materials, policy-making and strategy, capital equipment investment and all interested downstream channels and third-party entities. The goal is simple: to map out PV manufacturing in the U.S. out to 2030 and beyond.

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