
Polysilicon producer REC Silicon has been forced to sell solar grade (FBR) polysilicon below cash cost, due to weak demand and ASP declines, driven by demand curtailment in China and continued polysilicon capacity expansions.
REC Silicon reported third quarter 2018 revenue of US$43.7 million, down from US$58.9 million in the previous quarter.
Unlock unlimited access for 12 whole months of distinctive global analysis
Photovoltaics International is now included.
- Regular insight and analysis of the industry’s biggest developments
- In-depth interviews with the industry’s leading figures
- Unlimited digital access to the PV Tech Power journal catalogue
- Unlimited digital access to the Photovoltaics International journal catalogue
- Access to more than 1,000 technical papers
- Discounts on Solar Media’s portfolio of events, in-person and virtual
Or continue reading this article for free
The company reported a negative EBITDA of US$6.1 million compared to a negative EBITDA of US$9.6 million in the previous quarter.
Polysilicon sales volume for the quarter was 1,113 MT, a 46.4% decrease from the previous quarter, while inventory increased by 503MT.
Solar grade FBR polysilicon revenue in the third quarter was only US$6.2 million, a 69.8% decrease from the previous quarter, due to sales volume declining 62.2%, quarter-on-quarter to only 658MT and average ASPs declining 20.5%.
The company made an EBITDA loss of US$9.9 million on FBR sales, due to selling below production cash costs of US$15.1/kg.
In a recent investor note, ROTH Capital financial analyst, Philip Shen noted that he expected polysilicon production to increase around 32% in 2019 to 520,000 MT, while global demand was expected to increase by only 5-10% , indicating that the industry may be oversupplied by as muchas 120,000 MT.
“If poly pricing remains low, it will be critical to follow how many polysilicon companies shut down as the new capacity coming online is generally lower cost and higher quality,” noted Shen in the investor report. “Additionally, with the aggressive ramp-up of China polysilicon capacity, China may soon be able to serve all of its polysilicon demand domestically.”
