Wafer demand exceeding supply, says GCL-Poly as FBR technology ramps

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GCL-Poly Energy Holdings, the largest polysilicon and solar wafer producer reported strong third quarter results as demand exceeded supply and was running at 100% utilization rates for both products. 

The company reported that polysilicon production at a record high of 5,800MT per month, resulting in production of 17,241MT in the third quarter, representing an increase of approximately 27.2% compared with 13,550MT over the same period of last year.

GCL-Poly sold approximately 11,077MT of polysilicon in the first three quarters of 2014, representing a decrease of approximately 11.3% compared with 12,490MT over the same period of last year as in-house wafer demand increased significantly.

For the third quarter of 2014, the GCL-Poly sold approximately 3,614MT, a 10.1% decline compared with 4,018MT over the same period of last year.

The average selling price of polysilicon for the third quarter was US$21.76/kg, compared to US$22.49/kg in the previous quarter. 

FBR polysilicon update

Management noted in an earnings call that production of granular FBR (Fluidised Bed Reactor) polysilicon had commenced in the third quarter and the company had ramped its first reactor, noting that production had been progressing well to the point that it exceeded expectations, both in terms of cost and technology.

The capital expenditure cost for FBR polysilicon was said to be RMB700 million (US$114 million) per 10,000MT, with cash costs at US$5.8 to US$6 per kilo, a significant reduction of the cost of the Siemens process and possibly the lowest cost claimed for FBR technology. 

Wafer production

GCL-Poly said that wafer production reached 3,681MW in the third quarter of 2014, compared with 2,546MW in the prior year period, a 45% increase. Wafer production volume for the first three quarters of 2014 was approximately 9,584MW (including tolling of around 400MW), representing an increase of approximately 59.8% compared with 5,998MW in the prior year period. 

The company sold approximately 3,620MW of wafers in the quarter with an ASP of US$0.21 per watt, compared to US$0.22 per watt in the second quarter of 2014 and US$0.21 per watt in the same period of last year, highlighting stable prices due to supply and demand dynamics. 

However, the company noted that wafer production costs had been lowered significantly in 2014, due to debottlenecking and the deployment of in-house developed diamond wire sawing. 

Management noted that it expected to produce and sell around 13GW of wafers in 2014, inline with its nameplate capacity. 

Wafer business sell-off update

As previously reported by PV Tech, GCL-Poly is in discussions to divest its wafer operations due to high short-term debt issues. The company had said in an emergency analyst call ahead of its earnings call that it would possibly retain the ingot operations and sell only the wafer operations. 

However, management noted that this would actually confuse customers and the likelihood would be that both ingot and wafer production operations would be sold together.

Finally, in its downstream PV project business, GCL-Poly noted that it expected to complete and have grid connected at least 600MW by year-end. 

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