Rising silicon prices lift GCL-Poly back into the black

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The world’s largest producer of polysilicon returned to profit in the first half of 2014 as the average spot price for polysilicon rose 16% year-on-year, lifting GCL-Poly back into the black.

According to a filing to the Hong Kong stock exchange yesterday, GCL-Poly Energy Holdings posted a first half net income of $116 million, compared to a net loss of $118.3 million during the first half of 2013.

The turnaround – swelling sales by 52% year-on-year – has been accredited to an increase in the price of raw material combined with lower production costs.

"The operating environment of the solar industry in the first half of 2014 has significantly improved," said a GCL-Poly statement. The company forecasts a solid second-half for the global PV industry, expecting the installation of 45 GW of PV capacity globally by the end of 2014, which would represent a 22% increase on last year.

According to data compiled by Bloomberg, the average spot price for polysilicon has risen by 16% this year, with stronger demand fueling the increase. Equally, GCL-Poly chairman and CEO Yhu Gonghsan said yesterday in a conference call that the company lowered it polysilicon production costs by around 9.2% in H1 2014 to become "the lowest cost producer in the industry".

Demand for polysilicon has risen sharply this year, and is likely to top 15% by the end of 2014 – the sharpest increase since 2011. GCL-Poly will add 25,000 metric tons of granular silicon capacity before 2015, with wafer production capacity increasing by 1 GW to reach 12 GW by the end of 2014, the company said.

Alongside GCL-Poly, Germany’s Wacker Chemie AG has also expanded its production of polysilicon in order to cope with the increased demand.