Daqo New Energy continues to be at the vanguard of Chinese polysilicon producers able to execute on expansion plans and deliver to market at highly competitive costs. In its Q1 2015 results Daqo has reported record polysilicon production of 1,801 MT, however stable shipments quarter of quarter (Q/Q). Its wafer shipments grew from 17.8 million pieces to 18.8 million Q/Q.
The highlight for the quarter was the falling production costs, to only $12.80/kg. Daqo has attributed this to lower electricity consumption and improvements in production efficiency.
Daqo is continuing to pursue expansion plans, targeting an increase of 6,000 MT in nameplate production capacity by the end of this month, with pilot production beginning in June. The additional capacity is schedule to be fully ramped by Q3. Daqo expects production costs to come in at $12/kg when its entire 12,150 MT is fully operational and equipped with Hydrochlorination technology.
IHS upstream analyst Ray Lian told pv magazine that Daqo is one of the cost leaders in the polysilicon supply business, due to a number of factors including its ability to access low-cost electricity at its Xinjiang facilities. Daqo came in ninth place in IHS 2014 polysilicon rankings, by production volume, although is likely to climb the rankings in 2015.
The Chinese polysilicon market continues to be affected by trade barriers, affecting U.S. polysilicon exports to China, and to a lesser extent those from Europe and Korea.
Downward price pressure is evident in the polysilicon market at present, with Daqos revenues declining to $41.9 million from $49.5 million Q/Q, and $42.1 million Y/Y. A gross profit of $8.5 million was reported at a margin of 20.2%, down from 25.4% Q/Q and 21.4% Y/Y.
Daqo expects that increasing demand, due to a growing PV end market particularly in China, will cause for price stabilization. For Q2 2015 it expects to ship around 1,320 MT of polysilicon and between 17.5 million and 18 million wafer pieces.