Daqo continues to ride the wave of low polysilicon prices

Polysilicon EBITDA margins of Daqo, OCI, Wacker and REC Silicon from Q1 2018 through Q1 2019
While non-Chinese competitors are in the red, Daqo still enjoys an EBITDA margin of more than 20% – Chart: Bernreuter Research

With record-low production costs and a positive EBITDA margin of 24.6%, China-based polysilicon manufacturer Daqo New Energy defied the low polysilicon prices in the first quarter.

The company achieved a new record with total production costs of $7.42/kg and cash costs (excluding depreciation) of $6.20/kg. Despite a low average selling price of $9.55/kg, this was enough to reach a gross profit of $18.3 million and an EBITDA of $20 million in the first quarter.

Daqo’s production volume of 8,764 metric tons (MT) also hit a new quarterly record. The annualized effective production capacity has thus increased to slightly more than 35,000 MT whereas the company still quotes a nominal capacity of 30,000 MT.

Following the trend to monocrystalline solar modules and leaving Chinese competitors behind, Daqo increased the share of mono-grade polysilicon in its output to 80% in April.

According to CEO Longgen Zhang, other Chinese players have experienced delays with ramping up their new production capacities. Zhang commented: “These new capacities are generally unable to immediately produce high-quality mono-grade polysilicon due to quality issues.”

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