Non-Chinese polysilicon manufacturers return to negative EBITDA

Polysilicon EBITDA margins of OCI, REC Silicon and Wacker from Q3 2018 through Q3 2019
Above all, the price decline drove the polysilicon EBITDA of OCI, REC Silicon and Wacker into the red – Chart: Bernreuter Research

Polysilicon makers OCI (South Korea, Malaysia), Wacker (Germany, USA) and REC Silicon (USA) all landed in red EBITDA territory in the third quarter. Leaving one-off effects aside, operating EBITDA margins ranged from -3.4% (OCI) to -9.3% (REC Silicon) to -13.3% (Wacker).

The negative figures were mainly due to the continuing price decline, but also to individual reasons:

  • OCI conducted maintenance at its Korean plant; the lower utilization rate increased fixed costs.
  • REC Silicon experienced a higher electricity rate, a production interruption caused by an equipment failure, and considerably declining polysilicon sales volumes for its electronic-grade plant in Butte. If one excludes severance payments of $2.2 million after the shutdown of the solar-grade plant in Moses Lake, REC Silicon’s EBITDA margin of -15.4% decreases to -9.3%.
  • Wacker drew down inventory, which compressed the EBITDA margin of its polysilicon division.

Both OCI and Wacker reported a strong increase of polysilicon sales volumes by 18% and 22%, respectively, over the prior quarter. If growing supply from new production capacities in China overcompensates rising demand, however, a rebound of polysilicon prices remains out of sight.

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