Daqo's polysilicon production volume of this year is already sold out
Post date: 19/05/2021 - 09:03
Chinese Daqo New Energy Corp., manufacturer of high-purity polysilicon for the solar PV industry, announced its unaudited financial results for the first quarter of 2021. Revenues were $256.1 million, compared to $247.7 million in the fourth quarter of 2020 and $168.8 million in the first quarter of 2020. The increase in revenues was primarily due to higher average selling prices partially offset by slightly lower polysilicon sales volume. Net income attributable to Daqo New Energy shareholders was $83.2 million, compared to $72.8 million in the fourth quarter of 2020 and $33.2 million in the first quarter of 2020.
Polysilicon production volume was 20,185 MT in Q1 2021, compared to 21,008 MT in Q4 2020. Polysilicon sales volume was 21,471 MT (Q4 2020: 23,186 MT). Polysilicon average total production cost increased to $6.29/kg in Q1 2021 (Q4 2020: $5.92/kg), and average selling price (ASP) rose by 10 percent to $11.90/kg in Q1 2021, compared to $10.79/kg in Q4 2020. The increase of production cost was primarily due to the rise in the cost of silicon raw material and the impact of lower production volumes, says the company. During the quarter, approximately 99 percent of Daqo's polysilicon products were sold to mono-wafer customers.
»We continued to see strong momentum in customer demand for high-purity polysilicon, which led to a significant shortage of polysilicon and higher polysilicon ASPs,« said Longgen Zhang, CEO of Daqo New Energy. Due to the elapsed time from contract signing, product shipment, to revenue recognition upon products' arrival at customers' sites, »it takes time for market prices to be fully reflected in our ASPs during periods of rapid price change.« Based on current customer contracts and product deliveries, Daqo expects the ASP in the second quarter of 2021 to be in the range of $19.00 to $20.00/kg, »a significant improvement compared to Q1 that better reflects recent market pricing trends«. Current market pricing for high-purity mono-grade polysilicon has already reached the level of $23 to $25/kg, according to Longgen Zhang: »With strong end market demand driven by global carbon neutrality commitments by all major economies, major mono-wafer manufacturers continue their capacity expansion and new entrants build new wafer capacity. As a result, we believe that supply in the polysilicon market will remain tight until the middle of 2022, when the market will finally see some additional supply of polysilicon.«
Daqo expects to produce 20,000 MT to 21,000 MT of polysilicon and sell 20,000 MT to 21,000 MT to external customers during the second quarter of 2021. The company raised its guidance for annual production volume to the range of 81,000 MT to 83,000 MT from 80,000 MT to 81,000 MT. The production volume of this year is already »sold out through the long-term supply agreements with customers that span all the major mono-wafer manufactures as well as major integrated solar manufacturers.«
In mid-March, construction for a new production facility began which will add 35,000 metric ton capacity for high-purity polysilicon. Completion is expected by the end of 2021 and ramp up to full capacity by the end of Q1 2022.