Daqo salutes record profits however warns of 'difficult' future polysilicon development setting
- Polysilicon producer Daqo New Energy posted record business profits in Q3 2021 as the firm rode a wave of polysilicon cost hikes, however warned of a tough environment for future capacity developments.
Despite polysilicon production prices rising by around 10% on the back of high silicon powder prices during the coverage duration, average asking price for polysilicon climbed by 32% to US$ 27.55/ kg throughout Q3, sending out revenues up by 33% to US$ 585.8 million.
This resulted in a record quarterly gross profit figure of US$ 435.2 million, equal to a gross margin of some 74.3%.
Additionally, polysilicon ASPs have actually continued to climb into the 4th quarter, driven by raising silicon powder as well as energy prices in China. Daqo kept in mind that it had understood ASPs of US$ 33-- 35/kg throughout Q4 to date, with costs presently floating at between US$ 35-- 36/kg.
Zhang stated that as a result of continued high demand for polysilicon it has been able to hand down effectively all rises within its cost base onto its customers, with impacts to its expense framework expected to continue. Regardless of this, Daqo did stress that silicon powder prices have actually stabilised in recent weeks.
On a teleconference with experts following its results disclosure, the firm's financing chief Ming Yang said that the business's expense structure was "challenging to figure out" for its fourth quarter. Silicon powder rates are presently in the US$ 8-- 10/kg array, having actually been US$ 2.50-- 3/kg in Q3, nonetheless prices are expected to abate into next year. Zhang likewise said the firm had seen a limited influence to manufacturing as a result of controls and limitations on energy usage in China amidst a wider energy crisis in the country.
Daqo validated that its Stage 4B capacity development, which is to include an additional 35,000 MT of manufacturing capability, remains on time and also is readied to end up building and construction later on this quarter before ramping up to full manufacturing by the end of Q1 2022.
The firm has a target of achieving total annual production capability of 270,000 MT by the end of 2024, nonetheless Zhang warned that the rate of polysilicon capacity development would slow in the future as a result of allocations worrying energy usage and carbon emissions in China, aspects which he said produced a "difficult" environment.
Daqo has begun recognizing potential sites for future ability growths however claimed it would certainly do so with renewable energy supply in mind, planning to produce 'eco-friendly polysilicon' in the future.
In guidance for Q4 2021, Daqo stated it expected to generate in between 83-- 85,000 MT of polysilicon in total this year, suggesting a Q4 2021 manufacturing total of in between 22-- 22,000 MT.