The business produced 197,831 metric lots (MT) of polysilicon in 2023, up 47.8% year-on-year (YoY) from 133,812 MT in 2022. YoY polysilicon sales increased 50.5% to 200,002 MT in 2023, up from 132,909 MT the previous year.
Throughout 2023 the typical selling rate (ASP) of polysilicon tanked, from US$ 32.54 in late 2022 to US$ 7.97/ kg in Q4 2023. This slashed earnings in Daqo’s Q3 results– and brought its annual earnings below US$ 4.6 billion in 2022 to US$ 2.3 billion in 2023, regardless of comprehensive capability growths. Gross revenue for the year was US$ 920 million compared to US$ 3,407.9 million in 2022, and gross margin dropped from 74% to 39.9%.
Xu stated: “Despite robust need development for solar PV items internationally in 2023, the high polysilicon costs driven by capability inequalities in between upstream and downstream gamers and the resulting supply lacks that we had actually seen in 2022 were eased by early 2023. As an outcome, polysilicon ASPs decreased considerably for the year.”
As 2023 advanced, Daqo’s production focused a growing number of on n-type silicon, Xu stated, as the business upheld its functional expense and stock levels versus severe market conditions: “Q4 saw strong need from clients for our top quality n-type polysilicon,” he stated. “In overall, we delivered 59,392 MT of polysilicon for the quarter, leaving our ended up products stock at an extremely low level of less than one week of production volume throughout our 2 centers. This low stock level has actually enabled us to successfully hedge versus drawback threats throughout the off-season duration near to completion of year.
“During the month of December, our n-type item mix reached around 60%.”
Anticipating 2024, Daqo projections ever-greater polysilicon production: “We prepare to start preliminary production at our brand-new Inner Mongolia 5B center in Q2 2024, and as such we prepare for complete year 2024 production volume to be around 280,000 MT to 300,000 MT, roughly 40% to 50% greater than in 2023,” Xiang Xu stated.
The business likewise signed a financial investment offer to open a brand-new polysilicon production center in Xinjiang province through its subsidiary Xinjiang Daqo. This center would have around 100,000 MT of polysilicon production capability as soon as totally functional. The United States federal government has actually enforced trade tariffs that disallow items produced in Xinjiang from going through customizeds unless they can show that their supply chains are devoid of the supposed required labour performed in the area. Conversations are continuous in the European Union for a comparable policy.
Prepare for higher capability growths in 2024, in spite of down cost pressure, go some method to verifying forecasts made by polysilicon market expert company Bernreuter Research in November 2023. Bernreuter called the polysilicon market “cut-throat”, and projection that the greatest Chinese manufacturers, led by Daqo and Tongwei, would double down on capability growths and set off substantial oversupply, successfully squeezing more recent entrants out of the marketplace.
Xiang Xu stated: “In Q4, as brand-new capability was launched, the cost variation ended up being more evident in between top quality makers and brand-new entrants.
