Leading polysilicon producer from China, Daqo New Energy saw its Q1/2023 revenues decline by over 17% QoQ and more than 44% YoY to $709.8 million as polysilicon ASPs dropped from $37.41/kg in the previous quarter to $27.83/kg as more polysilicon capacity comes online, easing the price pressure.
Management said that while polysilicon demand was weak in January due to seasonal slowdown in the PV industry, lower module prices in February stimulated demand which led to price improvement across the value chain.
CEO Longgen Zhang said, "Recently, we have seen a clear trend that the ASP gap between high quality and low-quality polysilicon has started to enlarge and the demand for high quality N-type products is increasing. We expect that this trend will enable us to differentiate ourselves from our competitors based on our high quality and low-cost polysilicon ready for the next-generation N-type technology."
Daqo produced 33,848 metric ton (MT) polysilicon in the reporting quarter, at an average production cost of $7.55/kg, down from $7.69/kg in Q4/2022 which was mainly due to a reduction in the procurement cost of metallurgical grade silicon powder. It sold 25,284 MT in the quarter.
The company's net income for the quarter reduced to $278.8 million, down from $332.7 million in Q4 and $535.8 million last year. While gross profit declined to $506.7 million, its gross margin was 71.4%.
Daqo completed the construction of its Phase 5A 100,000 MT polysilicon project in Inner Mongolia in April and expects to ramp up production to full capacity by the end of June 2023. Its total polysilicon nameplate capacity will then increase to 205,000 MT/year.
In Q2/2023, Daqo guides to produce approximately 44,000 MT to 46,000 MT, reflecting a quarterly increase of 30% to 36%, and 193,000 MT to 198,000 MT for full year 2023. It will be an annual jump of 44% to 48%.