Chinese Silicon Producer Issues Profit Warning For 9M 2024

GCL Technology says polysilicon prices well below production cash cost for the entire industry
GCL
GCL Tech shows the tax-inclusive ASP for FBR granular silicon declined from RMB 55.05/kg in Q1 2024, to RMB 32.75/kg in Q3 2024. (Photo Credit: GCL Technology Holdings Limited)
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Key Takeaways
  • GCL Technology expects to report unaudited net loss of RMB 2.97 billion for 9M 2024  

  • It blames this on significant decline in the ASPs of polysilicon and silicon wafer products  

  • It produced 198,300 tonnes of FBR granular silicon, and shipped 207,300 tonnes during the reporting period 

The world’s leading silicon producer from China, GCL Technology Holdings Limited, has issued a profit warning, expecting to report an unaudited net loss of RMB 2.97 billion ($417.68 million) for the period between January and September 2024.  

According to the company’s stock exchange announcement, this unaudited loss was incurred as RMB 1.512 billion in Q2 and RMB 1.492 billion in Q3 this year, compared to a RMB 0.033 billion net profit in Q1.  

GCL Tech attributes this loss primarily to the average market selling prices of polysilicon and silicon wafer products that significantly declined during the initial 9 months of 2024.  

According to the management, “In the second half of 2024, the prices of polysilicon fall below the production cash cost for the entire industry, the industry maintains low levels of operation with a roughly balanced supply and demand.”  

During 9M 2024, it produced 198,300 tonnes of FBR granular silicon while shipping 207,300 tonnes. The production cash cost for the 3 quarters, including R&D cost, was RMB 37.84 ($5.32)/kg in Q1, RMB 35.19 ($4.95)/kg in Q2, and RMB 33.18 ($4.67)/kg in Q3.   

On the other hand, its shipment volumes were distributed as 65,200 tons, 61,200 tons, and 80,900 tons in Q1, Q2, and Q3, respectively.  

The average tax-inclusive selling prices for FBR granular silicon during the initial 3 quarters were RMB 55.05 ($7.73)/kg, RMB 35.52 ($4.99)/kg, and RMB 32.75 ($4.60)/kg, respectively.   

Nevertheless, the management is optimistic for the future. Chairman Zhu Gongshan said, “The sales of the Company’s granular silicon products are robust, and cash cost continues to be optimised. The Company’s technological improvements have been partially completed, and the capacity utilisation has bottomed out and rebounded, positioning it to be among the first to overcome industry challenges and lead the sector into a new development phase.”  

The company is expanding its manufacturing footprint outside of China with a polysilicon production plant in the UAE (see ‘Largest’ Polysilicon Production Plant Outside China).  

At this year’s Intersolar Europe, GCL Technology’s parent GCL Group promoted its latest perovskite modules that it showcased to TaiyangNews (see GCL’s Latest Module-Level Perovskite Product Offerings At Intersolar Europe 2024). 

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