Wacker Chemie’s Q1/2021 Polysilicon Sales Up 62% YoY

Strong Demand For Polysilicon & Higher ASP Help Germany’s Wacker Chemie Report 14% Annual Growth In Group Sales For Q1/2021

Wacker Chemie’s Q1/2021 Polysilicon Sales Up 62% YoY

Strong demand for solar grade polysilicon and higher prices helped Wacker Chemie improve its Q1/2021 sales (€298 million) as well as EBITDA (€51 million) for the business segment, explained the management. (Source: Wacker Chemie)

  • Wacker Chemie’s annual group sales and EBITDA increased in Q1/2021 for which the company believes one major reason is high demand and increased prices for solar grade polysilicon
  • Strong demand for polysilicon is depleting the company’s Chinese inventories and it is now shipping directly from Germany again
  • Management confirmed the group has no plans to expand polysilicon production capacity as of now
  • It has offered an upward revision to the group’s sales and EBITDA for 2021 riding strong on Q1/2021 results and continued demand for polysilicon

Wacker Chemie AG has reported 14% annual and 10% sequential increase in its group sales for Q1/2021, something the management has attributed mainly to high demand across its business segments, especially in construction materials and polysilicon divisions. According to the German chemicals and polysilicon manufacturer, higher prices for solar grade polysilicon helped lift sales for the group, something it was expecting (see Wacker’s 2020 Polysilicon Sales Up, But Group Sales Down).

In fact, demand for polysilicon is so strong that Wacker Chemie claims its inventories at its Chinese hubs are now ‘depleted’, and that it has started shipping directly from Germany again to meet customer requests.

No plans to expand capacity

Yet this higher demand is not enough to entice Wacker Chemie to expand its production capacity as Group CEO Rudolf Staudigl argued that his company may consider polysilicon production expansion only under ‘normal economic conditions’ meaning when the business is based on supply and demand, and is not ‘politically based’ referring to ‘trade conflicts’ in the space.

“And there are competitors that announced incredible capacities. Whether they will build them or not, I don’t know. But under these conditions, we are certainly not interested to build also incredible new capacities,” said Staudigl. “So we stay our course supplying the highest quality material and doing debottlenecking steps to keep up with the demand for the very high quality material.”

Polysilicon business in Q1/2021

The polysilicon business segment generated €298.3 million ($359 million) sales, reflecting annual growth of 62% and 22% growth from last quarter thanks to increased volumes and higher ASP for solar grade polysilicon during the reporting quarter. EBITDA for the division with €51 million ($61 million) was 12% higher than Q4/2020, and positive compared to €-14 million a year back.

EBITDA margin for the quarter was 17.1%, after -7.4% in Q1/2020, and 18.6% in Q4/2020.

Outlook for 2021

With strong business fundamentals in Q1/2021 and expecting ‘current positive trend’ for polysilicon prices, Wacker Chemie is bullish about its 2021 prospects. For polysilicon, it sees annual sales growing over 25% with EBITDA margins of over 20% for full year. Prices for solar grades are likely to remain firm during Q2/2021. “For the remainder of the year, we model with increasing price volatility,” it added.

The company has hence raised its annual forecast for group sales, expecting to increase by a low-double-digit percentage. It is a change from the company’s previous expected sales growth in the mid-single-digit percentage range.

For its annual group EBITDA, the management previously guided for 10% to 20% annual growth which it has now changed to 15% to 25% over 2020. “At the same time, however, even higher raw-material prices and negative exchange-rate effects are now likely to reduce full-year EBITDA by more than €200 million ($241 million) (previous forecast: more than €100 million). This has been factored into the current outlook,” it stated.

There is another upside to the company’s polysilicon business as high-efficiency HJT module Meyer Burger said it will purchase solar wafers from suppliers who use Wacker Chemie’s polysilicon as the Germany based cell and module maker tries to ensure its modules are made with raw materials sourced as much as possible within Europe (see Meyer Burger Concludes Wafer Supply Agreements).

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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