The world’s two largest Chinese solar silicon material companies have said they will lower production because of price declines due to the downward trend in the photovoltaic industry.
Tongwei Group will halt production at the high-purity polysilicon production bases in Yunnan and Sichuan provinces operated by four subsidiaries, the Chengdu-based company announced yesterday. During the suspension, technical renovation and maintenance will be done to achieve phased and orderly production reduction and control.
Daqo New Energy will gradually launch phased maintenance work at its high-purity polysilicon production lines and bases in Xinjiang Uygur Autonomous Region and Inner Mongolia Autonomous Region and initiate production cuts and control of some production lines, the Shihezi-based firm said in a statement yesterday.
Prices of products along the solar industry chain have plunged this year, mainly because of increased supply, according to statistics from the China PV Industry Association. Among them, the price of polysilicon has shrunk by over 35 percent.
Neither Tongwei nor Daqo provided details about how much production capacity they will cut, but both indicated that the moves will help reduce their operating losses.
Tongwei has an annual production capacity of over 900,000 tons of high-purity solar silicon materials, while Daqo has about 305,000 tons. They rank first and second globally by annual polysilicon production capacity.
Tongwei reported a net loss of nearly CNY4 billion (USD548 million) in the first three quarters of this year, compared with a net profit of CNY16.3 billion (USD2.2 billion) a year earlier. Daqo turned a net profit of CNY5.1 billion to a net loss of CNY1.1 billion in the period.
The combined inventory of Chinese polysilicon producers is about 278,000 tons, which should take two to three months to digest, Yicai learned from industry insiders.
While leading enterprises are cutting production, smaller silicon material companies are keeping relatively low operating rates, so insiders expect the overall silicon material inventory to gradually decline from this month.
（Picture: Veer）
