REC hanging on – barely

REC Silicon produced 1,775 mt of polysilicon, excluding fines and powder, in the third quarter compared to 3,634 mt in the second quarter of 2016. REC Silicon has a 2016 target of 10,800 mt polysilicon. Revenues for the third quarter of 2016 were $50.9-million, a decrease of 28.4% compared to $71.1-million in the second quarter of 2016. Lower revenues were primarily a result of 51% lower polysilicon sales volumes compared to the prior quarter. However, revenues from silicon gas sales increased due to a 27 percent increase in sales volumes.

REC’s access to Chinese markets continues to be restricted by the solar trade war between the US and China. In response, REC Silicon announced the curtailment of approximately 50% of the production capacity of the FBR facility in Moses Lake. FBR production will return to full capacity utilization when the trade dispute is resolved or when market conditions dictate.

Total polysilicon production in the third quarter increased to 3,903 mt (134% increase) compared to 1,671 mt in the second quarter of 2016. Production volumes increased due to the restart of FBR production capacity at the Moses Lake facility at the end of the second quarter. FBR cash production cost declined sharply to $9.90 per kg compared to $31.30 in the prior quarter. This decrease in cash cost demonstrates the impact of higher utilization rates to maintain industry leading cost per unit. FBR cash costs include a reduction in expense accrual estimates that lowered costs for the third quarter by approximately 90¢ per kg. Without these adjustments, cash cost for the third quarter would have been $10.80. Siemens solar grade and semiconductor grade polysilicon production decreased by 15% to 548 mt during the third quarter.

Silicon gas sales volumes increased by 27% during the third quarter of 2016 to 772 mt, near the announced target of 800 mt. Third-quarter 2016 silane gas sales prices decreased by 3.3% compared to the second quarter of 2016 due to competitive efforts to maintain market share and decreased demand for silicon gases in PV applications.

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