REC Silicon ASA unveiled the financial results for the first quarter of 2016 along with an announcement of to restart FBR production this year. At full utilization rate, FBR’s cash cost could be reduced to as low as near US$10/kg.
REC Silicon reported that the revenues of 1Q16 was US$68.8 million, lower than US$74.9 million in the previous quarter. The corresponding EBITDA during the first quarter was negative USD 13.4 million compared to negative USD 29.6 million in the previous quarter.
Finished goods inventory decreased by 1,925 MT during the first quarter, compared to a 131 MT inventory reduction in the previous quarter. REC Silicon expects that further inventory in the second quarter will be reduced, and the quarterly polysilicon production will increase to 2,020MT.
During the first quarter, the average sale price of solar grade polysilicon increased 6% from the previous quarter. Nonetheless, FBR cash cost reached US$24.8/kg due to lower production in Moses Lake fab, which was in curtailment.
REC Silicon plans to restart its Silane III unit and half rate FBR production later this month. The Silane IV unit and full rate FBR production will restart in June. For the full year 2016’s guidance, REC Silicon projects an annual production of 14,730MT, in which 11,770MT will be from FBR production.
"We have reduced our inventories and market conditions have improved to the point to enable us to restart production in Moses Lake,” said Tore Torvund, REC Silicon's CEO. “Further, the maintenance work that has been completed during the curtailment period should allow us to run the FBR unit as well as Silane III and IV for two years without an extended outage.”
Averagely speaking, REC Silicon expects a FBR cash cost of US$24.0/kg for Q2 and US$13.2/kg for full year 2016. The lowest cash cost expectation of FBR production is near US$10/kg.
Also , REC Silicon will continue decreasing reliance on Chinese market and increasing penetration of markets outside China, such as Taiwan.
In terms of the solar trade disputes between China and the U.S., REC Silicon expects stronger demand from U.S. solar market because of the ITC Extension. In the meantime, Chinese polysilicon makers are mostly at full capacity. MOFCOM and USTR are still under negotiations for the solar trade disputes.
REC Silicon additionally unveiled a joint venture formed with China’s YOUSER that aims to build the Yulin Plant, which is planned to have production capacity of 19,000MT granular polysilicon (with next-gen FBR-B technology), 300MT Siemens Polysilicon and 500MW Silane Gas Loading. The Yulin Plant is expected to start-up in the second half of 2017.
(source of the cthart: REC Silicon's financial report)