Daqo New Energy starts pilot production at expansion project

Chinese polysilicon maker Daqo New Energy Corp (NYSE:DQ) said today it has started pilot production at its Phase 3B polysilicon production facility in Shihezi, Xinjiang.

The Phase 3B facility is expected to ramp up to full production capacity by the end of the first quarter of 2019, increasing the company's total production capacity to 30,000 tonnes from 18,000 tonnes.

When Phase 3B achieves full capacity, a power purchase agreement with the local utility will cut the company's electricity rates by 18%, Daqo New Energy said. Thanks to factors such as lower electricity rates and greater economies of scale, the total cost of polysilicon production for the company's Xinjiang facilities is seen to fall to some USD 7.50 (EUR 6.50) per kg.

Daqo New Energy's Phase 4A capacity expansion project, currently under construction, is expected to begin pilot production in the fourth quarter of 2019 and ramp up to full production in the first quarter of 2020. This project will boost Daqo New Energy's production capacity to 70,000 tonnes, while the overall polysilicon production costs are expected to drop to USD 6.80 per kg.

The company has meanwhile launched a debottlenecking project to increase efficiency and production volume that is set to take its capacity to 35,000 tonnes by the end of June next year.

"Phase 3B will not only increase our capacity and reduce our costs, but also improve our product quality, allowing us to achieve production capability of approximately 80% mono-crystalline grade polysilicon, of which a half will be applicable for use in N-type mono-crystalline solar cells," chief executive Longgen Zhang said, adding that this demonstrates the company's long-term confidence in the solar photovoltaic (PV) industry.

(USD 1 = EUR 0.863)

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