Major polysilicon producer, REC Silicon, has said polysilicon production in 2014 would be lower than 2013 levels due to outages at its Silane II and IV facilities.

The former business unit of Renewable Energy Corporation (REC) reported polysilicon production in 2013 of 19,764MT, down from a peak in 2012 of 21,405MT.

REC Silicon said that it was targeting production of 19,400 MT, a slight decrease compared to 2013, due to the outages and shutdown of its Silane I facility and increasing silane gas sales, due to production halts after an explosion and fire at Mitsubishi Materials polysilicon plant in Japan.

REC Silicon also noted that there were no plans in 2014 to reopen its shuttered Siemens-process polysilicon plant at its Moses Lake facility.

The company said that polysilicon production in the first quarter of 2014 would be around 4,340MT.

FBR polysilicon

However, the company noted that its FBR (fluidised bed reactor) polysilicon had continued to ramp in 2013, reaching production of 16,145MT, up from 15,307MT in 2012.

Significantly, FBR-made ‘prime’ polysilicon was claimed to have achieved quality and pricing par with conventional Siemens process made polysilicon. FBR polysilicon had originally been produced at lower quality levels, resulting in lower ASPs.

Prime FBR production had increased from 9,088MT in 2012 to 12,748MT in 2013 and equated to 84% of production in an independent analysis in July 2013.

Management noted in a conference call to discuss fourth quarter results that it would be marketing three grades of FBR polysilicon in the future with increasing quantities being produced at the prime quality level. The quality improvements were also said to have been achieved through improvements in process stability, increased reactor run lengths.

Through continuous process improvements and cost reduction strategies, REC Silicon said that overall FBR production costs had been lowered to US$18.4/kg at the end of 2013. Overall FBR production costs in 2012 had been US$20.5/kg. FBR cash cost had been lowered to US$10.5/kg, compared to US$12.1/kg in 2012.

However, due to the silane supply issue, cash costs are expected to increase to US$12.8/kg in the first quarter of 2014 and average US$11.7/kg in 2014.

Financial results

REC Silicon US Operations reported fourth quarter revenues of NOK 752 million (US$122.9 million), a slight increase from US$120.3 million in the prior quarter.

The company reported EBITDA of NOK187 million (US$30.4 million) up from NOK80 million in the previous quarter. Higher average polysilicon selling prices and increased silicon gas sales volumes contributed to the increase.

REC Silicon reported an operating loss in the quarter of US$3.1 million and an overall loss of US$26.3 million.

Tore Torvund, CEO of REC Silicon ASA said: "I am pleased that our efforts to improve quality and reduce cost continue to strengthen our competitive position. Together with slightly increased demand for solar polysilicon, these efforts have led to an improvement in REC Silicon ASA's EBITDA in the last quarter."

Management noted in the call that despite anti-dumping duties on its polysilicon imports into China, it continued to ship increased quantities of polysilicon to China and was gaining market share in Taiwan.

As expected, REC Silicon noted that it continued to work with Chinese customers under ‘Process in Trade’ custom laws to avoid duties were possible. Material imported and then exported as finished product has for many years been a route to limit duties.

However, the company noted that both political and diplomatic negotiations between the US and China over the polysilicon anti-dumping duties were ongoing.