As a precursor to restarting polysilicon production, China-based LDK Solar said it had completed a US$70 million upgrade to its plant in Mahong, Jiangxi.

LDK Solar said that its hydrochlorination re-engineering project had led to the production of trichlorosilane (TCS) during its first production run at the end of December, 2014.

The in-house production of TCS enables full-loop polysilicon production that can significantly lower production costs of the Siemens-based process.

LDK Solar stopped polysilicon production several years ago as the average selling price (ASP) of polysilicon fell below average production costs due to overcapacity and weak market demand.

Polysilicon ASPs had remained relatively stable in 2014 due to limited additional capacity coming online and strong market demand but ASPs are expected to decline slightly in 2015 as production costs are lowered and new planned capacity expansions ramp-up.

Restoring polysilicon production at LDK Solar would be expected to significantly support its financial restructuring process.