|Workers install solar panels in Uganda.
Source: Associated Press
Polysilicon sales at Wacker Chemie AG fell 27% in 2018 after China threw the global solar industry into turmoil by enacting new policies to slow growth in the sector's biggest market.
"[Demand] for solar modules in China and prices along the entire value chain corrected downwards" after Beijing cut support for solar project development, Wacker Chemie President and CEO Rudolf Staudigl said on a March 19 earnings call. "We experienced significantly lower shipments and lower average prices." Polysilicon is a key raw material in solar panels.
Germany-based Wacker Chemie reported €823.5 million in polysilicon sales in 2018, compared to €1.12 billion in 2017. Overall net income fell to €260.1 million, or €4.95 per share, from €884.8 million, or €17.45 per share, a year earlier, the specialty chemical maker said. The 2017 results included proceeds from selling down Wacker Chemie's stake in silicon wafer manufacturer Siltronic AG.
The company expects "a strong increase" in polysilicon sales in 2019 as the solar market grows by an estimated 10% to 20%, Staudigl said. However, prices for solar-grade polysilicon are likely to be "markedly lower," which would weigh on earnings, the company said.
"If there are new [polysilicon] capacities coming onstream, that certainly has an influence on market pricing," Staudigl said. "On the other hand, we see some ... older capacities also being shut down, especially in the east of China. And we certainly see the industry growing. So at a certain point in time, when exactly we do not know, there will be a balance again."
Other executives and analysts also are forecasting considerable solar market growth this year, thanks to price declines in 2018 that increased demand outside of China and new draft policies from Beijing that would renew industry subsidies.
"[Markets] all over the world will continue to grow" as solar becomes more cost competitive, Staudigl said. However, he added, the expansion will require companies to "refocus from volumes to profitability and efficiency."