Polysilicon Industry Insights: Contradictions on Overcapacity, Pricing, and Demand in 2025 Q1

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Earnings and Industry Challenges:
- Daqo New Energy reported a net loss of $71.8 million for Q1 2025, compared to a loss of $180 million in Q4 2024.
- The loss was primarily due to the solar PV industry facing persistent overcapacity and polysilicon prices remaining below cash cost levels.

Production and Pricing Trends:
- The company operated at a reduced utilization rate of 33%, producing 24,810 metric tons of polysilicon, slightly below guidance.
- Sales volume reached 28,008 metric tons, exceeding production, and enabling a reduction in inventory.
- Polysilicon prices remained stable between RMB 37 to RMB 42 per kilogram, with N-type polysilicon from top players at RMB 41 to RMB 42.

Financial Position and Liquidity:
- Daqo New Energy maintained a strong balance sheet with $2.15 billion in quick assets, providing ample liquidity.
- The company had a cash balance of USD 792 million, short-term investments of USD 168 million, and bank notes receivable of USD 63 million.

Market Conditions and Policy Impact:
- Industry-wide capacity utilization was approximately 50%, with domestic polysilicon production volume below 100,000 metric tons for January and February.
- The introduction of a market-based reform policy for new energy on-grid tariffs is expected to impact future electricity prices and project revenues.

Long-Term Growth Strategy:
- Daqo New Energy plans to capitalize on the global solar PV market by enhancing higher-efficiency N-type technology and optimizing cost structures through digital transformation and AI adoption.
- The company aims to maintain its position as one of the world's lowest-cost producers with a strong balance sheet.