Sun sets on polysilicon unit after prices fall
Source: Bloomberg News |
February 1, 2013, Friday
|
Print Edition
Print Edition
JIANGSU Sunshine Co, a Chinese maker of textile products and raw material for solar panels, filed for bankruptcy at its polysilicon unit following a price fall.
Ningxia Sunshine Silicon Co, of which Jiangsu Sunshine owns 65 percent, is unable to operate because production costs are far higher than selling prices, the parent said in a statement to the Shanghai Stock Exchange. The insolvency petition, the nation's first by a listed solar company, was filed through the Shizuishan Intermediate People's Court.
A supply glut dragged down the average spot price of polysilicon by 43 percent in the past year and gutted gross margins, according to data compiled by Bloomberg News. The tumble led companies including Ningxia Sunshine and units of Baoding Tianwei Baobian Electric Co to halt production and prompt GCL-Poly Energy Holdings Ltd, the world's biggest maker of polysilicon, to stop expansion last year.
"Many small Chinese polysilicon makers don't have the research and development capability to upgrade the process and lower the cost," said Wang Xiaoting, a Beijing-based analyst at Bloomberg New Energy Finance. "Even if extra tariffs were imposed on imported polysilicon and spot prices rose, these companies won't be saved as the prices would still be much lower than their costs."
Ningxia Sunshine can't repay debt, which includes 1.3 billion yuan (US$209 million) owed to Jiangsu Sunshine. The unit had a 247.4 million yuan loss last year, and the parent sees a deficit in 2012, against an 8.7 million yuan profit a year earlier.
Ningxia Sunshine Silicon Co, of which Jiangsu Sunshine owns 65 percent, is unable to operate because production costs are far higher than selling prices, the parent said in a statement to the Shanghai Stock Exchange. The insolvency petition, the nation's first by a listed solar company, was filed through the Shizuishan Intermediate People's Court.
A supply glut dragged down the average spot price of polysilicon by 43 percent in the past year and gutted gross margins, according to data compiled by Bloomberg News. The tumble led companies including Ningxia Sunshine and units of Baoding Tianwei Baobian Electric Co to halt production and prompt GCL-Poly Energy Holdings Ltd, the world's biggest maker of polysilicon, to stop expansion last year.
"Many small Chinese polysilicon makers don't have the research and development capability to upgrade the process and lower the cost," said Wang Xiaoting, a Beijing-based analyst at Bloomberg New Energy Finance. "Even if extra tariffs were imposed on imported polysilicon and spot prices rose, these companies won't be saved as the prices would still be much lower than their costs."
Ningxia Sunshine can't repay debt, which includes 1.3 billion yuan (US$209 million) owed to Jiangsu Sunshine. The unit had a 247.4 million yuan loss last year, and the parent sees a deficit in 2012, against an 8.7 million yuan profit a year earlier.
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