Wacker Chemie AG said prices of polysilicon, the material used in most solar panels, are on their way up after the photovoltaic industry stopped running down inventories.
Spot prices rose in January after solar-cell, wafer and module makers increased production and ordered more polysilicon, easing the build-up of stocks, Chief Executive Officer Rudolf Staudigl said today on a conference call with reporters.
“The poly market appears now more robust than it looked in December and shipments have picked up again,” Staudigl said after the Munich-based company reported full-year and fourth-quarter profits that missed analyst estimates on weak demand.
Polysilicon makers such as Wacker and GCL-Poly Energy Holdings Ltd. boosted output in 2011, producing more than could be absorbed by demand for solar panels and creating a glut that took prices below production costs for most manufacturers.
The company, which mostly sells polysilicon through long-term contracts, said contract prices remain above spot market prices. Wacker renegotiated the contracts with most customers so its market share should stay the same, according to Staudigl.
The company expects margins on earnings before interest, tax, depreciation and amortization in its polysilicon business of below 40 percent, Chief Financial Officer Joachim Rauhut said. Global photovoltaic installations reached about 25 gigawatts last year, Wacker said.
While demand for panels boomed last quarter, reducing stockpiles and helping stabilize polysilicon prices, consumption will be “about flat” this year, Jenny Chase, head of solar analysis at Bloomberg New Energy Finance, said Jan. 13.
Wacker fell 1.8 percent in Frankfurt to 66.07 euros as of 3:24 p.m. local time.