Jiangsu Sunshine's subsidiary, Ningxia Sunshine Silicon Industry Co., Ltd. (Ningxia Silicon), is under scrutiny for potential violations, marking a bleak outlook for the polysilicon industry in China. The company has faced significant losses and is currently undergoing bankruptcy proceedings, reflecting broader challenges in the sector.
The Jiangsu Securities Regulatory Bureau recently issued administrative measures against Jiangsu Sunshine, citing improper disclosure of information regarding the shutdown of its Ningxia-based polysilicon operations. According to Jiangsu Sunshine’s Director Xu Weimin, the company delayed the announcement of the suspension until its 2012 financial report, which led to regulatory concerns. The regulator emphasized that a separate statement should have been issued immediately upon the shutdown.
Ningxia Silicon, once a key player in the polysilicon market, has struggled with severe financial losses. By 2012, the company had accumulated liabilities exceeding its assets, resulting in insolvency. Its annual loss reached 247.4 million yuan, with a gross profit margin of -21%. Despite initial investments and favorable geographical conditions, the project never achieved profitability due to volatile market prices and rising production costs.
Jiangsu Sunshine invested heavily in the project, holding a 65% stake in the joint venture. However, by 2012, the company had written off over 1.5 billion yuan in impairment provisions, contributing to a massive annual loss of 1.36 billion yuan. This highlights the deep financial troubles facing not only Ningxia Silicon but also the broader polysilicon industry.
Industry analysts suggest that the overall situation remains grim. With fewer than 10 operating polysilicon companies in China out of over 40, many are struggling to stay afloat. Production capacity is limited, and market prices remain low, hovering around $18 per kilogram. Although temporary anti-dumping measures have been imposed on imports from the U.S. and South Korea, the long-term impact on domestic prices remains uncertain.
Despite these challenges, some companies like GCL-Poly and Daxin Brand New Energy managed to thrive earlier in the market. However, others, such as Ningxia Silicon, failed to adapt to the rapid shifts in demand and pricing. As the industry continues to face uncertainty, it remains unclear whether the polysilicon sector will recover or if more companies will follow the same path.
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