GCL-Poly Energy Holdings Ltd, the world’s largest manufacturer of polysilicon and wafers used to make solar cells, said first-half profit fell as a supply glut pressured product prices.

Net income in the six months to June was HK$825.7 million (€95 million), down from HK$900.4 million a year earlier, the Hong Kong-based company said in a regulatory filing. Sales rose more than 4 per cent to HK$17.9 billion. “The polysilicon price in China dropped persistently in the first half of this year, causing huge losses across the global polysilicon industry,” GCL-Poly said.

Polysilicon prices have tumbled by a quarter to about $16/kg in the past year, compared with a peak of almost $80 in 2011. The decline is the result of an oversupply of the raw material and competition from imports. New capacity to be added by Wacker Chemie AG of Germany and OCI Co of South Korea may continue to pressure prices and make it more difficult for smaller producers to compete, according to Bloomberg Intelligence.

China’s government forecasts consolidation will accelerate among solar companies, which are struggling to tackle a shift in market conditions. Firms with the strongest technology, capital, management and brands are best equipped to benefit from market opportunities, the government has said. –(Bloomberg)