Daqo New Energy Corp. Q2 2026 Earnings Recap

Shares fell 3.3% following earnings as investors reacted to continued pricing pressure and margin compression amid weak demand and elevated inventory levels in the polysilicon market. Despite increased production and sales volumes, the company faces prolonged below-cost pricing and cautious demand outlook, dampening near-term profitability.

Key Takeaways

• Polysilicon production volume exceeded guidance at 43,675 metric tons, up from prior quarter, but average selling price declined to $4.04/kg, remaining below production cost of $5.95/kg.
• Sales volume surged from 4,482 to 15,190 metric tons in Q2 after adopting a more market-oriented sales approach in June.
• Cash cost slightly improved, declining 0.4% sequentially to $4.57/kg, but cost reductions failed to offset ongoing price declines.
• Market-wide low utilization and inventory pressure persist, with aggregate output decreasing 9.8% year-over-year, reflecting continued industry oversupply and subdued demand.
• Regulatory efforts and industry self-regulation initiatives aim to curb below-cost sales and improve pricing discipline, but near-term recovery remains uncertain.