OCI considers shifting polysilicon capacity to semiconductor use

Polysilicon EBITDA margins of OCI, Wacker and REC Silicon from Q3 2017 through Q3 2018
Weak polysilicon demand sent OCI’s basic chemical EBITDA margin into red territory in the third quarter – Chart: Bernreuter Research

Like its German peer Wacker, South Korean chemicals group OCI has taken a hit from the slump of demand for solar-grade polysilicon in recent months. The EBITDA margin of OCI’s basic chemicals division, which includes polysilicon, tumbled to minus 2.0% in the third quarter of 2018, down from 19.4% in the previous quarter and 18.8% in the prior year period.

In view of the weak demand, OCI brought forward the annual maintenance at its Korean polysilicon plant from November to July. The debottlenecking project at the PS2 facility of its Malaysian plant was completed in the third quarter, increasing the production capacity from 13,800 metric tons (MT) to 17,000 MT.

OCI announced it would adjust the utilization rate of its polysilicon plants to the market situation in the fourth quarter. However, revamping of the PS1 facility in Malaysia with a capacity of 10,000 MT would be completed by the end of Q1 2019 as planned.

As the electricity rate in Korea is higher than that in Malaysia, OCI mulls shifting part of its Korean polysilicon capacity to semiconductor applications. “If the [polysilicon] price stays below our cash cost, we have to think about all options,” CEO WooHyun Lee said.

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