Endemic overcapacity and continued price declines towards manufacturing cost levels within the polysilicon sector have forced Korea’s largest poly producer to delay previously announced plans to build further plants. OCI is estimated to have reached an annual capacity of 42,000MT at the end of 2011 and had plans to reach 62,000MT with contributions from its 20,000MT P4 plant and a 24,000MT P5 plant that was revealed in April 2011, with the project expected to be operational at the end of 2013.

It is unclear whether both plants have been delayed, which were expected to contribute to OCI reaching nameplate annual capacity of 86,000MT by 2013.

Polysilicon prices have continued to fall from above US$30/kg at the beginning of the year to around US$23/kg in May 2012. Over the last 12 months, falling ASPs have reduced OCI’s revenue from polysilicon sales by 50% and are now approaching levels where margins completely disappear. 

OCI follows another recent entrant, GCL-Poly in rapidly expanding poly production over recent years, yet the overcapacity situation means both companies have no plans to add further capacity in 2012.

Comments