South Korea-based polysilicon supplier OCI has cancelled all three of its long-term supply contracts with Suntech’s Chinese operations in response to subsidiary Suntech Wuxi entering bankruptcy proceedings.
OCI said in a statement that the outstanding balance of the long-term contracts stood at US$1.36 billion. Two of the contracts go back to 2008 when polysilicon was in chronic short supply. The most recent contract was signed in 2011.
However, the company noted that it would attempt to continue to service Suntech Wuxi with polysilicon supplies as the company works on restructuring its operations. Suntech Wuxi was a major customer of OCI.
According to reports, Suntech Wuxi would have accounted for approximately 9% of OCI’s 2012 total revenue. A company spokesperson was said to be unable to reveal the sum of outstanding payments of Suntech Wuxi to OCI.
OCI recently announced first quarter 2013 polysilicon sales of approximately US$200 million.