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Woohyun Lee, Chairman of OCI Holdings. (Photo=OCI Holdings) |
[Alpha Biz= Reporter Kim Minyoung] On July 5th, DS Investment Securities commented on OCI Holdings, stating that the price of polysilicon in China is falling and uncertainties are increasing due to the political situation between the United States and China. However, they added that these uncertainties might be resolved in the second half of the year, providing a buying opportunity. The investment opinion is "buy," but the target price has been lowered by 21% from 165,000 won to 130,000 won. The closing price from the previous trading day was 86,000 won.
According to DS Investment Securities, the price of polysilicon in China has fallen below $5 per kilogram, with over 300,000 tons of polysilicon stockpiled. Wafer manufacturers are also delaying polysilicon purchases due to severe oversupply.
Another concern is the potential end of the 200% tariff exemption on solar modules from Cambodia, Malaysia, Thailand, and Vietnam, which was implemented by the Biden administration in June 2022. Since major Chinese companies produce these modules in Southeast Asia for sale in the U.S., the imposition of tariffs could prolong the oversupply within China's value chain.
DS Investment Securities noted, "We expect the demand for polysilicon installations to be 608 gigawatts in 2024, and if installations reach 640 gigawatts, the demand would exceed the supply, potentially leading to a price increase. Even with conservative estimates, further price declines for polysilicon are unlikely."
Polysilicon production operated normally in April and May, but sales in June were weak due to uncertainties like the aforementioned tariffs, according to DS Investment Securities.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
