The logo of OCI Holdings is expected to benefit from the intensified sanctions imposed by the United States on China's polysilicon industry. OCI Holdings, a Korean company, is one of the three non-Chinese polysilicon manufacturers globally. On September 7, the U.S. Department of Commerce determined that certain Chinese companies were indirectly exporting solar modules through Southeast Asia. As a result, starting from June next year, the U.S. will impose a minimum 30% anti-dumping and countervailing duty on solar module exports from Chinese companies. This measure follows the U.S.'s previous restriction on importing polysilicon from the Xinjiang region due to human rights abuses against the Uighur minority. Now, polysilicon from other areas in China will also face sanctions.
Currently, there are only three non-Chinese polysilicon producers worldwide: Hemlock in the U.S., Wacker in Germany, and OCI Holdings in Korea. However, their combined production capacity falls short of meeting the demand in the U.S. A recent analysis by Chinese polysilicon manufacturer DAQO revealed that non-Chinese polysilicon supply only satisfies two-thirds of the U.S. demand. It is believed that establishing factories in the U.S. would cost more than ten times the current expenditure. Moreover, the European Union is planning to implement a forced labor prohibition law in the next two years, which could further weaken the position of Chinese firms in the global polysilicon market. Consequently, non-Chinese manufacturers may be able to supply polysilicon at relatively higher prices in the long term.
In conclusion, OCI Holdings is poised to gain long-term advantages as a result of the heightened sanctions on China's polysilicon industry by the United States. With only three non-Chinese polysilicon producers globally, OCI Holdings, along with Hemlock and Wacker, cannot fully meet the U.S. demand. The establishment of new factories in the U.S. would be costly, and the impending forced labor prohibition law in the European Union may further diminish the position of Chinese firms in the market. As a result, non-Chinese manufacturers might be able to supply polysilicon at higher prices in the future.