OCI Co. (010060), South Korea’s biggest polysilicon maker for solar cells, rose to a two-week high after a smaller rival filed for court receivership, triggering speculation an industry oversupply will ease.
Shares of OCI gained 2 percent to 152,000 won in Seoul trading, the highest close since Nov. 15. The benchmark Kospi index added 1.2 percent.
Hankook Silicon Co., which is unlisted, filed for receivership with the Seoul Central District Court yesterday because of deteriorating margins in the solar business, its parent Osung LST Co. (052420) said in a filing today. The spot price of polysilicon has been falling since February, dragging down the price of long-term contracts for the material derived from sand.
“The crumbling of a smaller rival eases concerns about industrywide oversupply,” Lee Eung Ju, an analyst at Shinhan Investment Corp., said by telephone today. “It’s still unclear whether demand could turn around.”
Osung LST tumbled 15 percent to 1,900 won, while the Kosdaq index, where the company is listed, gained 0.5 percent. S-Oil Corp., which also holds a stake in Hankook Silicon, slipped 2.1 percent to 97,200 won.
OCI shares have retreated 31 percent this year, compared with a 6 percent gain in the Kospi index.
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