OCI Co., the world’s second-biggest maker of polysilicon used in solar panels, fell the most in more than three months in Seoul trading after Citigroup Inc. said Germany may cut industry subsidies by more than 20 percent.
The stock declined 6 percent, the most since Nov. 10, to close at 283,500 won on the Korea Exchange today. The benchmark Kospi stock index gained 1.1 percent.
Germany, the world’s biggest solar market, will probably reduce feed-in tariffs, the rate paid to owners of solar installations in the country, by at least 20 percent from April, Citigroup analysts led by Timothy Arcuri wrote in a report yesterday. Shares of LDK Solar Co., a panel maker based in China’s south-central Jiangxi province, and those of module manufacturer Yingli Green Energy Holding Co. declined yesterday in U.S. trading after the report was released.
“The possibility of a subsidy reduction in the world’s biggest solar market is darkening the outlook for polysilicon makers,” said Ahn Sang Hee, an analyst at Daishin Securities Co. in Seoul, who has a “neutral” recommendation on the stock. “The outlook is affecting investment appetite on OCI,” which is scheduled to boost its output capacity to the world’s biggest later this year.
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