Hanwha Solutions surges 13% as US tightens curbs on Chinese solar products

South Korean solar stocks are rallying after the US government tightened restrictions on Chinese solar products. The gains reflect expectations that domestic companies with manufacturing operations in the United States or production bases outside China will gain a competitive edge if low-cost Chinese goods face greater barriers to entering the American market.

As of 10 a.m. Friday, Hanwha Solutions was trading up 13.82 percent at 34,600 won ($25), while OCI Holdings was up 7.17 percent at 261,500 won.

Overnight, US President Donald Trump announced import restrictions on polysilicon — a key raw material for solar panels — and related products. Starting Dec. 4, goods imported below a US-set minimum price will face additional tariffs, and a 15 percent tariff will apply to certain solar products. The market views the measures as an effort to block cheap Chinese goods from entering the United States and to foster domestic production and non-Chinese supply chains.

Hanwha Solutions, which has a US production base, and OCI Holdings, which produces polysilicon outside China, are widely cited as the primary beneficiaries of the new rules.

Hanwha Qcells, the solar arm of Hanwha Solutions, operates an integrated solar manufacturing complex known as the "Solar Hub" in Georgia, where it produces key solar components.

OCI Holdings produces polysilicon through a Malaysian subsidiary, which analysts say will largely shield it from the direct impact of the new restrictions.

"Hanwha Qcells has a domestic US production base, so it will be relatively less affected by these measures," said Hwang Seong-hyeon, an analyst at Eugene Investment & Securities. "If Chinese products face greater difficulty entering the US market, non-Chinese products are likely to maintain their price premium and profitability." He added that polysilicon produced in Malaysia would not be subject to the 15 percent tariff, giving OCI Holdings a relative competitive advantage.