Wacker Chemie Stock Slides on Report of Potential US Plant Closure

Shares of Wacker Chemie AG (WCHG) dropped on Wednesday after a report revealed the German chemicals group is considering the closure of its $2.5 billion polysilicon plant in Tennessee. The potential shutdown follows the loss of the facility's last remaining customers, a direct consequence of a recent U.S. trade policy that has rendered the plant commercially unviable, according to Reuters.

US Plant Viability in Question

The report, published Wednesday, stated that Wacker is weighing whether to shutter its facility in Charleston, Tennessee, which employs approximately 600 people. The potential move comes after the plant reportedly lost both of its remaining customers for polysilicon, a critical material for the solar and semiconductor industries.

The company declined to comment on the customer losses but faces the potential write-off of a major U.S. asset. The news follows earlier warnings from CEO Christian Hartel, who cautioned just before the U.S. policy change that the company might have "one plant too many" if the trade action did not provide meaningful support.

Unintended Policy Consequences

The customer defections are linked to a White House proclamation from August 6 that established a price floor and tariffs on imported polysilicon. According to the report, the policy failed to distinguish between foreign and U.S.-produced material, inadvertently putting Wacker’s American-made product at a commercial disadvantage.

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In a statement, Wacker acknowledged the proclamation "does not, as it reads now, effectively support the use of U.S. made polysilicon." The company confirmed it was in "active talks" with the U.S. administration to find a workable solution.

Market Reaction

Wacker Chemie's stock fell 2.8% to €92.13 in Frankfurt trading, after hitting a session low of €88.50. The decline occurred amid a broader negative sentiment in European markets, which were already under pressure from rising bond yields and inflation concerns.

The operational risk to a key facility adds significant pressure to a stock already trading well below its 52-week high of €105.60. The consensus analyst rating for Wacker Chemie is currently Neutral, providing little buffer to absorb negative surprises of this magnitude.