* Wacker Chemie Q2 EBITDA 188 mln eur vs 169 mln Rtrs poll
* Wacker Chemie Q2 sales 1.15 bln eur vs 1.18 bln Rtrs poll
* Shares reach highest level since March 2012 (Adds analyst comment, detail, background, shares)
FRANKFURT, July 30 (Reuters) - German chemicals firm Wacker Chemie beat second-quarter earnings forecasts and said a plunge in the price of polysilicon, which it supplies to the crisis-hit solar sector, had come to an end.
Shares in the world's second-biggest producer of polysilicon jumped 7 percent to a 17-month high of 74.2 euros on Tuesday.
The price of polysilicon, which is needed to make solar cells, nearly halved in 2012 as years of government incentives in Germany and other countries artificially inflated demand for solar power equipment, thereby triggering massive oversupply and squeezing the margins of producers.
This led Hemlock Semiconductor, the world's largest polysilicon maker, and Norway's Renewable Energy Corp to review production plans, reduce working hours or cut jobs last year. Peers, including South Korea's OCI Co Ltd and China's GCL-Poly Energy Holdings, were also hit.
Wacker Chemie said the price of polysilicon had stabilised and was also encouraged by the settling of a trade dispute over the weekend between the European Union and China over solar cells and panels.
Following that deal, EU Trade Commissioner Karel de Gucht said on Monday there was a "window for discussions" to try to resolve disputes over Chinese imports of European silicon too.
Asia is a key market for Wacker Chemie and accounted for 39 percent of group sales in the second quarter.
"A quick and negotiated solution to the trade dispute would provide solar companies with transparent and reliable business conditions. Such a settlement could mark the start of another global photovoltaics (solar technology) upturn," Wacker Chemie said.
The company said its earnings before interest, tax, depreciation and amortisation (EBITDA) fell 22 percent to 188 million euros ($249 million) in the second quarter.
That beat analysts' average forecast of 169 million in a Reuters poll and was described by JP Morgan as "reassuring".
Second-quarter sales, however, were 1.15 billion euros, just below the average forecast of 1.18 billion, and Wacker Chemie trimmed its 2013 sales forecast to 4.5 billion euros, having previously targeted a figure close to last year's 4.63 billion.
At 0925 GMT, its shares were up 6.8 percent at 74.11 euros, the biggest rise on Frankfurt's midcap index.