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Chinese Companies who stand to benefit from European duties on Chinese Solar Panels

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Chinese put pressure on Europe

The European Chinese solar trade saga took an important turn when the EU imposed a 11% duty on imports of Chinese made solar Solar Panelspanels in Europe. Though the duty is small, it is quite broad as it will impose duties on any Chinese made solar products into Europe. The Chinese solar industry has 2 months to negotiate with Europe, otherwise the duties will increase 3-4 fold by August 6. China is already hardening its position and the top echelons of the government are preparing a response. Here are some ways in which the Chinese are already starting to exert pressure on the Europeans:

1) China has already starting exerting pressure by starting a dumping subsidy on imports of wine from Europe (a critical export for France).

2) Put more pressure on Merkel and other top European countries that depend on exports to China.

3) Give concrete action to the anti dumping investigation on imports of polysilicon from US, Europe and Korea.

Read on GWI 11.8% provisional duty on Chinese produce, temporary relief for Chinese Solar Panel Manufacturers.

The 3rd point is the only one which is directly related to the solar industry. Note while China is strong in all parts of the supply chain, it imports large quantities of polysilicon from other countries. Domestic poly makers do not produce very high grade cheap polysilicon which is made by a handful of Western companies like Hemlock, Wacker and Sunedison. The Chinese companies with large polysilicon operations like GCL, Daqo and Renesola will benefit from these duties. Tons of small poly firms in China have shut shop, unable to compete with the below cost prices of poly being sold by the larger players. GCL Poly which is one of the biggest producers has also been showing large losses as prices have gone below cost due to a major glut. A number of poly plants in Italy and Japan have already closed due to the super low prices.

However, do not expect poly prices to appreciate crazily, as the companies will find ways to circumvent these restrictions. The solar panel companies can either start making some of their cells and panels outside (Taiwan, Malaysia), or they could buy wafers from outside instead of polysilicon. The Taiwanese companies as usual should be the biggest beneficiaries.

Digitimes

China anti-dumping duties to drive up solar polysilicon devices, says IHS

The likely imposition of the import duties will cause global solar polysilicon pricing to rise to US$19.50/kg in June and July, up from US$16.50/kg in May, according to IHS. This represents a major turnaround for a polysilicon market that has seen average pricing decline for seven of the last 10 months.

“IHS believes China is likely to impose anti-dumping tariffs with rates ranging from 30-50% on polysilicon imported from the EU, the US and South Korea,” said Glenn Gu, senior analyst, photovoltaics, at IHS. “However, the impact of the duties will be mitigated by factors including long-term agreements (LTA) that stabilize pricing as well as efforts by buyers and sellers to bypass the tariffs.”Meanwhile, it will be difficult for China-based mid-stream players to accept polysilicon prices above US$20.50/kg from the spot market in China with continuous cost pressure from downstream supplier.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

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