How GCL, LDK and and Renesola could benefit from the US- China Solar Trade War

The US imposition of duties on Solar panel imports from China has raised the hackles of the Chinese Government which considers the solar industry to be strategic to its future growth. While it will not affect the Chinese exports in a big way considering the easy workarounds, it has the potential of making the Chinese government react negatively. The biggest losers could be the Polysilicon companies and Solar equipment suppliers based in the USA . Note China imports huge volumes of the polysilicon raw material used in solar panels from USA and South Korea. The reason being the the quality made in those countries is better and the costs are lower. With the polysilicon spot prices crashing to below cost around around low $20/kg levels, US and Korean companies are being forced to change their LT contracts which were stuck at higher levels.

The US government recently imposed anti-dumping duties against the Chinese solar panel companies with the total quantum of duties to reach around 35-36% for most the Tier 1 Chinese solar panel players. This is more than what was expected by the solar industry and has led to a vociferous protest from sections of the Chinese government . Not surprisingly , a large chunk of the USA Solar Industry too has protested these duties. Many of the solar companies are in the installation segment where cheaper solar panels from China means more profits and more sales. What is not very well known outside the solar industry is that a major percentage of sales of US polysilicon companies and solar equipment firms goes to China. US Polysilicon Companies like Hemlock as well as factories of European companies like Wacker, REC fear the worst . Chinese polysilicon companies have closed down due to their higher costs due to stiff competition from non-Chinese players. The Chinese government has a big reason to retaliate against the US solar poly companies now that its solar panel organizations have been hit. The overall effect of the duties on Chinese solar panel companies will not be that big as they already have plans to circumvent the US duties which have been prepared long time ago. All it would do is raise the prices of the solar panels slightly .It would not make the surviving US solar panel companies competitive as the Chinese solar panel prices are far below that of US made solar panels. US Solar equipment companies like Applied Materials and GT Advanced Technologies too might face the ire of the Chinese government and companies who could look at alternatives in Europe

According to Digitimes , the way it is being done is by these polysilicon companies selling additional quantities at $10/kg which is less than 50% of the cost. This gives the Chinese trade authorities concrete evidence if they decide to impose anti dumping duties on polysilicon imports. Not only 5-6 polysilicon companies in China continue to operate due to the price crash. These companies like Renesola, LDK , GCL, Daqo New Energy will benefit massively if the government imposes duties. These companies will see their selling prices go up by 30-50% and also their volumes go up by a large amount which will allow them to utilize their full capacity.