Indian Sugar Industry – Is Sugar turning bitter
November 7, 2012Steep German Electricity Price Rise fuels controversy over Erneubare Energien-Gesetz (EEG) and Industry Subsidy
November 7, 2012China has launched another probe into dumping of solar products, this time against Europe. Note China had earlier started investigation of dumping of solar raw material by Korean and US companies. However that probe is still ongoing despite US having imposed high CVD and AD duties on imports of Chinese made solar cells and panels. China is launching these probes not due to any major problem being faced by its manufacturers, but more due to the fact it needs something to counter duties and hurdles being placed against its billions of dollars of solar panel exports. China might hurt its solar industry more by placing anti dumping duties on polysilicon imports as the costs for its solar module companies will rise. The beneficiaries will be only a few surviving polysilicon manufacturers like Daqo, GCL, LDK while almost a thousand solar companies which use poly will lose out due to higher domestic prices.
China’s investigation into solar imports from US and Korea
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.
Europe is a 10x bigger solar market for China than USA
EU is a much bigger fight as China imports most of its production to Europe particularly countries like Germany and Italy. In fact, the Chinese solar growth has been largely driven by the solar subsidy policies in the European countries. Until last year, almost 95% of the Chinese solar panel production was exported to Europe. Europe accounts for almost 75% of the world’s demand of solar panels and has been instrumental in the growth of the Chinese solar industry. Note China accounts for less than 10% of the demand, while it supplies almost 60-70% of the global supply of solar panels. While the US was a small market comparatively, Europe is a huge market and the loss of this market will sound the death knell of the biggest Chinese companies.
The Global Green War had started with the US imposing duties on imports of Chinese made solar panels and cells. Subsequently dumping charges were also imposed on wind energy equipment made in China as well. China has not been able to do much against these duties as it exports almost 80-90% of its solar products. Though the Government is investigating the charges of cheap polysilicon imports from the USA , the Government has refrained from taking any action till now. The Chinese Government perhaps realizes that it does not want to get into a full scale war with the US considering the massive trade surplus it runs. However the Chinese Government does not want to get run down and has started making bigger noises. Today the Government of China criticized US for unfairly subsidizing six green energy projects against WTO rules.
China announced an anti-dumping probe Thursday of European exports of polysilicon used in making solar panels, adding to a flurry of trade disputes with the European Union and the United States.Beijing’s latest probe follows the EU’s launch of an investigation in September into whether Beijing was improperly subsidizing exports of solar panels. The Ministry of Commerce announcement gave no indication when a verdict might be issued.The Ministry of Commerce said it would look into whether European producers of silicon were improperly being subsidized or were dumping their goods, or selling them at unfairly low prices, in foreign markets.
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2 Comments
All parties involved need a way out…. PERU.
Peru has a Free Trade Agreement with the USA, EU, China, Korea and many other countries.
Peru could import “duty free” ALL components from all the above manufacturers, assemble them in Peru, generate jobs, create an industry to distribute all over Latin America and “export” the finished product!!
Chinese labor is getting expensive. Peruvian labor costs about the same as in China although there is no child labor and we respect our labor laws.
What do you think?? Pls send your ideas and suggestions. Jorge Meneses M.
a) Import and Export Costs would make it expensive if done for countries outside Latin America. If you import poly,export to China,import finished panels and then export again to Europe,the costs would add up a lot
b) You also need a big ancillary industry to support your main solar industry. Without economies of scale would not make sense
Hope this answers your questions. For more clarifications please mail at abhishek.solar@gmail.com