Intelligence
China to investigate U.S., South Korean solar materials imports
2012-07-20 14:45

China will open investigations into imported U.S. and South Korean solar-grade polysilicon, the country's trade ministry said on Friday, in the latest instance of growing tensions between major solar manufacturers.

The Ministry of Commerce said that it would open anti-dumping and anti-subsidy probes on U.S. imported polysilicon, as well as an anti-dumping probe on South Korean imports of the raw materials used to make solar products.

The ministry issued the decisions in two statements on its website, citing preliminary evidence from several companies -- GCL Poly-Energy Holdings, LDK Solar, and Daqo New Energy.

Chinese officials have threatened to impose trade duties on U.S. shipments of polysilicon if the U.S. moved to penalize Chinese solar companies.

Early this year, the United States put two new import duties totaling about 35 percent on solar equipment from China, citing the country's unfair support of its industry and illegal dumping of inventories in the U.S. market.

China's solar manufacturers such as Suntech Power Holdings STP.N, Yingli Green Energy YGE.N and Canadian Solar CSIQ.O have criticized the tariffs set this year as a threat to their young industry that will slow its growth by raising costs.

If punitive tariffs are adopted, it would likely impact importers such as U.S. polysilicon maker Hemlock, the world's largest, and South Korea's largest producer, OCI Corp. U.S.-based MEMC Electronic Materials would also be affected.

Though not in a trade war, China and the United States are vocal in their criticisms over the other's trade policies.

Washington says China's attacks are largely tit-for-tat retaliations for valid U.S. complaints, while China suggests the White House is simply "China-bashing" in an election year.

Research firm JI Asia analyst Felix Fok said downstream customers, such as wafer manufacturers, would struggle if China passed on the import tariffs against polysilicon imports.

"China is doing this because some of its companies are basically on their knees," Fok said, referring to more than a year of losses suffered by the sector.

Western solar companies have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper prices.

China's solar companies hold more than 60 percent of the global market. The U.S. market alone accounts for about 20 percent of sales of China's largest solar panel manufacturers.

The Coalition for Affordable Solar Energy, a U.S. group that represents solar installers, urged both the United States and China to avoid duties, saying tariffs from either end cost jobs and make solar energy less competitive against fossil fuels.

"Lowering, not artificially raising, the cost of solar should be a global goal," the group's president, Jigar Shah, said in an emailed statement.

 
Tags:China green energy
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