RPT-UPDATE 1-China to slap anti-subsidy duties on U.S. solar material

Mon Sep 16, 2013 6:12am EDT

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BEIJING, Sept 16 (Reuters) - China said on Monday that it would impose preliminary anti-subsidy duties on some imports of U.S. solar-grade polysilicon, a move that could intensify trade tensions between the world's two largest economies.

China's Commerce Ministry said it would hit U.S. imports of the material used to make solar panels with relatively low duties of up to 6.5 percent, amid trade frictions in the struggling global solar industry.

That follows the ministry's much heftier anti-dumping duties - used for goods sold below market value - of 53.3 to 57 percent on U.S. polysilicon in July, a move which many saw as a bid to protect China's struggling domestic industry. Washington called those duties disappointing.

According to its investigation, "subsidies exist and China's polysilicon industry suffered substantial harm", the ministry said in a statement on its website.

Beginning on September 20, importers of polysilicon from Hemlock Semiconductor Corp and AE Polysilicon Corp will have to pay the duties.

The ministry said other companies, including REC Solar Grade Silicon LCC, REC Advanced Silicon Materials LCC, and MEMC Pasadena Inc., would not be subject to anti-subsidy duties because they had not been subsidised or the rates were too low.

China has also locked horns with the European Union and South Korea over the solar industry.

European companies accuse Chinese rivals of benefiting from unfair state aid, allowing them to dump about 21 billion euros ($28 billion) worth of solar panels at below cost in Europe last year, putting European firms out of business.

Europe planned to impose heavy tariffs on Chinese solar panels but, wary of offending China's leaders and losing business, a majority of EU governments - led by Germany - opposed the plan, which led to the compromise deal in July.

EU governments must decide in December whether to back the July price deal.

China's polysilicon sector, which has around 40 companies employing 30,000 people and has received investment of 100 billion yuan ($16 billion), suffers from low quality and chronic over-capacity as local governments poured in money to feed a fast-growing solar panel industry.

Demand for solar panels has eased since the global financial crisis, forcing governments worldwide to slash solar power subsidies and leaving China sitting on idle capacity and mounting losses.

Of the 69,000 tonnes of solar-grade polysilicon China consumed in January-June, 41,000 tonnes were imported, according to industry data. China's solar panel makers prefer imported polysilicon, which has a higher purity that helps in energy conversion, company executives say.

Domestic business lobbies have been a major force pushing the Commerce Ministry to curb polysilicon imports that exceeded $2.1 billion in 2012.

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Comments (1)
s.veritas wrote:
“The tariff might have started as a retaliatory action against the United States and its move to level the playing field for domestic solar module manufacturers. The U.S. initiated the 30 percent tariff in response to formal complains from U.S. manufacturers that Chinese producers were selling their solar panels in the U.S. for less than they cost to build.

It might have started out that way, but the country’s leadership clearly took a strong look at the industry domestically and found plenty of room for improvement. Analysts say the move is likely to cull the industry in China of inefficient producers of poly-silicon.“ CleanTechAuthority.com

In regards to the selling below cost dumping charges that started this solar war, in a published report, the Energy Laboratory (NREL) and Massachusetts Institute of Technology (MIT) found that China’s historical advantage of low-cost labor was counteracted by other regional influences, and that the dominant reason behind its success is primarily the scale of economies in solar panel manufacturing, enabled by access to capital and a less restrictive business and regulatory environment.”

Even if true, is subsidized solar panel manufacturing in China or subsidized poly-silicon manufacturing here in the U.S. really “bad” for the environment or for U.S. consumers? I though the subsidies were purposeful incentives meant to spur the green energy movement in light of global climate change.

The solar firms in China were buying all the poly-silicon and the manufacturing equipment from the West, and the consumers in the West were buying panels from the East at a cheaper price which resulted in significant job creation in the panel installation industry worldwide.

Who is really behind this trade tiff? Is it really hard to believe that it is not the usual suspects of energy companies whose business model is dependent on carbon fossil fuel consumption? The oil companies seem like the only folks who are benefiting from this absurd trade war on solar energy.

Sep 16, 2013 1:42pm EDT  --  Report as abuse
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