China Seeks to Close Loophole on Solar Polysilicon Import Duties

China, the world’s biggest consumer of solar-grade polysilicon, will tighten up on imports of the material after solar manufacturers took advantage of a rule that allowed them to avoid duties.

From September, it will suspend applications from solar companies to import the polysilicon under so-called “processing trade” rules, whereby material used in domestic manufacturing is exempt from import duties if the finished product -- in this case solar cells used in panels -- is then exported.

Polysilicon imports under processing trade rules surged after China imposed duties on purchases from the U.S., South Korea and Europe, China’s Ministry of Commerce said in a statement on its website yesterday.

The suspension is “mainly aimed at U.S. polysilicon,” said Wang Xiaoting, a Hong Kong-based analyst at Bloomberg New Energy Finance, given the high tariffs imposed on imports from that country.

China in January listed anti-dumping charges of as much as 57 percent for imports from U.S. polysilicon makers including Hemlock Semiconductor Corp., REC Silicon ASA (REC) and SunEdison Inc. (SUNE)

To contact Bloomberg News staff for this story: Feifei Shen in Beijing at fshen11@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net Jason Rogers, Madelene Pearson

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