China, the world’s biggest solar-module maker, plans to impose tariffs of as much as 57 percent on polysilicon shipped from the U.S. and South Korea, saying it wants to stop the product from being sold below cost.
The U.S. units of Renewable Energy Corp ASA are among companies to receive the highest rate of tariff and South Korea’s OCI Co. will have the lowest at 2.4 percent, according to a statement on the Chinese commerce ministry website yesterday. Importers of the raw material to make solar panels must pay the duties beginning July 24.
The decision marks the preliminary ruling of a probe opened last year. The investigation is a response to a U.S. decision in 2012 to impose tariffs of as much as 250 percent on Chinese solar panels after a plunge in prices led to the bankruptcy of manufacturers such as Solyndra LLC, which was based in Fremont, California.
The Chinese ruling is “positive” for domestic polysilicon manufacturers such as GCL-Poly Energy Holdings Ltd. because it may reduce supplies from abroad, boosting prices for the raw material in China, Timothy Lam, a Hong Kong-based analyst with Citigroup Inc. said yesterday in a note to investors.
It may also spur further talks between China and the 28-nation European Union to iron out a separate trade dispute over solar pricing, the analyst said.
The U.S. opened its probe in 2011. China’s polysilicon industry suffered “material damage” because of the dumping of polysilicon, according to the ministry. The average price of modules fell 20 percent last year, and polysilicon was down 40 percent.
The highest tariff “on any company will be a fairly difficult blow,” Michael Parker, a Hong Kong-based analyst at Sanford C. Bernstein & Co. said yesterday by phone. “There’s no way that module manufacturers can tolerate a 57 percent increase in polysilicon price.”
Chinese polysilicon makers led by GCL-Poly and Daqo New Energy Corp. ramped up production in the second quarter as imports declined. ReneSola Ltd. said on July 1 it revived production at its Sichuan polysilicon plant with an annual capacity of 10,000 metric tons.
— With assistance by Feifei Shen