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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 and SunEdison Inc.

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