OUTLOOK '13: Asia polysilicon to stay weak on trade protectionism

20 December 2012 05:49  [Source: ICIS news]

By Felicia Loo

Solar panel on the roofs of The VaticanSINGAPORE (ICIS)--Asia solar polysilicon prices are expected to face downward pressure next year because of global trade protectionism that is already putting a strain on the photovoltaic (PV) industry, market players said on Thursday.

The spot prices will remain weak, with the domestic Chinese prices likely to fall to below yuan (CNY) 100,000/tonne ($15,974/tonne) DEL China while the bid/offer levels on a FOB NE Asia basis may slip to be around $12-14/kg levels, they added.

Many medium- to small-sized polysilicon producers in China have already ceased production since October 2011 and there are no signs on when they will resume factory output because of the bearish market, players said.

“Demand is very weak,” said a Chinese polysilicon producer.

This is in spite of new measures by the Chinese government in providing subsidies to help prop up the ailing solar sector.

China’s Hareon Solar has received a subsidy of CNY48m ($7.7m) from the government.

The PV industry in China has been facing huge pressure following anti-dumping and countervailing measures and investigations on imports of Chinese PV products by the US and EU.

Solar-grade polysilicon – which is usually traded in chunks, granules and rods – is the raw material for making solar wafers, ingots, cells and modules.

Chinese exports of PV products this year are expected to be at CNY13bn, a 40% year-on-year decline because of anti-dumping duties and over supply, Wang Bohua, secretary general of China Photovoltaic Industry Alliance (CPIA), said during the Intersolar China Conference 2012.

The conference was held in Beijing on 11-13 December.

China’s PV products exports to the US slumped by almost 80% since US started anti-dumping and countervailing investigation on imports of PV products in late 2011.

China’s exports of PV products to US dropped sharply to $85m in August from $387m in January, Wang added.

China imported 5,738 tonnes of polysilicon in October 2012, according to China customs data. The imports were 26% higher than the levels in October 2011 but were a 34% decline from September 2012, the data showed.

China exported 97 tonnes of polysilicon in October 2012, the data stated.

The exports were 25% higher than the levels in October 2011 and were up 1% from September 2012, the data further indicated.

US’s Department of Commerce, on 10 October this year, finalised anti-dumping duties (ADDs) on imports of Chinese solar cell products ranging from 18.32-249.96%. The US also set final countervailing duties (CVDs) at a range of 14.78-15.97% for Chinese producers and exporters of the products.

EU has started antidumping and countervailing probe on PV products originating from China as well this year, which is putting a strain on the Chinese PV sector.

Wacker – big producer of polysilicon - remains firmly opposed to US and EU trade tariffs on imported solar products from China, the CEO of the Germany-based chemicals firm said on 14 December.

In the three months ended 30 September, Wacker reported sharp decreases in sales and earnings in its polysilicon business. Wacker reported a 78.5% year-on-year decline in net profit to €26.9m ($35.9m), as higher earnings in chemicals were offset by weakness in its polysilicon business.

Sales fell by 6.2% to €1.2bn, with operating profit down by 64.1% at €70.7m.

($1 = €0.75 / $1 = CNY6.26)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Felicia Loo

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