FocusChina polysilicon to rise in wake of EU’s penalty tariff move

07 June 2013 03:41  [Source: ICIS news]

By Felicia Loo

Solar-grade polysilicon - which is usually traded in chunks, granules and rods - is the raw material for making solar wafers, ingots, cells and modules.SINGAPORE (ICIS)--China’s polysilicon prices may increase in the coming weeks in the wake of the EU’s announcement of provisional penalty tariffs on Chinese solar imports into the region, market participants said on Friday.

Spot polysilicon prices were assessed at yuan (CNY) 118,000-128,000/tonne ($19,218-20,847/tonne) DEL (delivered) China in the week ended 5 June, unchanged from the previous week, according to ICIS. Market players mostly stayed on the sidelines, weighing the impact of EU’s trade policy.

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

“Trading has been muted in the last two days leading to the ADD [antidumping duty] announcement and now the market is trying to assess the impact,” said one polysilicon producer in northeast Asia.

Most market participants refrained from committing concrete bids and offers, wary of incurring trading risks at a time of uncertainty over China’s response to EU’s ADD move. They are adopting a wait-and-see stance for further legislative developments in China on the issue of polysilicon trade.

“[Polysilicon prices may increase by CNY5,000-10,000/tonne if China issues its own ADDs,” said one Chinese solar module maker.

The EU on 4 June imposed provisional ADDs on imports of solar panels, cells, and wafers from China. The European Commission set the initial duty at 11.8% until 6 August 2013. After that, the duty will be increased to 47.6%, “which is the level required to remove the harm caused by the dumping to the European industry”, according to EC.

In total, the provisional duties will be in place for a maximum of six months. By 5 December, the EU will have to decide if definitive ADDs will be imposed for a duration of five years.
At the same time, the EC said it remained ready to pursue discussions with Chinese exporters and with the Chinese Chamber of Commerce to find a solution “so that provisional duties can be suspended and a negotiated solution achieved”.

The decision to impose the duties came after a nine-month investigation, launched in September 2012. During the probe, EC found that Chinese companies were selling solar panels to Europe at far below their normal market value that causes significant harm to EU solar panel producers, it said.

China has started anti-dumping and anti-subsidy investigations on wine from EU, in response to the EU’s ADDs on Chinese solar products.

Meanwhile, China being a net polysilicon importer may soon announce its long-awaited decision on levying a penalty tariff on polysilicon imports from the US, the EU and South Korea.

The potential antidumping ADDs on imported polysilicon may be around 50% for the US, 40% for the EU and less than 10% for South Korea, according to market sources, who added that China’s decision will be made sometime in June.

ADDs imposed on polysilicon imports would translate to higher costs of imports and thus boost demand for locally-produced polysilicon in China and hence higher prices, they added.

However, some market participants said that the expected rise in polysilicon prices may be capped because the downstream solar buyers are already well-stocked on supplies after having secured the material over the last few months in anticipation of the ADD announcement.

“Now the buyers will just seek polysilicon on a need-to basis. There is no urgency in buying [polysilicon],” said one participant.

A solar polysilicon producer said: “We are waiting for the feedback from our customers. Given the ADD timeframe, it takes about 60 days to know the impact of the tariff.”

($1 = €0.75 / $1 = CNY6.14)

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

By: Felicia Loo

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