BEIJING --
China is accelerating a dispute with the U.S. over solar-energy
taxes, moving forward its next salvo to hit as President Barack Obama
faces re-election.
China’s Ministry of Commerce will make preliminary
findings as early as November, eight months before the deadline, on a
complaint that U.S. manufacturers are dumping polysilicon, according to
officials at Daqo New Energy Corp. and Jiangsu Zhongneng Polysilicon
Technology Development Co., two of four companies that brought the case.
Ministry officials are visiting the companies to gather proof of
damage.
“We’ll show our financial condition, workforce details
and the impact on income,” Kevin He, investor relations manager for
Daqo, said in an interview. “We hope the government sets appropriate
punishment tariffs to curb dumping and protect us from damages” from
U.S. and South Korean imports.
China’s potential penalties on imported polysilicon,
the most costly material in making solar cells, comes after the Obama
administration announced plans to impose punitive duties of as much as
250 percent on U.S. imports of Chinese solar cells. The trade dispute is
heating up as Obama seeks re-election in November. The Chinese
government hasn’t said its move is a retaliatory measure.
The struggle between the world’s biggest
energy-consuming nations centers on state support for the solar
industry, a business both Obama and Chinese Premier Wen Jiabao have said
is a priority. Global investment in solar projects rose 61 percent to
$137.8 billion last year.
‘Broader’ Conflict
The Chinese case “is part of a broader trade conflict
extending far beyond the polysilicon and solar industries, as an
escalating number of trade disputes have been initiated throughout the
globe in the last 12 months,” Dow Corning Corp. President Bob Hansen
said in July.
The biggest U.S. polysilicon producer by capacity is
privately held Hemlock Semiconductor Corp., whose largest market is
China. A spokesman for the Hemlock, Michigan-based company declined to
comment and referred to Hansen’s earlier comments.
Chinese ministry officials have already visited
Jiangsu Zhongneng to gather evidence of damage, company Deputy Manager
Lv Jinbiao said in an interview. The company is a unit of China’s
GCL-Poly Energy Holdings Ltd., the world’s largest polysilicon maker by
annual production capacity, which is 65,000 metric tons, according to
data compiled by Bloomberg.
Lv and He both said they expect a preliminary decision
on possible duties against U.S. companies as early as November. The
administration of Obama, who has dueled with challenger Mitt Romney over
Chinese trade policy, said the duties it plans are necessary to counter
Chinese dumping, or selling below cost.
Solarworld Instigation
The U.S. Commerce Department announced in May it will
impose sanctions on Chinese solar cells. It set preliminary tariffs on
imports after companies including the U.S. unit of Germany’s Solarworld
AG said Chinese rivals were selling products below their costs in the
U.S.
The Chinese solar-silicon makers have begun pushing
for the punitive tariffs to be imposed 90 days retroactively after a
decision is announced against U.S. importers, He and Lv said.
“We’re seeing signs that more and more sales are being
lost” because of cheaper U.S. imports Lv said. His company joined Daqo,
LDK Solar Co. and China Silicon Corp. in calling for the investigation
and duties earlier this year.
Polysilicon Prices
Overcapacity and slower demand from Europe following a
cut in subsidies has resulted in lower earnings at global suppliers of
solar panel makers. The average spot price of polysilicon has dropped
about 26 percent this year to $20.33 a kilogram. Prices for
silicon-based solar cells have lost about 18 percent to 42 U.S. cents a
watt this year, Bloomberg New Energy Finance data shows.
Hong Kong based GCL-Poly last month reported a
quarterly loss of HK$330 million ($43 million), its first since the
second half of 2009. Daqo said on Aug. 17 that its net loss in the
second quarter was $7.1 million compared with a profit of $25.7 million a
year earlier.
GCL-Poly’s shares traded in Hong Kong have plunged 45
percent this year compared with a 5.4 percent gain for the benchmark
Hang Seng. Daqo’s shares are down 50 percent in New York. The 17-member
Bloomberg Industries Global Large Solar Index has declined 39 percent in
the period.
LDK Solar Co.’s credit rating on Sept. 3 was cut one
level to A by Shanghai Brilliance Credit Rating & Investors Service
Co., its second downgrade since June, on the solar-wafer maker’s
operating losses and souring export outlook.
China will take “relevant measures” to require the U.S. to provide fair treatment to renewable energy goods, according to a Ministry of Commerce statement released on Aug. 20.
While solar spending surged last year, wind investment
was $82.4 billion, an 11 percent decline from the previous year,
according to a 2012 Bloomberg New Energy Finance report prepared for the
United Nations.
Copyright 2012 Bloomberg
http://www.renewableenergyworld.com/rea/news/article/2012/09/china-speeding-u-s-solar-dumping-case-as-election-nears
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