At the start of this year, the United States Department of Commerce
conducted a preliminary review of the anti-dumping and countervailing
(AD/CVD) measures against Chinese photovoltaic (PV) cell imports for
2012 and reduced the overall tariff rate from 30% to 17.5%.
Consequently, advantages are lost for Taiwanese cell manufacturers
facing tariff rates between 11.45% and 27.55%. Cell prices since then
have also seen a steady decline.
EnergyTrend, a division of TrendForce, says the situation may now
start to improve as the demands in China, the United States and Japan
have pick up recently, resulting a general price increase for the PV
supply chain. High-efficiency cells have led the charge in the market
recovery as their prices bounced back at the end of May after hitting
the bottom. The industry on the whole is preparing to surging demands
during the second half of 2015. The final ruling on the 2012 tariff rate
will be announced on July 7, and its impact on Chinese PV companies
will be insignificant regardless of the outcome.
While the outcome of AC/CVD case is still pending, the top-tier and
vertically integrated PV manufacturers are reducing costs according to
schedule. Their average production cost of PV modules is currently
between US$0.45~0.47/W. With the tariff rate staying at 17.5% according
to the preliminary determination, the major Chinese manufacturers will
see considerable profits when the module price in the United States is
kept above US$0.6/W. Chinese exporters such as Trina, Jinko, Canadian
Solar and Yingli are thus still able to sell their products directly to
the United States. EnergyTrend estimates Chinese module exports to the
United States have reached around 1.5GW in the first half of this year.
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Leading Chinese PV companies this year have made efforts to offset
the potential impacts from the tariff ruling. These measures involve
using third countries that are in between the exporting nation and
importing nation. They include outsourcing module manufacturing to
contractors based outside the home country as well as exporting products
from countries with zero or lower tariff agreements with the importing
nation.
Chinese module makers, for instance, have used cells made by
Taiwan-based Motech because the United States levies a lower tariff rate
on its products. The maturation of contract production in the third
countries also encourages vertically integrated PV manufacturers to
expand their cell and module capacities in Asian countries outside
China. The scale of such expansion projects is often 500MW and above.
EnergyTrend expects the demand from the United States to be around 9.5GW
for 2015. American and European companies will supply 5GW of this
demand and remaining 4.5GW will be split between Chinese and South
Korean companies. The Chinese have already exported 1.5GW of modules to
the American market, secured foreign contractors and expanded capacities
in third countries. Hence, any possible rate change announced at the
AD/CVD review next week will have marginal impact on them.
The current prices of cells produced in third countries and Taiwan
have already been lowered in response to the 17.5% tariff rate.
According to Corrine Lin, the price increase that Taiwanese cell
manufacturers saw in May was mainly attributed to demands from China and
indirect orders of products going to Japan. Indirect orders from the
United States was also an additional factor. If the next week’s ruling
keeps the rate the same, Taiwanese and third country cell manufacturers
will have to further reduce their prices in order to stay competitive.
Their Chinese rivals are in an advantageous position this year due to
their cost-cutting measures. However, the price decline of Taiwanese
cells will be limited because the prices of Chinese cells have recently
started to bounce back.
With trade wars continuing to affect the major PV markets,
EnergyTrend expects more capacity expansion projects to take place in
third countries. Besides building plants in these areas, PV companies
will also work with local contractors. For the Chinese manufacturers,
the goal of establishing production capacities abroad is to head off
trade disputes with the United States and Europe, which are the
traditional markets for high-efficiency products. Therefore, the Chinese
PV industry will also likely to allocate part of its overseas capacity
for high-efficiency products. Some Chinese companies moreover plan to
introduce PERC technology into their third-country facilities, and this
contrasts with their Taiwanese competitors who kept their technologies
within the home country.
Lin also notes that the manufacturers with a broad third-country plan
will not simply maintain their advantage during trade disputes. When
the PV markets in third countries take off, these companies will also be
the first to seize the opportunities. The trend of big industry players
getting bigger will thus become more apparent in the future.
EnergyTrend expects at least one PV company this year will be able to
cross the 5GW threshold in shipments for the first time.
http://pv.energytrend.com/research/20150703-9046.html