The United States Department of Commerce is expected to soon reveal
the preliminary ruling on its second review of anti-dumping and
countervailing (AD/CVD) rates on Chinese photovoltaic (PV) cell imports
for 2012. This comes after the U.S. government agency concluded its
first review of the 2012 AD/CVD rates on Chinese imports in July of this
year.
While the final ruling of the second review is scheduled to come
out in the middle of 2016, a tentative decision of a 5% reduction on the
anti-dumping rate has been made. If this decision did become the final
ruling, vertically integrated Chinese PV manufacturer Trina would be the
biggest winner coming out of this review as its U.S. market share will
stabilize, according to analysis by EnergyTrend, a division of
TrendForce. The proposed 5% rate cut on the other hand would wipe out
the tariff advantage that Taiwanese cell maker Motech has over its
competitors. Motech produces cells for major Chinese PV exporters
selling to the U.S., so this rate reduction would affect prices and
order volume of Motech’s products. As for the 2012 countervailing duty,
the rate is likely to stay the same during the second review.
“Most Chinese PV product exporters would see their tariffs drop by
just around 2.4% based on the preliminary decision of the second 2012
AD/CVD review,” said Corrine Lin, EnergyTrend analyst. “The fall in
their tariff rates is relatively insignificant. However, Trina would see
its anti-dumping rate cut by 5.14%. Being the largest Chinese exporter
that sells directly to the U.S., Trina stands to gain the most from the
early result of the review.”
Based on EnergyTrend’s analysis, Trina would be able to maintain a
margin of around 9% for its products made in China if it had a rate
decline of about 5%. Trina will also be able to supply the U.S. from
Thailand once its factories there are operational. Though other
first-tier Chinese PV companies do not enjoy substantial rate reduction,
the impact of tariff changes on them is gradually subsiding as they
have recently relocated or established their production capacities
overseas (i.e. outside China and Taiwan). The final result of the second
2012 AD/CVD review will not significantly affect the Chinese companies
on the whole.
With the exception of Motech, high tariff rates have prevented most
Taiwanese PV companies from making a profit selling to the U.S. market.
Motech has seen more of its products going to the U.S. this year as the
company indirectly ship cells to the country through modules assembled
outside China. If the decision to lower the 2012 anti-dumping rate did
become effective, Chinese module makers would be able to sell to the
U.S. at much lower cost. Prices of Motech’s cells on the other hand have
increased considerably this year, so lowering the anti-dumping rate
would remove the Taiwanese cell maker’s tariff-based price advantage and
put it on an equal footing with its competitors. Motech’s prices would
face a strong downward pressure immediately as a result. In sum, Motech
stands to lose out the most at this stage of the review. The following two tables compare the rates finalized in the first
review of the 2012 AD/CVD case (July 2015) and the preliminary rates of
the second review (to be revealed soon):
Chinese PV companies have adopted three major methods for exporting modules to the U.S. in 2015
During this year, major Chinese PV companies such as Trina and
Canadian Solar have used three methods of exporting when it comes to
selling to the U.S. market this year. First, they can ship products made
in China directly to the U.S. and pay a tariff of around 30%. The
second option is to buy Motech’s cell products that carry the lowest
export taxes from Taiwan and use them in modules that are assembled
outside China. These modules will only be taxed at the Motech’s 2014
AD/CVD rate of 11.45% in the U.S. market. The third option is buy cells
that are not produced in China or Taiwan and use them in modules that
are assembled in countries outside of U.S. AD/CVD investigation. The
last method ensures no U.S. tariffs will levied on the modules.
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