UPDATE 5-China to probe US, S.Korean solar materials imports

Fri Jul 20, 2012 11:51pm IST

Related Topics

Stocks

   

* Western and Chinese solar companies at odds for years

* U.S. solar panel companies call it trade retaliation

* Earlier this year, U.S. set import duties on Chinese solar equipment

By Michael Martina and Leonora Walet

BEIJING/HONG KONG, July 20 (Reuters) - China will open investigations into imported U.S. and South Korean solar-grade polysilicon, the country's trade ministry said on Friday, in the latest instance of growing tensions between major solar manufacturers.

The Ministry of Commerce said that it would open anti-dumping and anti-subsidy probes on U.S. imported polysilicon, as well as an anti-dumping probe on South Korean imports of the raw materials used to make solar products.

The Chinese ministry issued the decisions in two statements on its website, citing preliminary evidence from several companies - GCL Poly-Energy Holdings, LDK Solar , and Daqo New Energy.

Chinese officials have threatened to impose trade duties on U.S. shipments of polysilicon if the United States moved to penalize Chinese solar companies.

A spokeswoman for the U.S. Trade Representative's office said the United States was disappointed with the Chinese move and would "vigorously defend its interests" in the case.

"As we have stated with respect to similar actions by China, we are concerned that China appears to have established a practice of using trade remedy investigations to retaliate against legitimate actions taken by its trading partners," USTR spokeswoman Nkenge Harmon said.

Western solar companies have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper prices, while European players struggle to refinance.

China's move came a day after Germany's Environment Minister Peter Altmaier gave backing to German companies' efforts to launch anti-dumping proceedings in Europe. Germany is the world's largest solar market.

Earlier this year, the United States put two new import duties totaling about 35 percent on solar equipment from China, citing the country's unfair support of its industry and illegal dumping of inventories in the U.S. market.

The Coalition for American Solar Manufacturing, the U.S. industry group that sought duties on Chinese-made solar panels, blasted the new Chinese investigation as "an abuse of international trade rules."

"Today's announcement by the Chinese government proves once and for all that it is intent on unfairly and illegally allowing its manufacturers to dominate the global solar industry," Gordon Brinser, president of SolarWorld Industries America, said.

TRADE STRAINS

China's solar manufacturers such as Suntech Power Holdings , Yingli Green Energy and Canadian Solar have criticized the tariffs set this year as a threat to their young industry that will slow its growth by raising costs.

If punitive tariffs are adopted, it would likely impact importers such as U.S. polysilicon maker Hemlock, the world's largest, and South Korea's largest producer, OCI Corp. U.S.-based MEMC Electronic Materials would also be affected.

Though not in a trade war, China and the United States are vocal in their criticisms over the other's trade policies.

Washington says China's attacks are largely tit-for-tat retaliation for valid U.S. complaints, while China suggests the White House is simply "China-bashing" in an election year.

Beijing on Wednesday also appealed a recent World Trade Organization ruling against Chinese duties on U.S. "grain-oriented electrical steel," a case that the United States says is an example of China using its trade defense laws in a retaliatory fashion.

"The WTO panel in the grain-oriented electrical steel (GOES) dispute upheld U.S. claims that China breached a number of substantive and procedural obligations under the WTO Agreement," Harmon said.

Research firm JI Asia analyst Felix Fok said downstream customers, such as wafer manufacturers, would struggle if China passed on the import tariffs against polysilicon imports.

"China is doing this because some of its companies are basically on their knees," Fok said, referring to more than a year of losses suffered by the sector.

China's solar companies hold more than 60 percent of the global market. The U.S. market alone accounts for about 20 percent of sales of China's largest solar panel manufacturers.

The Coalition for Affordable Solar Energy, a U.S. group that represents solar installers, urged both the United States and China to avoid duties, saying tariffs from either end cost jobs and make solar energy less competitive against fossil fuels.

"Lowering, not artificially raising, the cost of solar should be a global goal," the group's president, Jigar Shah, said in an emailed statement.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Pollution Levels

Pollution Levels

Delhi braces for worst air quality this Diwali week.  Full Article 

Fire Accident

Fire Accident

Firecracker market up in flames near Delhi  Video 

Yahoo Result

Yahoo Result

Yahoo ekes out Q3 revenue gain despite display ad weakness  Full Article 

Deal Talk

Deal Talk

Smartphone repair company B2X steps up expansion with Indian deal.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage