Chinese makers of solar power equipment saws their share prices tumble after Washington imposed tough new duties on panel parts exported to the US.
The decision to introduce duties of more than 31 per cent on the panel parts has raised Sino-US political tensions, with the Ministry of Commerce calling the decision unfair and damaging to the interests of both nations.
The US Department of Commerce said its investigation has found that Chinese firms sold solar cells and panels in the US at less than fair value. It slapped a preliminary duty of around 31.2 per cent on 61 major Chinese panel makers' US-bound exports, and of 250 per cent on other, smaller producers. A final decision will be made in October. This follows the US decision to impose so-called countervailing duties of 2.9 per cent to 4.7 per cent on the firms in March, at which time it said Beijing unfairly subsidised solar cell exports. Cells are assembled to make panels.
Ministry of Commerce spokesman Shen Danyang said the duties, which apply retroactively to March, were based on unfair comparisons of price data.
'The US Department of Commerce has refused to recognise China's market economy status. Its proactive move to stir up a trade dispute in the clean energy sector has sent a pessimistic signal to the world on trade protectionism,' Shen said.
Mainland panel makers, which are reeling from losses due to oversupply and weak European demand, defended their trading practices. 'These duties do not reflect the reality of a highly competitive global solar industry,' said Andrew Beebe, chief commercial officer of Jiangsu province-based Suntech, the world's biggest maker of solar panels. He said the firm consistently maintained a positive gross profit margin.
Mark Kingsley, chief commercial officer of Jiangsu-based panels maker Trina Solar, said the US decision was short-sighted and impeded the US' effort to use more green energy.
Jessica Jin, an analyst at IMS Research, said the duties would prompt firms to move or outsource some panel assembly operations abroad, especially to Taiwan, to circumvent the duties. However, she said some producers thought the final duties would be much lower.
CLSA head of sustainable research Charles Yonts said the final duty imposed would be less than 10 per cent, 'which would allow [US President Barack] Obama to show that he's being tough, but not really have any impact and threat of retaliation'.
China exported US$3.1 billion of solar cells to the US last year. The Chinese solar industry had earlier lobbied Beijing to retaliate by slapping duties on US exports to China of polysilicon, a raw material for panels. Mainland solar equipment makers' share prices fell, while their US and Taiwanese rivals gained. Hong Kong-listed polysilicon and solar wafer maker GCL-Poly Energy Holdings tumbled 7.8 per cent.