China poly-tariffs unlikely – LDK
The Chinese government is unlikely to impose anti-dumping tariffs on foreign polysilicon for the time being, as it looks to lower tensions within the global solar industry, according to LDK Solar officials.
“We don’t believe that some sort of trade war [is in the offing], we don’t believe it will get to that point,” chief financial officer Jack Lai said in a conference call. “We don’t see anti-dumping [tariffs] coming at this point in time.”
Beijing is contemplating slapping duties on foreign polysilicon – a decision that would be as retaliation for the tariffs imposed last year in the US and those under consideration in Brussels, as well as a reflection of its desire to support loss-making local producers like Daqo New Energy.
A decision was initially expected in February, but was delayed for unspecified reasons, and the entire industry remains on tenterhooks. Western producers like Hemlock, Wacker and REC would suffer from such tariffs.
Beijing may be waiting for the EU to tip its hand, with a decision on whether to impose preliminary anti-dumping duties on Chinese PV products expected as early as next month.
An EU decision to go forward with the duties would put serious pressure on Beijing to follow suit in some way.
A number of European countries are understood to be in favour of the tariffs, while others, including Germany, for which China is a major export market, are thought to be lobbying against them.
The US tariffs put in place last year only affect PV cells made in China, a situation which allows for an easy workaround via Taiwan. In contrast, European tariffs would be far more sweeping, and therefore damaging to already struggling Chinese manufacturers.
Last month a senior Chinese diplomat underscored Beijing’s desire to pour water on the growing trade tensions in the solar sector, which have clear implications for other industries.
LDK’s Lai acknowledges that the company has very little “visibility” about when a final decision may be made on the polysilicon tariffs, but adds that the issue is clearly “very, very important” from the perspective of the government.
LDK – the world’s second largest maker of PV wafers, and among the major Chinese solar manufacturers with the most precarious finances – today reported a net loss of $517m for the fourth quarter of 2012.
The loss was due in large part to the extremely low utilisation rate at LDK’s polysilicon facilities as it attempts to upgrade its equipment and processes to make them more competitive – a daunting task given the company’s battered balance sheet.