The EU’s announcement last week that it would investigate Chinese solar-module makers’ dumping practices may not increase orders for Taiwanese firms in the short term, but will benefit the whole industry in the long term, analysts and companies said.
On Thursday, the EU announced to begin probing claims that Chinese solar firms were selling solar-panel products below cost, given signs that this practice has hurt the interests of the European solar industry.
“This will give European solar system companies a respite [from negative market conditions], while benefiting financially sound Taiwanese firms in the long term,” Chinese-language online news outlet Cnyes.com quoted Taiwan Polysilicon Corp (福聚太陽能) chairwoman Christine Yang (楊賽芬) as saying yesterday.
Taiwan Polysilicon manufactures and supplies polysilicon for solar cell production. It operates a 5,000 tonne/year polysilicon line at Pingtung County.
Yang made the remark on the sidelines of an event in Greater Kaohsiung yesterday to promote scientific research and creative thinking among young people, which was held at the Formosa Boulevard Station of the Kaohsiung Mass Rapid Transport system and organized by Taiwan Polysilicon’s parent company, LCY Chemical Corp (李長榮化學).
The EU’s move, along with the US action in May to impose hefty anti-dumping duties on Chinese solar-cell makers, would give a much-needed boost to the spot price of solar cells after a sustained slump because of oversupply by Chinese firms, analysts said. Taiwanese companies may see short-term orders from China, like they did previously after the US action, they added.
As the EU can impose provisional punitive tariffs on Chinese photovoltaic products within nine months of investigation if dumping is confirmed, Taiwanese solar firms may see rush orders from China to circumvent such import tariffs, Grand Cathay Investment Services Corp (大華投顧) analyst Rickey Lin (林君曄) said in a research note on Friday.
“But the increase in such orders would come at a measured pace, rather than a surge in the short term, as Chinese companies in the medium and long term are likely to gradually build overseas operations to cope with the situation,” Lin said in the note.
Lin said the outcome of the EU probe, which would take as long as 15 months to complete, would be hard to predict at the moment.
“However, in our view, the anti-dumping investigation will accelerate industry consolidation among Chinese solar companies, making a substantial improvement in the industry’s overall supply-and-demand situation,” he wrote.
Market researcher EnergyTrend, a research team at Taipei-based TrendForce Corp (集邦科技), said Chinese manufacturers might have prepared for the worst and the Chinese government would come up with solutions based on the verdict.
“Increasing domestic solar demand is the goal for both the Chinese government and manufacturers,” EnergyTrend analyst Arthur Hsu (胥嘉政) said in a statement on Friday.
While there might be some optimism towards shares in solar companies in the short term, First Capital Management Inc (第一金證券投顧) warned against any unrealistic expectations that the market was about to take off.
Rather, First Capital in a note last week advised patience and said the outlook for the industry would largely depend on the strength of European demand in the second half and exactly how the rush orders from China would be trickling in.