A recent announcement by the EU saying it had resolved a dispute with China over solar panel pricing is likely to dampen Chinese orders for Taiwanese solar panels in the second half of the year, analysts said yesterday.
While Taiwanese solar firms are not expected to benefit particularly from the latest truce between China and the EU, the deal will benefit the entire solar industry in the long term following the emergence of a new model in the industry, they said.
The nation’s biggest solar cell maker, Motech Industries Inc (茂迪科技), yesterday saw its shares drop 1.71 percent on the news that China and the EU reached the agreement over the weekend, while shares of Giga Solar Materials Corp (碩禾), which supplies photovoltaic (PV) conductive paste, fell 3.33 percent.
The comments by analysts and falling share prices among local solar firms came after Chinese and EU negotiators reached an agreement, which exempts Chinese manufacturers from potential punitive tariffs, providing they sell solar panels at an agreed minimum price.
“Once the EU fixes a minimum price for solar imports from China — for example a minimum price of 0.56 euros per watt for annual imports from China of as much as 7 gigawatts — it means that tier-one Chinese companies can still ship their products to the EU, and that would suggest fewer rush orders for Taiwanese firms,” said Daniel Tsai (蔡志昇), an analyst at Jih Sun Securities Investment Consulting Co (日盛投顧).
On the positive side, agreeing minimum prices would mean a smaller impact on prices than would have incurred under any potential EU anti-dumping tariff, which would have a positive effect on the whole global solar industry supply chain and therefore benefit financially-healthy and high-quality Taiwanese firms in the long run, Tsai said.
Chinese solar exporters increased their combined EU market share to 80 percent as of June last year, from 63 percent in 2009, the European Commission said last month, when it introduced a preliminary two-month punitive tariff of 11.8 percent on Chinese-made solar panels.
Levies were set to jump on Tuesday next week to a range of between 37.2 percent and 67.9 percent until the accord was reached.
Taipei-based market researcher TrendForce Corp (集邦科技) said yesterday in a statement that it expects Taiwanese solar firms to see short-term orders canceled by Chinese companies in the near future.
“However, Taiwanese firms will benefit from a trend in Europe where the market is accelerating the pace of rooftop solar panel installations,” TrendForce said.
Given their advantages in solar cell technology, Taiwanese firms could still enjoy the upper hand in the European solar rooftop market if they can enhance solar module manufacturing processes and improve cost-control measures, the researcher said.
Other solar power firms that saw their shares decline on diminished hopes of rush orders from China included Gintech Energy Corp (昱晶), down 3.17 percent, and Green Energy Technology Inc (綠能), down 3.45 percent.
Shares of Taiwan’s solar wafer maker Sino-American Silicon Products Inc (SAS, 中美晶) closed down 2.55 percent. Solar cell and panel maker Neo Solar Power Corp (新日光) closed 3.3 percent lower.