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Chinese companies demand more stringent measures to limit polysilicon imports
Abstract According to recent reports, on Thursday, an industry official revealed that Chinese solar panel manufacturers are urging Beijing to implement stricter measures to limit the import of raw materials—specifically polysilicon—aimed at reviving the struggling green energy sector. Last week, China imposed high initial anti-dumping duties on U.S. and South Korean solar-grade polysilicon, signaling a growing concern over the impact of foreign imports on domestic producers. Analysts note that these materials have long dominated the Chinese market due to their competitive pricing and quality. However, industry experts argue that further restrictions may not significantly benefit China’s struggling polysilicon industry, as more than 60% of imports come through processing trade, which is currently exempt from such tariffs. This loophole allows companies like Wacker Chemie and OCI to export polysilicon into China’s bonded zones, where they benefit from tax incentives before converting it into solar wafers and panels for export. Following the latest anti-dumping decisions, industry groups in Beijing have been pushing the Ministry of Commerce to address this gap and expand the scope of future actions. Ma Haitian, deputy secretary-general of the Silicon Industry Branch of the China Nonferrous Metals Industry Association, emphasized the need to include all polysilicon imports under anti-dumping measures. The association has been actively involved in lobbying efforts since 2012, when China imported over $2.1 billion worth of polysilicon. While the new tariffs range from 53.3% to 57% on U.S. imports and 2.4% to 48.7% on South Korean imports, analysts suggest the decision was made with the aim of easing cost pressures on local solar panel manufacturers. Interestingly, the EU was not included in the preliminary anti-dumping list, despite being one of the largest sources of polysilicon for China. With over a third of imports coming from Europe, the move could be seen as an attempt to resolve ongoing trade disputes. The EU has accused China of dumping solar panels at unfairly low prices, and will decide on August 6 whether to impose punitive tariffs. Since the 2008 financial crisis, polysilicon prices have plummeted, with global prices dropping from $400 per kilogram to under $20 today. Domestic manufacturers have also faced challenges from cheap imports, including those from MEMC and Hemlock Semiconductor. Chinese solar panel producers often prefer imported polysilicon due to its higher purity and better efficiency. In the first half of 2013 alone, China consumed 69,000 metric tons of polysilicon, with 41,000 metric tons imported. Only a handful of the country’s 40-plus polysilicon manufacturers remain operational, with capacity utilization far below design levels. Analysts believe the new tariffs may push prices up by around 10%, but loopholes and low tariffs on certain Korean suppliers could limit their effectiveness. Some companies might even route polysilicon through third countries to avoid the tariffs altogether. Glenn Gu, a senior solar analyst at IHS, noted that the current measures are unlikely to provide meaningful support to the domestic industry due to legal gaps and relatively low tariff rates. As the solar sector continues to face headwinds, the battle over polysilicon imports highlights the complex interplay between trade policy, industry survival, and global competition.