Chinese Companies to come up with Solutions after US Announced its Preliminary Determination on CVD & AD Duty

published: 2014-08-12 17:53 | editor: | category: Analysis

US’s AD tax rates imposed on Chinese PV products were ranged between 26.33%-165.04%. It’s like a wall that blocks Chinese manufacturers’ ways to the US. How would Chinese PV manufacturers respond to that as they are now in a blind alley?

First of all, let’s take a look at Chinese module makers’ exports from January to May: Chinese module export volume was 9.7GW from January to May in 2014, in which, exports to the US was 1.8GW, representing 18.6% of Chinese module makers’ total exports. Thus, US has become the second largest PV market, next to Japan. Chinese exports to the US will continue to increase month by month. The top four Chinese manufacturers with the largest exports to the US were Trina Solar, Canadian Solar, Jinko, and Yingli. After US’s preliminary determination on the CVD and AD duty was announced, Trina Solar, Canadian Solar, and Yingli all claimed that they opposed to what DOC decided. They stressed that they will not let go of the US market and will continue to provide services to US customers and build partnerships with them.

US’s anti-dumping actions are like a disaster for Chinese PV manufacturers. The high tariffs will discontinue Chinese makers’ businesses in the US. What they can do now is to discuss for the solutions while clearing out the inventory in the US.

EnergyTrend interviewed several Chinese manufacturers and learned of the below solutions that manufacturers adopted:

1) Build factories in the overseas: In order to respond to previous Europe’s and US’s AD and CVD actions, some companies have built production sites in the overseas. For example, Renesola has already built production sites in South Africa, Turkey, and Poland. Hence, its modules exported to the US were not produced in China. Also, Sunergy has built factory in Turkey. Therefore, AD and CVD actions this time did not have large impacts on these manufacturers. Meanwhile, the production sites for Trina Solar, Jinko, and Yingli remained in China. Companies can use such way to retain the market shares in the US market. Yet, it costs more to build factories overseas and it requires certain amount of time to do that.

2) Purchase cells from a country that’s not covered in the investigation this time: This is the most common way that companies did after the first US-China trade war took place. Chinese manufacturers purchased cells from Taiwan and exported to the US after assembling into the modules in Taiwan. But it brought quite a few troubles to Taiwan while stimulating Taiwan’s PV industry development because Taiwanese cells were covered in the investigation this time. Moreover, the tax rates imposed on Taiwanese manufacturers were almost the same as Chinese manufacturers. Therefore, if this method is continued to be used, there may be more CVD & AD investigations coming up.

3) OEM: Outsourcing to foreign manufacturers. This is a more stable method, which has been adopted by many manufacturers.

The above are the reasonable solutions but it depends on how makers choose to do as different makers are suitable for different methods. It’s believed that Chinese companies will know how to handle trade-war issues more after going through all these trade wars.

  

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