China’s solar panel manufacturers, who dominate global sales with a two-thirds market share, are confronting growing trade and financial problems, a Chinese industry official acknowledged Tuesday, shortly before one of the industry’s largest companies, Trina Solar, announced weak results for the second quarter.
The Chinese manufacturers “face challenges of decreasing margins, decreasing exports, lack of capital, protectionism and an external environment that continues to deteriorate,” said the official, Chen Huiqing, the deputy director for solar products at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.
The United States Commerce Department has already imposed preliminary antidumping and antisubsidy tariffs on Chinese solar panels totaling more than 33 percent, although the tariffs are subject to a review by the department this fall that could raise, lower or even repeal them. A coalition of solar manufacturers in Europe has asked the European Union to impose antidumping tariffs.
Ms. Chen, who was the lead speaker Tuesday morning at the Guangzhou International Solar Photovoltaic Exhibition here in southeastern China, said that a team of representatives from the Chinese industry is in Brussels to try to persuade European officials not to start a trade investigation into Chinese solar panels in the coming weeks.
Trina Solar, one of the largest Chinese solar manufacturers, announced Tuesday that it had lost $92.1 million on sales of $346.1 million in the second quarter. Price wars in the industry eroded overall revenue, even as the volume, measured by wattage of solar module shipments, continued to increase.
Solar panel exports soared in the last five years to become one of the largest categories of China’s diverse exports, representing a little more than 1 percent of the total. The European Union, the leader in deploying solar panels through extensive government subsidies, buys five times as many panels from China as the United States, making the European Union’s trade decision crucial for Chinese manufacturers.
But the value of Chinese solar panel exports has already fallen 30 percent in the first six months of 2012 from the comparable period last year, as prices have tumbled.
Several bankruptcies of solar manufacturers in the United States and Germany have created political pressure for action against China, where the government has made it a national priority to expand manufacturing capacity for renewable energy.
As new solar panel factories continue to open in China, the industry’s surplus capacity increases, with downward pressure on prices, said Yotam Ariel, the managing director of Bennu Solar, a research company in Shanghai.
“Everyone talks about the struggle of the U.S. producers, but it seems like the Chinese producers are in a struggle of their own,” he said.
The Chinese Commerce Ministry has complained repeatedly, most recently in a statement Monday, that renewable energy programs by five state governments in the United States discriminate against imports from China, but it has not said whether it might file a challenge with the World Trade Organization. The ministry is also investigating a complaint from Chinese industry that the United States is exporting polysilicon, the main ingredient for solar panels, at prices below manufacturing costs.
American companies have contended that their polysilicon prices are low because they rely on very inexpensive hydroelectric power in Oregon, and energy is the biggest single cost in polysilicon production. Chinese polysilicon producers, who would be the main beneficiaries if China restricted imports from the United States, rely heavily on coal-fired power and have a history of spills of toxic chemicals.
Solar panels are sometimes compared to batteries because it takes so much electricity to make the polysilicon that it can take two years for the panel to generate enough electricity to offset the power used to make it.
Source: http://www.nytimes.com/2012/08/22/business/global/chinas-solar-panel-manufacturers-face-trade-and-finance-hurdles.html
The Chinese manufacturers “face challenges of decreasing margins, decreasing exports, lack of capital, protectionism and an external environment that continues to deteriorate,” said the official, Chen Huiqing, the deputy director for solar products at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.
The United States Commerce Department has already imposed preliminary antidumping and antisubsidy tariffs on Chinese solar panels totaling more than 33 percent, although the tariffs are subject to a review by the department this fall that could raise, lower or even repeal them. A coalition of solar manufacturers in Europe has asked the European Union to impose antidumping tariffs.
Ms. Chen, who was the lead speaker Tuesday morning at the Guangzhou International Solar Photovoltaic Exhibition here in southeastern China, said that a team of representatives from the Chinese industry is in Brussels to try to persuade European officials not to start a trade investigation into Chinese solar panels in the coming weeks.
Trina Solar, one of the largest Chinese solar manufacturers, announced Tuesday that it had lost $92.1 million on sales of $346.1 million in the second quarter. Price wars in the industry eroded overall revenue, even as the volume, measured by wattage of solar module shipments, continued to increase.
Solar panel exports soared in the last five years to become one of the largest categories of China’s diverse exports, representing a little more than 1 percent of the total. The European Union, the leader in deploying solar panels through extensive government subsidies, buys five times as many panels from China as the United States, making the European Union’s trade decision crucial for Chinese manufacturers.
But the value of Chinese solar panel exports has already fallen 30 percent in the first six months of 2012 from the comparable period last year, as prices have tumbled.
Several bankruptcies of solar manufacturers in the United States and Germany have created political pressure for action against China, where the government has made it a national priority to expand manufacturing capacity for renewable energy.
As new solar panel factories continue to open in China, the industry’s surplus capacity increases, with downward pressure on prices, said Yotam Ariel, the managing director of Bennu Solar, a research company in Shanghai.
“Everyone talks about the struggle of the U.S. producers, but it seems like the Chinese producers are in a struggle of their own,” he said.
The Chinese Commerce Ministry has complained repeatedly, most recently in a statement Monday, that renewable energy programs by five state governments in the United States discriminate against imports from China, but it has not said whether it might file a challenge with the World Trade Organization. The ministry is also investigating a complaint from Chinese industry that the United States is exporting polysilicon, the main ingredient for solar panels, at prices below manufacturing costs.
American companies have contended that their polysilicon prices are low because they rely on very inexpensive hydroelectric power in Oregon, and energy is the biggest single cost in polysilicon production. Chinese polysilicon producers, who would be the main beneficiaries if China restricted imports from the United States, rely heavily on coal-fired power and have a history of spills of toxic chemicals.
Solar panels are sometimes compared to batteries because it takes so much electricity to make the polysilicon that it can take two years for the panel to generate enough electricity to offset the power used to make it.
Source: http://www.nytimes.com/2012/08/22/business/global/chinas-solar-panel-manufacturers-face-trade-and-finance-hurdles.html
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