Responding to JA Solars first quarter 2012 financial results, Jefferies issued a company note in which it stated that it expects a trade case to be filed this month. It added that the Chinese module manufacturer is "most exposed" to the dumping case since it is a "merchant cell supplier with 57 percent of its shipment in cell in 1Q12."
The analysts write, "With the dumping case ruled in favor of SolarWorld (ironically, JASO was previously a key cell supplier of SolarWorld), modules using JASOs cell can no longer be sold in the US market. The WTO case will soon be expanded to Europe and could potentially exclude JASO from almost 60 percent of the global PV market (including the US)."
SolarWorld has reportedly been building a team in Brussels, in order to bring the trade case to Europe. Having waited to announce the first round between the U.S. and China until the Solar Power International tradeshow, held last October, speculation is rife that a similar announcement could be made during next weeks Intersolar Europe event. No one could be reached from SolarWorld or the Coalition for American Solar Manufacturers (CASM) for comment.
On March 1, a new European coalition was formed, the Alliance For Affordable Solar Energy. It was launched to "protect free trade in the European solar sector". According to a statement released by the coalition, over 70 global solar companies representing the entire supply chain, including Suntech, Trina, Yingli and Canadian Solar have joined. Reportedly the alliance generates more 7.5 billion annually in turnover. The Financial Times wrote that the alliance has "managed to delay if not derail SolarWorlds plans."
Meanwhile, a number of companies have spoken out against the imposition of trade duties on Chinese made solar products in Europe. At the end of May, Germany-based Wacker Chemie AG said it has taken a "firm stand" against trade duties. CEO, Rudolf Staudigl stated, "We are convinced that protectionist measures will not help the domestic solar industry, but rather impair the photovoltaic technologys future prospects."
Suntechs Zhengrong Shi also joined the debate. "Anti-dumping tariffs by Europe, which accounts for 70 percent of sales for Chinese solar companies, ‘would have a lethal impact on China's solar industry,' he told Reuters in an interview" also at the end of May.
Furthermore, speaking to EurActiv.com, Reinhold Buttgereit, secretary-general of the European Photovoltaic Industry Association (EPIA) reportedly said, "'To be frank, without global competition and cheap Chinese PV modules, we wouldnt be as close to grid parity as we are today,' he said, referring to the tipping point where renewables become competitive with fossil fuels. The real problem was ‘the lack of a European industrial policy', he said, as China was poised to become the worlds most important renewable energy market within two years."
European weakness
Commenting on the current state of the German solar market, which has seen a number of insolvencies recently announced, Oliver Ristau quoted Jeffries analyst, Jesse Pichel in this month's pv magazine. "We have argued for years that in Europe only downstream or high-tech firms should survive. Anyone making a commodity product really cannot compete with China," stated Pichel.
He continued, "As a professional, I consider it a failure that I was unable to convince the heads of SolarWorld, Q-Cells and others to set up manufacturing lines in China. I think managements did not listen because they were arrogant, not recognizing the competitive threats from China, and instead relying on good times brought about by easy subsidy programs which have abated."
iSuppli analyst Henning Wicht added, "The European manufacturers cannot match the Chinese firms capacity to wait out the price collapse and overcapacity … The point is being able to offer future customers value added over the Chinese competitors."
Loggerheads
In related news, China and Europe are at loggerheads over allegations that Beijing has "illegally subsidised its fast-growing telecommunications equipment companies, including Huawei Technologies and ZTE, helping them grow at lightning speed to snatch business from western rivals such as Nokia and Alcatel," according to the Financial Times.
The news source reported that if the trade case goes ahead, it will be "the first time the EU has opened a trade investigation on its own initiative, and not at the behest of a European company. The Chinese, says Jonathan Holslag of the Brussels Institute of Contemporary China Studies, would ‘view this as a declaration of war'."
Ironically, at the same time, Europe has approached China to obtain help with the current debt crisis. The EU had a reported trade deficit with China totaling 168 billion between 2000 and 2010.
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