Chinese poly producers – demand driving production, not tariffs

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Two major Chinese polysilicon producers have dismissed reports they have increased production ahead of expected duties being applied to polysilicon imported from the EU, U.S. and South Korea.

Lu Yeung, of GCL-Poly, told pv magazine although the potential imposition of duties by the Chinese government was being considered by the company, the increase in production had been going on for months, rather than weeks, thanks to robust demand.

Daqo New Energy‘s Kevin He concurred, adding the increased production at Daqo was down to the company’s Xinjiang plant coming online after construction finished in October.

With Daqo one of four polysilicon manufacturers who complained to the Chinese Ministry of Commerce (Mofcom) about the dumping of polysilicon from the EU, U.S. and Korea, He reiterated that poly is being dumped and that Mofcom has advised him duties are likely to be imposed on U.S. and Korean poly producers with the EU outcome linked to the ongoing trade talks over the dumping of Chinese modules in the EU.

He told pv magazine: "Our Xinjiang plant has been at full production since the end of March so it is not right to say we have ramped up production in recent weeks. Construction at Xinjiang finished in October and we have since brought the plant up to full capacity."

On the subject of potential import duties on overseas polysilicon, He added: "We are in close contact with the Ministry of Commerce and there is no doubt about a tariff on polysilicon imported from the U.S. and Korea but there is uncertainty about polysilicon from Europe because of the talks so we will have to wait for a decision on that."

We have been raising production levels for months, not weeks

GCL-Poly’s Yeung said: "Our output has been able to be held at a good level. We have been running at a very robust level, not just in the last few weeks but over the last two or three months.

"An expectation of duties might be one of the reasons but there is relatively robust demand for our product worldwide."

With news emerging in Chinese media of a possible breakthrough in the EU-China trade talks after China reportedly offered a minimum module price of €0.50/W and to limit imports to Europe to 10 GW, the prospect of tit-for-tat import duties on EU poly – and other products such as wine and steel tubing – imported to China may be receding, as an industry insider told pv magazine.

With any solution to the module dispute also likely to halt tariffs on other trade items the source dismissed reports tariff considerations were driving poly production in the People’s Republic.

He said polysilicon manufacturers would be unlikely to invest in ramping up production on the basis of speculation and predicted producers would be more likely to await the outcome of the module talks and their knock-on effects on the polysilicon industry.