Wacker strikes polysilicon deal with Chinese government

German polysilicon giant Wacker Chemie AG has reached an agreement with the Chinese Ministry of Commerce (MOFCOM) resolving the issue of polysilicon exports to China.

According to the two-year deal, signed in Beijing and announced on Tuesday, Wacker agrees not to sell polysilicon produced at its European plants below a specific minimum price in China. MOFCOM, in turn, will refrain from applying anti-dumping and anti-subsidy tariffs on the material. The agreement takes effect on May 1 and lasts through April 2016.

While the Munich-based chemical company said “appropriate schemes” ensured that it could continue to offer its polysilicon at standard market conditions in China, both Wacker and MOFCOM declined to disclose details of the agreement.

"I am pleased that existing differences concerning the prices for our polysilicon exports to China have been successfully resolved through dialogue," said Wacker CEO Rudolf Staudigl in a statement. "The agreed solution is in the best interests of both Wacker and China’s solar industry. We can continue supplying our high-quality material at competitive prices to our Chinese customers, who need it to produce highly efficient solar modules. This agreement is an excellent example of how conflicting opinions in trade issues can be amicably solved through constructive discussions and negotiations based on trust."

Commenting on the agreement, EU Trade Commissioner Karel De Gucht stated: "I am very satisfied that China will not impose trade defence measures on European polysilicon exports. With this agreement, our industry will be able to pursue its operations in China where there is a substantial demand for high quality polysilicon.

"The European Commission and the German Government have worked hand in hand over the last couple of months to strongly support Wacker Chemie AG in its negotiation for an economically viable minimum import price. I am confident the removal of this trade irritant will strengthen the EU – China bilateral relationship."

Although MOFCOM launched an investigation into European imports of solar grade polysilicon in November 2012, China has held back on levying duties on polysilicon imported from the European Union, which would have had a dire impact on Wacker, Europe’s largest polysilicon maker.

China slapped anti-dumping and anti-subsidy duties on U.S. polysilicon imports last year, making them permanent in January after the United States said it was considering expanding anti-dumping and countervailing duties on Chinese and Taiwanese solar products.