Wuxi Suntech Power, a subsidiary of Chinese diversified solar energy company Shunfeng International Clean Energy (SFCE), has become the latest large Chinese player to withdraw from the European Unions (EU) Minimum Import Price (MIP) undertaking.
Having given notice of its intention to voluntarily walk away from the MIP agreement in August, the EU on October 11 formally accepted Suntechs decision, duly informing the China Chamber of Commerce for Import & Export (CCCME) that import tariffs will now be re-applied for Suntech solar components reaching the EU.
For Suntech, however, the decision is seen as a financially sound move. Average selling prices (ASPs) for solar modules have fallen to such an extent that the MIP is no longer fit for purpose, the company said, particularly given that there has been no adjustment or indication of a willingness to adjust in the MIP level.
"We have always complied with the EUs MIP agreement and were hoping that this duty would expire after December 2015, but this did not happen," said Suntech executive president He Shuangquan. "So we decided to withdraw from EUs undertaking since it is not consistent with our companys business strategy."
Shuangquan added that being out of the MIP undertaking gives Suntech more flexibility to serve its EU customers and expand its business. Suntech was previously slapped with tariffs of 48.6% on its modules.
Last week, the European Commission (EC) disclosed that it proposed to remove Suntech from the MIP for alleged violations of the MIP. Thus, it appears that the Chinese firm has beaten the EC to the punch.
Also last week, more than 400 European companies wrote to European Trade Commissioner Cecilia Malmstrom calling for an end to the trade measures that have been levied on Chinese solar modules and cells in place since 2012.