China's solar companies, already reeling from a collapse in product prices, will face an even tougher road ahead if the European Union follows through with its plan to impose steep tariffs on Chinese-made solar-panel imports.
China
's
solar companies, already reeling from a collapse in product prices, will face
an even tougher road ahead if the European Union follows through with its plan
to impose steep tariffs on Chinese-made solar-panel imports.
"There is no way we can be profitable with the new tariffs," said
Zhang Longgen, chief financial officer at JinkoSolar Holding Co. (JKS), which
ranks among
China
's top
solar manufacturers. "The only thing we can do is increase the price of
our products."
The European Commission, which enforces EU law, plans to announce in June that
it will impose tariffs of up to 67.9% on imports of Chinese-made solar panels,
according to a copy of the plan viewed by The Wall Street Journal.
Suntech Power Holdings Co. (STP, K3ND.SG) will face tariffs of 48.6%, according
to the document. Tariffs on LDK Solar Co. (LDK) will be 55.9%, and tariffs on
Trina Solar Ltd. (TSL, K3KD.SG) will be 51.5%. JingAo Solar Co. will face
tariffs of 58.7%, the document says.
Most other Chinese companies in the sector that cooperated with the
investigation will pay the average tariff of 47.6%. Those that didn't will pay
a tariff of 67.9%, according to the document.
JingAo declined to comment, while LDK and Trina didn't immediately reply to
requests for comment. Suntech said it would respond in a statement later
Thursday.
Suntech, the largest supplier of solar panels in 2011, has already blamed part
of its financial losses, facility closures and layoffs on anti-dumping and
anti-subsidy tariffs that went into effect last year in the
U.S.
The
EU has launched two probes into Chinese solar panel makers accusing them of
dumping goods at below-cost prices and receiving unfair subsidies. A third EU
anti-subsidy probe was launched last week into Chinese-made solar glass.
European demand for new solar-electricity projects slowed about 12% on year to
16.48 gigawatts in 2012 due to the region's weaker economy and subsidy cuts to
renewable-energy projects, according to consultancy NPD Solarbuzz.
However, the value of Chinese solar product exports to
Europe
fell
even more sharply to $11.2 billion in 2012, down 45.1% from a year earlier,
according to the China Chamber of Commerce for Import and Export of Machinery
and Electronic Products, an industry group.
The sharp decline in export values is likely due to a 50% decline in
crystalline silicon solar-panel prices in 2012, according to NPD Solarbuzz.
Although
Europe
is still the largest market for Chinese solar
panels, it has become less important in terms of overall revenue for many of
China
's
largest solar companies.
Europe
made up 55% of JinkoSolar's revenue in 2012, down
from 83% in 2011, according to the company's latest annual report. JinkoSolar
expects
Europe
to contribute only 20% toward overall revenue in
2013, Mr. Zhang said.
China
,
meanwhile, accounted for 45% of JinkoSolar's revenue in 2012, up from 17% in
2011.
Mr. Zhang said that since the beginning of the year, sales to
Europe
have
slowed as his company makes efforts to ensure that European clients are
responsible for any retroactive tariffs on solar panels imposed by the EU.
"We have to be cautious and careful about
Europe
and
look at other markets for our products," he said.
Meanwhile,
China
reiterated Thursday that talks were the best way to resolve the solar trade
dispute.
"
China
and
the EU are very important trade partners, and dialogue is the best way to
resolve disputes," Yao Jian, a spokesman for
China
's
Ministry of Commerce, told reporters at a news conference.
"We are resolutely against the potential measures, and we will definitely
protect the interests of Chinese companies," Mr. Yao said, adding EU
sanctions will affect the entire Chinese solar industry.
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