The Ministry of Commerce of the People's Republic of China (MOFCOM) recently announced that subsidies were applied to US polysilicon under investigation which led to substantive damages toward China's domestic industry. Thus, a countervailing duty of 6.5% has been imposed on two of US vendors, Hemlock and AE Polysilicon. But according to EnergyTrend, most of China's polysilicon manufacturers have resumed production, which will increase polysilicon capacity. Hence, the anti-subsidy duty will have limited impact on price, as price is not likely to increase in the future.
EnergyTrend said the annual growth rate of China's imports of US polysilicon was about 85% in 2012. In addition, based on the data announced by MOFCOM, the amount of imported polysilicon that is subsidized by the US government has continued to go upward, increasing by almost 100% in the first half of 2012 compared to the same period in 2011. Judging from the demand solar-grade polysilicon in 2012 in China, the proportion of imports from the US accounted for more than 20%.
EnergyTrend believes that the anti-subsidy duty will have limited impact on polysilicon market pricing. Since China announced the anti-dumping tariff previously, the tax rate imposed on US vendors has reached 53.3-57%. In other words, the market price has already been affected. Moreover, the anti-subsidy duty is far less than the tax rate. Therefore, market price is not likely to fluctuate significantly. On the other hand, due to the less damage towards Korea-based vendor OCI, and Europe-based vendors throughout the polysilicon anti-dumping investigation, China-based vendors have turned to Europe and Korea for supplies. Yet, China's polysilicon vendors still face tough challenges from worldwide competition.
The rise of China's domestic market has caused polysilicon prices in China to gradually increase, which has also allowed China's polysilicon vendors to resume production. For example, TBEA's capacity of 12 thousand tons will be mass produced by the end of the year; CSG resumed production in August 2013 after eleven months of delayed production; and Sinosico has also aggressively worked on production re-activation. EnergyTrend believes that it is not likely for polysilicon prices to continue increasing due to the falling downstream market prices and the China vendors' resumed production, which will lead to flexible supply in the future.
Judging from the spot market's overall performance, China's polysilicon price remains between CNY132/kg-CNY135/kg, the firm added.
