17 October 2012
Posted in News - SPVI news
the installation volume of this year’s second round of Golden Sun projects will be in the area of 1.5GW, and distributing power pilot project will include 10 to 15GW in total capacity.
On Monday, the EU had sent out a list of 134 Chinese solar firms who were cooperating with the EU Commission and provided sampling data to the Commission for its anti-dumping case.
Previously, we were worried that the European Commission would cut the acceptable number of China’s solar firms who needed to respond, in order to complete the investigation as soon as possible. Yet, according to the result, with the exception of those enterprises that had no exports during the investigation period, all those that offered their sample data ended up on the list. Six enterprises were envisaged to represent the largest, most reflective sample to determine the rate of dumping margin and the duty rate. In the case of module exports, Suntech Power Holdings Co, (NYSE:STP) and Yingli Green Energy Hold. Co. (NYSE:YGE) were chosen. Cell exports will be represented by JA Solar Holdings Co., Ltd. (NASDAQ: JASO) and Taiwanese DelSolar, based on its plant located in Mainland China. In the case of wafer, the Commission chose LDK Solar (NYSE:LDK) and Hong-Kong’s Exchange-listed Solargiga Energy (HKG: 0757). Each of those companies will have its own rates calculated. For the other 128 enterprises, determination of any anti-dumping duties will be based on the weighted average of dumping margin, if any, of the above-named six exporting producers. Those who are not included in the list are expected to see a much larger punitive tariff, which will essentially stop them from exporting to EU markets.
It is expected that the investigation will take a full timeline with the results being published sometime in June 2013. According to European laws and the Commission’s past record, the risk of duties being applied retrospectively is somewhat minimal.
After the initial shock of the investigation in the EU, trading figures at European ports are in contrast to the sluggish conditions of recent weeks. We see some orders increase and as expected, most orders from Europe are rush. There are three reasons for this. Firstly, most European buyers think that what the European Commission has done to date is mild compared to what may happen next year, so they will be likely to take more risks if they purchase modules from China in 2013. Secondly, in both August and September, most German firms paid close attention to the market, and many distributors maintained their inventory at a low level. However, since the demand from Germany’s household application is stable and they expect uplift at the end of the year, they started to replenish their inventories. Thirdly, Germany’s distributors and installers will usually use local, well-known modules and cheap modules form China to have them bundled up for sale in a type of promotion. So, it means they have to choose local modules if they don’t buy modules from China, thus increasing costs; otherwise they face the risk of running out of product. When it comes to the demand from Europe in Q4, since the demand for household applications has increased, Solarzoom expects demand for mono-c-Si modules and high-efficiency modules to rise to supply the retail market.
Another hot topic this week mainly focuses on the domestic policy. At present, most of China’s solar firms are actively preparing for application for a second round of Golden Sun projects and the large-scale distributed PV power generation demonstration projects. Due to the EU anti-dumping investigation, the Chinese government took more steps to support the domestic solar market in the last few weeks. The detailed result has not come out, but generally, the installation volume of this year’s second round of Golden Sun projects will be in the area of 1.5GW, and distributing power pilot project will include 10 to 15GW in total capacity.
The current plan for the PV power generation demonstration projects is set to no more than 500MW, with a maximum of three separate projects for each province (city). There are 31 provinces in China; therefore, there is up to 15GW capacity in this plan. Expected subsidy is around 0.4 to 0.6 RMB, plus the normal fire power purchasing price, making the sum about 0.8~1RMB/kWh.
The application period has closed Tuesday and the majority of US-listed companies have placed their bids. Since 170MW is the size of each project, on average, it would be difficult for a single company to set up a 170MW plant. Therefore, sharing of the resources is expected to take place among the participants.
In light of this development, resumption of production is expected shortly. We expect that the trading volume will have a certain increase in the next two weeks, but considering the high volume of previous backlog, the market price is expected to remain flat for the time being.
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