Dumping means that a product is exported to the EU at prices lower than the normal value of the product (the domestic prices of the product or the cost of production) on its own domestic market. There is strong evidence that China is dumping solar production in the EU market.
- China has no natural cost advantage given labour accounts for less than 10% of solar panel production costs of many EU manufacturers. Chinese producers also partly imports raw materials and equipment to produce their solar cells and modules. An analysis by the US National Renewable Energy Laboratory found that Chinese manufacturers have only a 1-2 percent cost advantage over American manufacturers. When shipping costs are added, Chinese manufacturers operate at a 5 percent cost disadvantage.
- Chinese government statements indicate that producers are selling solar modules below their cost. The Five-Year Plan states a goal of reducing the cost of PV modules to 7,000 yuan per kW or € 0.87 Euro/Wp by 2015. By 2020, the goal is to manufacture at only 0.62 Euro/Wp. However, it is already possible to buy Chinese modules for 0.47 Euro/Wp in Europe today which indicates prices far below their cost of production.
By 2015 . . . the cost of PV modules will drop to 7,000 yuan/kW, that of PV systems will drop to 13,000 yuan/kW, and that of power generation will drop to 0.8 yuan/kWh. By 2020, PV power generation will become economically competitive as the cost of PV modules will fall to 5,000 yuan/kW, that of PV systems to 10,000 yuan/kW, and that of power generation to 0.6 yuan/kWh Source China’s 12th Five-Year Plan for the Solar Photovoltaic Industry issued in February 2012. → Read More
- On 17 May 2012, the United States imposed dumping margins from 31% to 250% on Chinese solar panels.
On May 17, 2012, the Department of Commerce (Commerce) announced its affirmative preliminary determination in the antidumping duty (AD) investigation of imports of crystalline silicon photovoltaic cells, whether or not assembled into modules (solar cells) from the People’s Republic of China (China). Commerce preliminarily determined that Chinese producers/exporters sold solar cells in the United States at dumping margins ranging from 31.14 percent to 249.96 percent. Source US Department of Commerce.
We welcome the DoC CVDs/ADs as they level the playing field, and impose a painful price for China's insidious and predatory state support (via subsidies, mispricing/misallocation of capital) that has destroyed competitive market mechanisms of price discovery, capital formation and risk mitigation, and engendered an unsustainable industry paradigm. We view the DoC preliminary AD determination as more robust in its intent and content in sending a strong message to China that sovereigns are also held accountable; in this case for violation of agreed upon trade principles under WTO rules. We note that individual industries and companies can compete against each other but cannot compete against a sovereign which has currency, capital, taxation, and policy levers at its disposal Source AURIGA USA, LLC Security Analysts