Change in US anti-dumping duty may boost capacity utilization rates of Taiwan solar firms, Says TrendForce

On August 19, the US Department of Commerce announced it had revised the preliminary anti-dumping duty on solar products produced by Motech Industries in Taiwan, causing Motech’s tariff rate to drop from 44.18%, the highest among Taiwanese producers, to 20.86%, the lowest. For other Taiwanese photovoltaic (PV) producers, the average duty rate has fallen to 24.23%. 

“Given the revised duties imposed on Taiwanese makers and the high quality of Taiwan’s products, Taiwan may still get US orders indirectly if Taiwanese vendors are willing to sacrifice some gross margins,” said Corrine Lin, an analyst at EnergyTrend, a subsidiary of Taiwan-based market intelligence firm TrendForce. 

The US’s previous higher anti-dumping duty caused Taiwanese PV cell prices to fall significantly. They have dropped more than $0.06/watt in Taiwan and PV cell products on the island now retail for about the same price as first-tier Chinese company.  

Although PV cell prices will remain low in the short run, first-tier cell manufacturers’ capacity utilization rates have generally improved, Lin said. “Chinese demand has also finally begun to increase and China will temporarily close the loophole of polysilicon importing through export processing zones (EPZs) in order to avoid tariff rates.” Lin added. Consequently, additional import duties will be imposed on foreign polysilicon products in the Chinese market, Lin said, adding that as polysilicon imports decline, Chinese upstream polysilicon and wafer makers may be the first to raise prices. 

At the same time, demand is picking up in Europe and Japan, leading to more orders this week of products that are of better quality than their competitors  but similarly priced.  

With orders from Europe and Japan on the rise and Chinese demand increasing, utilization rates for both Taiwanese and Chinese producers are unlikely to be problematic, but gross margin has not yet returned to where it was. Additionally, while the market has cheered Motech’s revised duty rates, lowering prices is usually the only way for Taiwan producers to stand out from their competitors. Finally, the most pressing issue for Taiwan’s PV cell producers at this point is the lack of a dedicated port to export their products. 

This Week’s Price Quotes 

Due to weak Chinese demand, Chinese producers have become more active and prices have moved accordingly. Polysilicon prices dropped 0.73% to US$20.251/kg. High-efficiency multi-si wafer prices reached US$0.921/piece, down 0.43%, while normal-grade declined 0.88% to US$0.899/piece. Mono-si wafer prices fluctuated and declined 0.26% to US$1.163/piece. 

For cells, overall market demand remained weak. Pressured by the high level of inventory and weak demand from China and overseas, some producers’ prices dropped to US$0.313/watt. 

In addition, module prices dropped 0.87% to US$0.571/watt in line with falling prices in Japan.