China Drying News China's Ministry of Commerce may have results for the "double reverse" preliminary import of imported polysilicon from Europe, the United States and South Korea in late February.
On the 29th, a reporter from the “First Financial Daily†learned from many parties that some people in the industry anticipate that the “double reverse†initial tax rate may exceed 20%. If this tax rate is achieved, a number of PV downstream production companies in China will also change in the implementation of polysilicon contracts. Some of these companies may terminate their contracts with overseas companies, saving an additional purchase expense.
Preliminary tax rate or 20% or more
From the New Year's Day this year, some polysilicon listed company stock prices have risen to varying degrees. The price of GCL-Poly's shares rose by 40% within a few days after the holiday; the stock price movement of DQ.NYSE came later, but it also rose by more than 70% in 8 days.
Many insiders of the photovoltaic industry believe that the rise in the stock price of these polysilicon companies may be related to the results of the “double reverse†survey announced by the Ministry of Commerce or at the end of February. This time is earlier than originally scheduled. The investigation began on November 1, 2012, and usually ended before November 1, 2013. However, an attorney who participated in the anti-dumping investigation disclosed to the reporter that all parties involved may complete the process in June this year. .
According to an industry insider, they speculated that the polysilicon's initial tax rate is expected to be between 20% and 50%. “After the initial ruling, overseas polysilicon companies involved need to pay a deposit to relevant departments. It is assumed that the final ruling tax rate is lower than the initial ruling. If the tax rate, this margin will be more than pay less." But he also stressed that the final tax situation, still have to wait for the results of the Ministry of Commerce.
An analysis by Gao Hua Securities believes that the Ministry of Commerce did not disclose the scale and scope of the potential tariffs (this “double reverse†case). “We also noticed that the EU is targeting China's crystalline silicon photovoltaic components and key components. The anti-dumping investigation also started on September 6, 2012."
The securities analyst mentioned in the report that although the “double-anti†investigation conducted by the Ministry of Commerce shows that the Chinese government supports the difficult solar industry, more than 60% of China’s export solar energy products are also sold to European markets in 2011. The increasing escalation of PV trade frictions between the EU and the EU may also bring greater challenges to Chinese solar energy companies.
Contract variables
The "double reverse" ruling may affect the rise of domestic polysilicon prices. However, for domestic downstream component companies, one of the problems surrounding them is how polysilicon contracts should be implemented.
According to the aforementioned informed sources, polysilicon contracts are divided into several categories: First, long-term orders (hereinafter referred to as “long ordersâ€) determine the amount and quantity; the other is the implementation of the follow-up market contract for spot prices. The latter has become the most common way for polysilicon upstream companies such as GCL-Poly, Saiwei, Luoyang Silicon, and Big Brand New Energy. “Chinese polysilicon companies do not want to lose big customers. Even if they had previously worked with Suntech, Artes, etc. Such downstream companies signed a “long bill,†but almost all were invalidated, and they were changed to spot contracts as early as last year.
Overseas polysilicon suppliers are different. At present, China's many downstream photovoltaic companies still have 40 to 50 US dollars / kg of polysilicon overseas long-term orders to be executed, and the market price has dropped to 17 to 18 US dollars / kg. However, both the buyer and the seller made a strict agreement on the long list. Once the contract is terminated, the Chinese company will pay a large amount of liquidated damages.
Although the previous downstream PV company, TSL.NYSE, stated that it does not have more than 100 billion US dollars in polysilicon contracts, there are still many overseas polysilicon long-term orders that have not been cancelled and are still being implemented. Detailed explanation.
According to industry forecasts, in the next decade, the total amount of long-term orders signed by Chinese PV companies and parties may still be as high as 20 to 30 billion U.S. dollars.
The aforementioned informed sources said that when the upstream and downstream companies first signed a long-term order, they may indicate a “force majeureâ€. If one of the "double counters" is also regarded as one of "force majeure", then the downstream companies are very likely to use this as a basis to implement the contract with the overseas polysilicon company in the upstream.
At present, only six of the top 10 polysilicon production plants at home and abroad are still under construction, of which the REC (silane) production rate in the United States still maintains 100%, including Germany's WACKER, China's GCL-Poly, South Korea's OCI, etc. The company also has only 50% to 80% of the operating rate. According to statistics of China Gold Securities, other companies such as LDK, Shin Kong Silicon, Yongxiang, and Ruineng are all in the production phase.
The management of a domestic polysilicon company also stated that the impact of the “double-anti†factors and the overall increase in PV demand will lead to an increase in domestic polysilicon production this year, about 100,000 tons, compared with 60,000 tons last year. About 40% of the country's total sales of polysilicon). “Our tens of thousands of metric tons of polysilicon enterprises do not hope that the price of polysilicon will rise too fast at 25-28 US$/kg, which is slightly higher than our cost. Conversely, if polysilicon prices rise too fast, Some small and medium-sized polysilicon companies will also start a large number of recovery and production. It is conceivable that this will be followed by a price war, and soon everyone will once again fall into a state of loss and production suspension.
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