Solar: New Tie-Ups as US Ruling Looms 光伏产品倾销裁决临近中国企业忙于外联公关

By newsdoug on February 2, 2012

US solar ruling due in March There are a couple of new tie-ups in the solar space as the US prepares to levy punitive tariffs for China-made panels, one involving Chinese oil giant CNOOC (HKEx: 883) and another involving industry leader Suntech (NYSE: STP). Let’s look at the big picture first, which has Chinese media reporting the US will make its final decision on whether to levy the tariffs on March 2. (English article) I have no doubt that the US will rule against the Chinese solar panel makers, resulting in punitive tariffs for all Chinese panels imported to the US since December 3. That date is important, because Chinese solar firms started exporting huge numbers of their cells to the US in the fourth quarter in anticipation of punitive tariffs, so at least some of those exports will be subject to the new tariffs. I forsee turbulence in the market as China and the US work through this issue, which is likely to end in a settlement around year end that will see China end many of the subsidies that are the source of the complaint, such as low-interest loans and cheap land. Meantime, China companies have embarked on a PR campaign to show the world they don’t receive unfair subsidies and that it’s in everyone’s interest to continue setting up new solar plants. The 2 new tie-ups look at least partly related to that PR campaign. In the first, CNOOC will put $300 million into a new joint venture with Spain’s Isofoton to build new solar plants in Asia using Isofoton panels manufactured in China. (English article) This new venture by a major Chinese state-owned company seems aimed at showing that China supports not only its own homegrown solar companies, but anyone that wants to manufacture solar cells in China. The second tie-up, which looks largely symbolic, involves a new Suntech tie-up with US chemicals giant DuPont. (company announcement) I read the announcement twice and am still unsure what it means, as the language is quite vague. But it does make special effort to point out that the US was a net exporter of materials used to make solar panels last year, reinforcing a previous message that US firms will also be hurt by punitive tariffs. Look for more tie-ups throughout the year, some strategic to avoid US tariffs and others more PR in nature, as the 2 sides work through this issue and hopefully reach a settlement after the US presidential election in November.

Bottom line: 2 new solar tie-ups involving Chinese firms look like PR moves aimed at diffusing a trade war that could come to a head with the US issue of punitive tariffs next month.

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