Polaris solar PV net news: photovoltaic market behind the hot, simmering. Around the “58th article” upstream and downstream firms have argued.
Photovoltaic industry development to date, hot degrees than ever before. In 2015, the power station planned for 17.8GW, accounting for the past 6 years more than half of the total installed PV power station; Similarly, polysilicon in the upstream market, expects a global supply of 350,000 tons this year, of which 160,000 tons of domestic, growth of 16% and 23% respectively. Especially in China, the growth has been enlarged space.
However, behind the hot solar markets, is simmering. Around the “moratorium on applications for polysilicon processing trade imports” (“the 58th article”) or abolition of domestic solar upstream and downstream enterprises, there is a clear difference.
Represented by GCL upstream firms, want the strict implementation “, 58th” restrict polysilicon processing trade imports, make up for the existing policy loopholes and protect domestic polysilicon industry the longi shares represented by the middle and lower reaches of the enterprise, you want to let go of polysilicon processing trade imports restrictions, especially for high-end imported polysilicon, which is more conducive to the development of the domestic high efficiency solar cells.
Of course so divided, and international trade are not unrelated. To address the “double reverse” in January 2014 and May, China respectively from the United States, and Korea, as well as the European Union imported solar grade silicon “double reverse” measures. However, foreign polysilicon manufacturers by means of processing trade imports and avoid sanctions.
Silicon industry branch of China non-ferrous metals Association Deputy Secretary General Ma Haitian introduced domestic polysilicon imports last year reached an unprecedented 100,000 tons, an increase of 26.7% first half of this year, net imports of about 56,000 tonnes, restrictions led to imports of “increased rather than decreased.” To this end, as a means of plugging in the processing trade to avoid “double reverse” offsets, on August 14, 2014, China’s Ministry of Commerce and the General Administration of customs jointly issued the moratorium on solar-grade polysilicon processing trade imports files of the application (the “58th of the text”), which since September 1 last year to suspend accepting applications.
In fact, in the “58th article” implementation, taking into account the interests of the middle and lower reaches of domestic enterprises, polysilicon processing trade enterprises were given one-year reflection period. In face of the file do you want to continue execution, upstream and downstream firms have argued.
So, the policies on the domestic upstream and downstream enterprises, what has been the impact? Upstream and downstream companies and what to consider? In this regard, put in an appearance for the energy journal GCL Vice Lv Jinbiao longi Zhong Baoshen, Chairman of shares.
Of the energy: PV products in the European context of ongoing anti-dumping investigations, polycrystalline silicon products from Europe, China and South Korea are also carried out retaliatory measures, how do you feel about Europe and “double back”?
Lu title: as we all know, Europe uses “double reverse” means to us anti-dumping investigation of photovoltaic products, it’s not fair for us, because on some raw materials and equipment are more to buy from them, we produce products, but are limited to export them. For the United States, domestic Taiwan production is avoided, and now have no way, contain too much.
Meanwhile, they are dumping to China poly silicon. Now in the case of global polysilicon including abroad rely on the Chinese market, as Europe, the United States, and Korea etc poly silicon production is basically no downstream industries, so their polysilicon to be sold to China. International trade is a two-way street, and they do not speak the truth.
Zhong Baoshen: US trade protectionism, has been opposed to the attitude. For the various aspects of the industry practitioners, it is a kind of hurt, photovoltaic industry itself is a common concern, care should be in the industry. To support its development and technological progress. Clean energy faster and inclusive world.
Trade protection policy is in this industry, “blood”, is inhibited and not supported. United States trade policy, tax on China’s photovoltaic products, in fact, is from within the industry, “blood”, such as 5 dollars of ordinary people can buy, now tax had 6, 7, is equivalent to compress the product’s consumption market, hinder the development of industry. The other hand, we also understand that if there are unfair trade, harm for industries in other countries, then launched the investigation, reducing the harm of international trade on the country’s own industry, is allowed by the rules of international trade.
Of the energy: Europe and the domestic photovoltaic products were “double reverse” investigation, which we have taken countermeasures. However, for upstream and downstream businesses, “58th article” is a double-edged sword, you approach them?
Lu title: we very much support the “58th article” because it is a remedy for polysilicon anti-dumping measures. Earlier, in response to European and American “double reverse” we took measures to counter, only to find that our anti-dumping policy and processing trade policies are inconsistent, loopholes in policy, foreign exploitation of this vulnerability, so “58th article” as a remedy to the anti-dumping measures. For us, of course, to support, to safeguard the interests of industry.
Of course, we cannot say that the processing trade policy is not good, it was also played a very big role. Even now is also useful, as in many of our industry is still very weak, and processing trade policy support is required. However, as PV industry has had a baby, it is not necessary to enjoy the policy. Photovoltaic industry has gone through the early stages of development, our products are very competitive, so every year the prohibited list for processing trade, and if the State considers that the product competition ability, there is no need to enjoy this policy because processing trade amounted to national tax policy.
Zhong Baoshen: why do we oppose, in our view, it will affect the entire photovoltaic industry sustainable development in China. Short term, the PV industry in China is now a great deal of investment and employment is concentrated in the downstream, upstream polysilicon industry investment is large, but China PV industry and raw materials higher. Overall, our polysilicon is a net importer. We adopt a “double reverse” measures, after the tax on foreign polysilicon, and raw materials cost increases, thus weakening the international competitiveness of the downstream, this formed an “external pressure in the crowded” situation. Downstream enterprises, China also accelerated the outward transfer.
Why is called “external pressure squeeze”, which itself abroad as “the parties” makes product tax increase for China’s domestic enterprises, competitiveness weakened export business is very difficult on the sales side and on the raw materials side, the domestic double, continue to raise taxes and increase the costs of raw materials and end. Look at it this way, is the Terminal tax increase, raw materials and end tax, raise business costs, further weakening the competitiveness of enterprises. In this “external pressure in the crowded” situation, the lower reaches of the wafer, cell and module manufacturers only accelerated outward shift just to survive.
Of the energy: in your opinion, what impact it will have on the industry as a whole will?
Lu title: China’s PV industry, all strong operating ability, which companies said affected are those who do not have their own technology, can only purchase raw materials processing businesses. Because there is no technology, only the processing capacity, spend a little money to buy equipment, give me foreign polysilicon, wafer processing, and a processing fee.
In this process, each other on silicon wafer processing requirements, six or eight inch, single crystal or polycrystalline, or how much raw film, thickness and thinness provides okay, because such consumption will work out, that is fully in accordance with the other sample processing, it earns is a processing fee. This type of enterprise is affected. For now, the Lungi is not. Longi can buy Silicon material, can sell silicon chips, he can do component, their ability to survive is still relatively strong.
Zhong Baoshen: polysilicon companies, we believe that will not bring substantial benefits. Several large domestic polysilicon companies, regardless of the cost, the scale has been with global competitiveness. In this case, trade protectionism can only protect the backward enterprises. Is similar to a lot of small blast furnace of steel enterprises, the country plans to launch a large, these enterprises see production, opportunities will, polysilicon is the same. But this production is short, even in the absence of foreign companies, China’s enterprises will beat them. Advantages of Chinese enterprises have announced expansion plans, these backward production technology will eventually be phased out.
Longer term, the domestic polysilicon industry will have an impact. As high-end products, at present, few companies can stabilize production, domestic polysilicon quality problems will lead to the decline in the rate of n-type silicon wafers, having overall losses, p-type silicon wafer business concerns. This policy will lead to China losing international high efficiency solar modules supporting capabilities. These domestic high-end wafer enterprise, are for overseas efficient battery pieces supporting enterprise, Shang connection overseas polysilicon material high-end market, Xia connection overseas efficient battery, once lost overseas competitiveness, then, China polysilicon enterprise is lost has offshore supporting of advanced wafer enterprise this quality test window, domestic of polysilicon industry on lack technology traction, this will may led to domestic of polysilicon will in global of low-end, whole industry will will faced more big of crisis.
For domestic manufacturers of these supporting overseas high-end market, from imports of Silicon is more economical and convenient channels. Will be open to the domestic polysilicon test window, such as our common growth plans with the TBEA, GCL Silicon test done before. Through continuous testing results will show how far are these enterprises are high quality, improved further.
Three focus issues
Of the energy: for many downstream companies, they have to worry about. When limiting foreign imports of silicon, polysilicon manufacturers in China will expand to form a monopoly?
Lu title: polycrystalline silicon in the semiconductor era is a monopoly, because technology is the threshold higher, small companies find it difficult to survive. Seven companies worldwide in the semiconductor age, tons more than enterprises do not more, because this material is too specific, and require special high. So it is with China, and hundreds of domestic polysilicon companies a few years ago, thousands of ton of unable to survive. The Ministry has proposed that domestic polysilicon companies in the future five to ten families, one or two, ton, two or three.
In addition, from the polysilicon price trend, a product’s price, if higher at $ 400/kg, low 15 or 16 dollars. That industry is in a State of full competition. Not just polysilicon and PV industry as a whole is, I think, can’t defend, can’t monopoly monopoly. Polysilicon industry characteristics of polysilicon companies are not necessarily unable to compete in the international scale, can only be eliminated.
Of the energy: the data from the first half of this year, domestic domestic polysilicon price less than 130,000 yuan/ton, fell sharply, while domestic production plus imports of about 135,000 tons, consumption was 120,000 tonnes, supply still have excess. So, overcapacity in the domestic polysilicon will be even greater in the future?
Zhong Baoshen: from upstream enterprises are faced with the situation, we believe that excess capacity and falling prices this is a kind of market behavior. By 2014, China polysilicon output increase has been far greater than overseas, almost 3 times to 4 times times abroad increases. Meanwhile, China two years ago, the sales increase last year, far more than the global average increase. This illustrates that the overseas expansion of polysilicon market has stalled. Expansion is mainly companies in China now, and overall excess production, but also in the expansion, the future certainly causes a greater pressure.
China had more than 40 more than polysilicon plant and future survival of only 5 or 6, but now there are more than 10 in production. Why advanced enterprises in the expansion, it is still profitable, advanced in the domestic polysilicon companies are profitable. Earnings last year, its profit was well above the downstream business. However, polysilicon companies are losing money, in this case, policy choices? Part is to exit, because their technology is backward when investment, high costs, poor competitiveness and eventually was eliminated. If we let it continue production of trade protection, but also a waste of resources.
Lu title: from the perspective of implementation of more than a year, restrictions on imported polysilicon not much, after this, in August this year implementation of the truly began, imports on the market as a whole will be reduced by 20,000 tons. First, Korea would be reduced, because they supply, used more than 30,000 tons, is fifty thousand or sixty thousand tons of the overall supply in the future, the overall supply of 80,000 tons of ten questions about 10,000 tons. So it is here that although the amount of anti-dumping duties, the amount will increase.
Meanwhile, we note that more than 10 companies in the country, as we have a ten thousand or twenty thousand tons, increased by ten thousand or twenty thousand tons per year, our capacity is 50,000 tons the previous year, is 67,000 tons last year, is more than 7 million tons this year, about 15,000 tonnes a year, plus the TBEA and other companies, total domestic supply probably increased 3, 40,000 tons a year. That can make up for the gap in foreign countries. This specific situation, so now you can see, this supply of polysilicon oversupply in General. But in recent years, low excess capacity is.
Of the energy: polycrystalline silicon in imported and domestic produce more than 200,000 tons, of n-type Silicon raw material demand is not a large percentage. Domestic demand for polysilicon to cover this part of it?
Lu title: in fact, high expectations for the crystals, especially as minority carrier lifetime, the poly does not need, and p-type single crystal silicon film is not needed, just n-type high, even this polycrystalline silicon, and that several major companies in our country, including GCL-poly, Guinness can provide, just not this trading relationship.
More important question is this material to be used rarely. Last year, photovoltaic industry association, China by 230,000 metric tons of polysilicon in the market as a whole, not used for n-type single crystal 4%. About 8,000 tons, is very small. Of course, imports about 100,000 tons, also has tens of thousands of tonnes of n-type product is not able to do this. Then, some of 130,000 tons in the country can do, to take part can certainly meet the 8,000 tons of.
Zhong Baoshen: n type wafer it of market share is a growth process, now it in whole wafer in the accounted for than is didn’t so more, we is buy part domestic of Silicon material, another part is need from abroad imports, because p type of wafer at any time market requirements and technology progress, also constantly to high-end development, for domestic of Silicon material, is not said p type requirements it on can completely reached. We also bought thousands of tons a year of silicon materials, because the customer’s process is different, requirements are not the same, if they can meet the requirements we will definitely buy domestic, certainly more convenient than the import cost of funds ratio so high in China, buying domestic materials each have advantages, why options.
High end wafer, not just the n-type, efficiency do now more than 20% of p-type battery requirements for silicon wafer is also very high, such as carbon, total metals content requirements are very high. If 20%, we believe that can be achieved at the domestic level, bulk supply, but the conversion efficiency in 20% of p-type and n-type, are currently not stable supply. There is continuity in production, if the material is not stable, businesses won’t be able to organize production, while this raw material testing is very difficult, only produce products to test, in this who was responsible for losses during processing.
Cooperation to maximize the benefits
Of the energy: PV industry in China as the country, both upstream and downstream enterprises has a strong competitive advantage in the international arena, whether better cooperation between upstream and downstream enterprises, realize the maximum benefits of PV industry as a whole?
Lu title: cooperative, uncooperative how could it be possible. Because the industrial chain is connected, even if there is a lot of technology, but technological advances, equipped to solve a lot of things are complementary, are to cooperate in the industrial chain, processes to cooperate, of course, this cooperation is based on the market, using administrative means is impossible.
Zhong Baoshen: upstream and downstream firms have collaborated, also must cooperate. Upstream products sold downstream downstream is upstream of the customers, upstream is downstream of the dealer, in a sense, we are very good, very close to the cooperation. PV industry also is a very promising industry, mainly because it continues to reduce the cost of technological progress, constant improvement in the efficiency, which is the most fundamental point.
Of the energy: for polysilicon market what are the next step in the development of our proposal?
Lu title: I think I should pay attention to the promotion of technology, because the industry from Silicon, silicon wafers, solar module industry chain as a whole has been very advanced, but has to stay ahead of technology, leading enterprises in particular to greater efforts. Then, keep the cost down, through the channels before they can bring down the cost of technology, mass production, then, each enterprise is to contribute to the decline in the cost of, so after so many years, all successful is because doing so, did not succeed is because you violated it, so that’s what today’s situation.
I think we need to sustain this situation, as manufacturing will continue upgrading technology and reduce costs. From a country, funds should support these leading enterprises of the construction and participate in international competition.
Zhong Baoshen: because of the industry’s gross margins are low, downstream industries generally between 15%-18%, upstream margin, on the 20%. Now, even after the implementation of this policy is the lowest pretax Korea polysilicon materials, costs will increase by 6%-20%,
We of recommends is, a is release high-end material (level material above) processing trade, encourages advanced processing enterprise development, don’t let low-end material into China, such both using whole industry balance, pull industry of development, also will makes “double anti-” more effective, II is, put single wafer of export rebate from 14% improve to 17%, through wafer of sales led polysilicon material of export, keep advanced processing technology in international market of competitiveness. Meanwhile, increasing the export tax rebate of Silicon rods and polycrystalline silicon material, since it encourages the industry, should be included in the list of export tax rebates, making it regain international competitiveness. On the basis of the existing, more conducive space for.
Original title: arguing PV “58th article”