Market Analysis June 2013 - Chinese manufacturers blow off the European market after entry into force of anti-dumping tariffs

We may call it calculus or defiance – it is a certainty that Chinese modules only reluctantly find their way to Europe at the moment. Until recently it was no problem for an investor or project developer to buy modules for larger projects directly from Asian manufacturers and to get them delivered on schedule, but the situation has now changed radically.

Currently hardly a manufacturer sends its containers filled with modules to Hamburg, Rotterdam or Antwerp without having received a supply contract first. All freely available goods that have been deposited in the past few months at least sporadically in European interim storage facilities have been sold off. Whoever currently asks for products of major manufacturers such as Yingli, Trina and Canadian Solar is directly lead to the respective distributors or system integrators. Most of them have secured larger quantities at their own risk in their warehouses. The prices have been raised according to the risk premium and the new Customs Tariff.

New orders for Chinese Tier1/Tier2-products have delivery commitments for mid to late July at the moments. But there is still a risk that due to transport problems the goods could even be delivered in August. No one can say what kind of consequences we have to expect right now. The lately announced tariff surcharges of 11.8 percent are only a transitional solution for June and July. If the anticipated tariffs of around 38 to 68 percent really come into force in August, the import of modules to Europe may financially ruin many buyers, or they will do anything to cancel the purchase contracts. And the market reacts accordingly listless and cautious to the offers.

It is claimed that the attitude of Chinese suppliers is not only due to customs issues, but also due to the fact that markets like Japan, North and South America and China absorb too many modules themselves. However, given the reported numbers of installations compared to the huge production capacity this seems to be rather implausible. It is more likely that China would like to demonstrate impressively how dependent the Europeans are on their goods, especially in the photovoltaic industry. Now it is up to us to break this blockade either by entrusting our politicians to end the whole anti-dumping affair – or soon we will have to focus again on our local manufacturers and swallow the bitter pill of high prices. This might be an acceptable deal if we could then expect a higher quality and durability of the products.