Manufacturers hurt by EU solar tariffs

Punitive tariffs imposed by the European Union on solar panels made in China have hit Chinese solar companies severely, although the duty rate turned out to be lower than expected, analysts and industry insiders said on Wednesday.

The European Commission announced on Tuesday the imposition of a provisional anti-dumping duty of 11.8 percent on photovoltaic products from more than 100 Chinese manufacturers.

The rate may be increased more than fivefold in August if the EU and China fail to reach a settlement, in which Chinese exporters will be required to increase their prices and accept an annual quota for exports to the European market.

Wang Liusheng, an analyst with China Merchants Securities Co Ltd, said that although the current rate set by the commission leaves some room for negotiation, a great deal of damage has already been done to Chinese solar companies whose major market is in Europe.

China may draw up similar anti-dumping plans against polysilicon materials from Europe, which will push up the price and benefit Chinese silicon material companies in the short term.

But he added that if a trade war broke out, both sides would lose out.

Several major Chinese solar companies saw their shares plunge on Wednesday. Shanghai-listed Hareon Solar Technology Co Ltd, a leading manufacturer of solar modules, slumped by 3.21 percent to 6.93 yuan ($1.13).

Yang Huaijin, CEO of Hareon Solar Ltd, said the preliminary ruling was "totally unacceptable".

The European companies are less competitive because they have depended on government subsidies for a long time. It is irrational for the EU to protect them by setting up trade barriers, Tencent Finance cited him as saying.

"Trina Solar is disappointed with the European Commission's preliminary ruling, as we disagree that we have dumped imports into the European market. The decision will negatively affect the European solar industry and is against the interests of the global solar market," said Ben Hill, president of Trina Solar Europe.

The commission may increase the duties on Aug 6 to a range of 37.2 percent to 67.9 percent unless an agreement is reached.

A final ruling scheduled in early November will decide whether to turn the provisional duties into "definitive" five-year measures.

In an opinion poll carried out prior to the preliminary ruling, a total of 18 EU members, including Belgium, Germany and the United Kingdom, opposed the commission's plan to impose hefty tariffs on solar products imported from China.

Analysts said if the situation continues, the commission will be unable to get the final ruling imposing duties passed by EU members.