July 03, 2025

Will China stop calling "double-reverse" on imported polysilicon?

As the Lunar New Year approached in February 2013, anticipation was high. For the Chinese photovoltaic (PV) industry, which had hit rock bottom, this period brought expectations from a different angle. Reports suggested that the Ministry of Commerce would officially announce its preliminary findings on the "double anti-dumping" investigation into polysilicon imports from the U.S., South Korea, and the EU on February 20. The proposed tariff rate could range between 20% and 50%. However, overseas analysts were skeptical. A report from the Maxim Group argued that China might avoid imposing heavy taxes on imported polysilicon, as the impact on domestic PV module manufacturers could outweigh any benefits to local polysilicon producers. In all fairness, trade wars rarely have clear winners—especially in an industry like photovoltaics, which has become highly globalized. Whether in Europe, the U.S., or China, trade sanctions often lead to mutual losses. With the U.S. already implementing its "double anti-dumping" measures and the EU preparing to follow suit, it’s clear that these actions may be seen as economically beneficial for the imposing countries. Before we jump to conclusions about China’s potential countermeasures, it’s important to carefully examine the concerns raised by foreign entities and assess the real pros and cons of the "double anti-dumping" policy. As Sun Tzu once said, “The general who wins the war is the one who knows the enemy and knows himself.” In the invisible battle of trade, this wisdom still holds true. A 20-50% "double anti-dumping" tax rate appears reasonable. In 2011, China imported 64,600 tons of polysilicon, a 36% increase compared to the previous year, with total imports exceeding $2 billion. By January-November 2012, China had imported 76,000 tons from Germany, the U.S., and South Korea—accounting for 88.6% of total imports—worth $1.96 billion, nearly matching the full-year 2011 value. Industry sources believe the 2012 total could surpass 80,000 tons, setting a new record. The "double anti-dumping" complaints against the U.S., EU, and South Korea were initiated by several major Chinese polysilicon companies, including Jiangsu Zhongneng Silicon, Jiangxi Saiwei LDK, Luoyang Zhongwa High-Tech, and Chongqing Daxin Energy. These firms expect the Ministry of Commerce to impose a punitive tariff of 40-50% on the targeted producers. Compared to the U.S., where some Chinese PV manufacturers face tariffs as high as 249.96%, a 40-50% rate seems reasonable. If the final tariff is set at 20-30%, domestic manufacturers can still maintain profitability. Based on the fourth-quarter 2012 spot price of $16-16.5 per kg, a 20-30% tariff would push prices to around $20-24 per kg, reducing profit margins by roughly 25%. This would still leave room for domestic companies to operate without significant losses. Meanwhile, overseas long-term orders present a big opportunity for Chinese PV module manufacturers. Over $20 billion in long-term contracts are currently tied to high-priced polysilicon imports. These agreements, signed years ago at $40-50 per kg, have become a burden as prices dropped to $17-18 per kg. Breaching these contracts would result in hefty penalties and damage credibility. However, the "double anti-dumping" measures offer a legal way out via force majeure clauses, allowing companies to cancel outdated contracts and reduce their financial burden. China could say no to imported polysilicon. While the Maxim Group report warns that higher tariffs could hurt downstream manufacturers, the logic behind it assumes that China relies heavily on imported polysilicon and that prices will spike dramatically. But according to industry data, only six of the top ten global polysilicon producers are still operating at full capacity, while many others are running at 50-80% efficiency. Domestic producers like GCL and OCI are also struggling. However, if the "double anti-dumping" measures are implemented and prices rise to $20 per kg, China's top polysilicon companies could ramp up production to supply over 9-10 million tons annually. At $25 per kg, smaller companies could add another 3-4 million tons. Given that downstream companies only use around 150,000 tons per year, China could easily meet demand without relying on imports. Moreover, domestic polysilicon producers are prepared to manage the market. They understand that rapid price increases could harm the entire industry. Many companies have made it clear they want to keep prices stable, avoiding short-term spikes that could lead to overproduction and lower profits. In the end, the goal is not just to protect domestic interests but to ensure long-term sustainability in the solar industry.

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