Photovoltaic firms rebound robustly in HK stock market on Monday September 3, as European Commission’s decision to scrap limitations on sales of solar panels exported from China took effect midnight the same day.
To name a few, GCL-Poly Energy Holdings Limited saw in its share an 11.32 percent increase, hitting 59 HK cents (equivalent to about 8 U.S. cents), and Xinyi Solar, saw a 3.85 surge to HK $2.43, and Flat Glass Group Limited witnessed a 4.03 percent rally to HK $ 1.29.
In the past five years starting from June 2013, there had been EU measures of anti-dumping and anti-subsidy targeting solar panel imports from China, which forced Chinese companies to sell products at higher than minimum-import-prices, compromising their competitiveness in terms of price.
A technician works on photovoltaic products [Photo/China Daily]
On Friday August 31, the EC announced that these measures will be gone upon expiry on September 3, despite that this industry in the EU requested for an expiry review investigation.
Read Also: Italy: A Solar Energy Paradise in Europe
Trade frictions between China and EU over solar panels started in 2012, around that time, Europe was the major export destination of China’s solar power panels, with 70% of the exports hitting EU market.
In order to protect local struggling solar power firms, EC decided to leverage limitations against Chinese rivals. Measures were first imposed on Chinese solar panels, wafers and cells starting from June 2013, which should have been ended in March 2017, but instead were extended for another 18 months in March 2017, and is due in September 2018.
According to some independent research institute, these limitations hurt both sides. The 20 percent of retaliatory tariff the EC levied on Chinese photovoltaic products had cost EC about 175,500 jobs, 18.4 billion Euros of value added for photovoltaic industry in three years that followed. On the other hand, these limitations stung Chinese firms, whose market share of component products plummeted to less than 10% (500 MW) in 2017 from the heyday figure of more than 80% before the existence of such MIP.
The latest move has been well received among Chinese firms in solar power industry, who lauded it for setting a good example of free trade. Analysts believe that China’s photovoltaic firms would see concrete benefits brought about by the termination of the restrictions. However, given that the European market seem to be rather conservative and stable, the ending won’t bring an immediate increase in demand of Chinese panels, price cuts-led demand rise is expected to emerge next year at the soonest.
China’s Ministry of Commerce welcomed the termination, describing the move the EC takes as a “model for successful resolution of trade frictions through consultations”.