Amid Trade War Between US and China

The Korean polysilicon industry will enjoy the reflective effects amid the aftermaths of the trade war.
The Korean polysilicon industry will enjoy the reflective effects amid the aftermaths of the trade war.

 

As the world's two largest economies, the United States and China began a trade war, concern is growing over damage that may be caused by the war. However, some experts say that polysilicon, a material for photovoltaic power generation, will enjoy the reflective effects amid the aftermaths of the trade war.

According to the polysilicon industry and financial investment industry, it is predicted that if the trade war between US and China trade becomes full-scale, the war will impact global polysilicon supply and demand, giving benefits to Korean companies.

This is because the more serious trade friction between the United States and China becomes, the more likely China will maintain high tariffs on polysilicon produced in the United States.

"High tariffs on US-made polysilicon will continue for a foreseeable future due to the US-China trade dispute," said Sohn Young-joo, a researcher at Kyobo Securities. If China continues to maintain high-rate tariffs on US-made polysilicon, China will depend more on Korean-made polysilicon. The Chinese government slapped one-digit anti-dumping tariffs on polysilicon produced by major Korean makers such as OCI and Hanwha Chemical but put high tariffs of 50% or higher on US products. At present, products of OCI and Hanwha Chemical are subject to 4.4% is 8.9% antidumping tariffs.

Korean companies’ market share in China, the world's largest solar market, has risen since the Chinese government imposed anti-dumping duties on foreign-made polysilicon. The market share of Korean-made polysilicon in China recently increased to 40% from 20% in 2013. Meanwhile, that of US-made polysilicon recently dropped to a single digit from the 30% level before the stat of the anti-dumping tariff on US-made polysilicon.

In addition, a polysilicon plant of Germany’s Wacker, the world's No. 1 supplier of polysilicon, in the US state of Tennessee, is reportedly unable to resume operations after an accident last year. This is a positive factor for other companies. Wacker's Tennessee plant has an annual production capacity of 20,000 tons and its global polysilicon production volume is estimated at 78,000 tons.

There is a refutation that as China's high-tariff measures for polysilicon have been put in place so even if China’s trade dispute with the US intensifies, Korean companies will enjoy limited reflective benefits. This is because the Chinese Ministry of Commerce has been already imposing anti-dumping duties of 53.3% to 57% on US-made polysilicon since 2013. 

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution