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Chinese solar stocks, SolarCity higher following WTO ruling

  • WTO judges have ruled the U.S. imposition of tariffs on Chinese solar modules, steel products, and other exports violates global trade rules.
  • Though rejecting some Chinese arguments against U.S. tariffs, the judges ultimately ruled the tariffs are inconsistent with obligations under the 1994 Marrakesh accord.
  • The U.S. originally imposed tariffs on Chinese solar module exports in 2012, and followed up last month by slapping new preliminary tariffs meant to close a loophole related to the use of non-Chinese cells.
  • Chinese solar stocks are rallying on an up day for equities: YGE +4.8%. SOL +3.1%. CSUN +5.5%. TSL +2.6%. JKS +2.8%.
  • SolarCity (SCTY +2.4%), which relies heavily on Chinese module imports (that might change in a few years), is also higher.
  • Solar ETFs: KWT, TAN.
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Comments (9)
  • George Wind
    , contributor
    Comments (89) | Send Message
     
    Finally sanity prevails.

     

    Hope that the US government will follow the WTO suggestion and will now lift the current tariffs intended to "punish" the Chinese solar companies.
    14 Jul 2014, 04:24 PM Reply Like
  • jazzfan1
    , contributor
    Comments (96) | Send Message
     
    Disappointing pricereaction by chinese solars (f.i. JKS )
    Why???? I do-not-understand that...
    14 Jul 2014, 04:43 PM Reply Like
  • sayeein
    , contributor
    Comments (12) | Send Message
     
    Jks going over $42 very soon ,Ia
    14 Jul 2014, 06:53 PM Reply Like
  • Solar Guru
    , contributor
    Comments (271) | Send Message
     
    I think the reason why the market reaction is meek is the decision only pertains to CVD determination and not on Antidumping duty . Further US still has options either to go into appeal which would take around 120 days to settle and further at least one year to revise their internal procedures to comply and there is no guarantee that even if they were to modify their CVD determination process how much reduction they would get in CVD duties. Net net I think this has low impact on the solar stocks due to the nature of the WTO dispute settlement process. In the long run most likely the CVD might get removed due to this process or at least get reset after one year. On the other hand Antidumping duty would go through another such litigation process in WTO I suppose.
    15 Jul 2014, 01:20 AM Reply Like
  • jazzfan1
    , contributor
    Comments (96) | Send Message
     
    SG: 1st: thank you.... 2nd: what is "CVD" + "CVD Determination" ?
    Thank you in advance!
    15 Jul 2014, 09:51 AM Reply Like
  • Solar Guru
    , contributor
    Comments (271) | Send Message
     
    Jazzfan there are two components under review in US due to solar world's petetion.
    First one is Anti dumping duty which is set at 18 to 32% in 2012 for made in China cells. The recent petition from Solar world is for the issue that china circumvented the last duty by subcontracting part of the value chain namely cell in taiwan . This portion determination would take place in July 24 .

     

    Second part of duty is CVD which is against the china subsidy to their manufacturers and this provides a unfair advantage to chinese companies against domestic companies in US . This duty in 2012 case was set at 15% for china made cells. Since this duty impact was also circumvented by subcontracting cells mfg to taiwan the solar world petition in last year the US determined that CVD under new rules of mfg location if it is china as 18 to 38% as per their last months ruling .

     

    WTO ruling only applies to CVD case and not to Antidumping case.

     

    Hope this is little more clearer to you.
    16 Jul 2014, 08:55 AM Reply Like
  • jazzfan1
    , contributor
    Comments (96) | Send Message
     
    Excellent explanation, thank you! So the letters "CVD" stand for circumvented Duty....
    Interesting: JKS climbs today + yesterday...
    16 Jul 2014, 09:56 AM Reply Like
  • Dan Terry
    , contributor
    Comments (37) | Send Message
     
    Will the July 24th outcome effect solar panel prices in August? or is this already priced in/being taxed on imports from china? In other words how much of an effect will these rulings have on panel prices in usa?
    17 Jul 2014, 12:17 PM Reply Like
  • Solar Guru
    , contributor
    Comments (271) | Send Message
     
    CVD- Countervailing Duty
    General view is the duty level would be little bit higher than the 2012 level of duty . But this time it would be difficult for china mfg comapnies to circumvent as the 2 out of 3 process step rule is being applied and hence most chinese companies to avoid this duty would have to move out major portion of their mfg processes out of the country which expensive for them. The critical steps under 2 out of 3 rule are Wafering , Cell and Panel manufacturing.
    18 Jul 2014, 07:57 AM Reply Like
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