Wacker and OCI benefiting from duties on US polysilicon imported into China, Bernreuter Research

US polysilicon producers are losing market share in China to Wacker and OCI thanks to steep duties on polysilicon imports.

Germany-based Wacker Chemie AG and South Korea’s OCI Co Ltd., the world’s No. 2 and 3 polysilicon manufacturers, respectively, have come out on top after the Chinese Ministry of Commerce (Mofcom) applied steep antidumping and anti-subsidy duties on polysilicon imports from the US, reports Bernreuter Research. Final antidumping duty rates of up to 57% have been imposed on US manufacturers such as Hemlock Semiconductor Corp. and REC Silicon Inc. for the next 5 years, but South Korean producer OCI will get away with a very low tariff of only 2.4%. European polysilicon producers such as Wacker will not have to pay any duties at all, according to Mofcom’s preliminary ruling on polysilicon imports from the EU, released on Jan. 24.
However, notes Bernreuter Reasearch, US suppliers have used so-called processing trade as a big loophole to avoid the high duty rates: Imported goods that are processed into products for export from China are exempt from any duties. Since preliminary duties were imposed on polysilicon imports from the US in July 2013, the share of processing trade in monthly polysilicon imports from the US has risen to values between 90% and 99%.
Despite this loophole, however, US producers are losing market share in China to Wacker and OCI. In 2012, China imported 82,755 MT of polysilicon and in 2013 80,653 MT. US producers held 39% market share in 2012 but only 28% in 2013. Meanwhile, Wacker’s share of the market grew from 25% to nearly 33% over the same period. Imports from South Korea, which are dominated by OCI, grew from less than 24% to nearly 28%. Bernreuter research expects Wacker’s and OCI’s share of the polysilicon import market will grow in 2014, especially if China changes the rules for processing trade of polysilicon – a move it is reportedly considering.

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