International Trade Commission to Investigate Chinese Solar Makers

Joel Anderson |

Solar Panels ITC ChinaThe U.S. International Trade Commission stated that there is “a reasonable indication” Chinese imports of crystalline silicon solar panels were hurting American companies because of unfair government subsidies, voting 6-0 to continue an investigation into the business practices involved.

China's Price Dump Hurting Market

If the ITC, responding to allegations from the American arm of German manufacturer SolarWorld (SWV.DE), comes to the conclusion that Chinese solar panels hurt American competition by dumping their product and/or receiving unfair subsidies, it could result in anti-dumping or countervailing tariffs on Chinese panels.

"The ITC's unanimous ruling underscores what American solar manufacturers have argued for months: Without any production cost advantage, dumping by Chinese solar manufacturers and massive subsidies by the Chinese government are enabling Chinese producers to drive out U.S. competition," said Gordon Brinser, president of SolarWorld's U.S. unit, in a statement. “It’s an incremental step, but it is a major step forward. The ITC is saying there’s harm or a threat of injury.”

The allegations come at a time of particular flux for the industry. American solar companies have been struggling as cheap, Chinese-made panels have flooded the market and driven down prices. This, combined with lagging demand in Europe, has made the future unclear for several of the biggest American solar panel makers like First Solar, Inc. (FSLR) and SunPower Corporation (SPWR).

Shares Up on Analyst Upgrade

The news from the ITC comes at the end of an eventful week for the industry that saw many of its largest players posting significant gains. Auriga analyst Hari Chandra stated his belief that Wednesday's move by Central Banks around the world to make cheaper dollars available will ease financing concerns for solar companies. "The near-term band-aid solution would also ease the strains seen in solar PV financing, and aid near-to-medium term demand," Chandra wrote. Solar companies have had a rough year, with an oversupply driving down global pricing and leading many companies' shares to reach multi-year lows.  Chandra, though, upgraded Chinese makers Yingli Green Energy Holding Co Ltd (YGE), Suntech Power Holdings Co Ltd (STP),  and Trina Solar Ltd. (TSL) along with American makers MEMC Electronic Materials Inc (WFR) and SunPower. Each company received a Buy rating with the exception of Suntech, which was upgraded from Sell to Hold.

This has been a solid week for struggling solar stocks as many posted double-digit gains after Chadra's upgrade and the news from Europe proved to be a rising tide. Trina Solar lifted over 23.5 percent, Yingli Green Energy was up almost 18 percent, SunPower jumped 10.5 percent, and First Solar climbed almost 18.5 percent.

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Companies

Symbol Name Price Change % Volume
FMD First Marblehead Corporation (The) n/a n/a n/a 0
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 9.41 -0.11 -1.16 949,849
ITC ITC Holdings Corp. n/a n/a n/a 0
YGE Yingli Green Energy Holding Company Limited ADR 3.04 0.01 0.33 78,396
SPWR SunPower Corporation 6.64 0.12 1.84 2,344,272
FSLR First Solar Inc. 30.15 0.01 0.03 2,311,128

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