An ongoing international row over the market for solar panels is spilling over into the supply chain

China is to investigate whether US and South Korean manufacturers of solar-grade polysilicon – a major constituent of silicon solar panels – are using unfair trade strategies when selling into the Chinese market.

Specifically, the Ministry of Commerce will look into allegations of dumping: selling a product in a foreign market for less than it should cost to make it, in order to push out local competitors. The practice is theoretically expensive in the short term for the importer, but over time it builds a reliance on imports that can be exploited. The investigators will also look into whether duties are needed to offset the effects of manufacturing subsidies in the US and South Korea – subsidies that could be enabling dumping by making the low prices cost effective.

This move is only the latest development in an ongoing international row over the broader market for solar panels that is now spilling over into the supply chain. It follows the launch earlier this year of new anti-dumping tariffs for polysilicon in the US.

‘These investigations will have an immediate, adverse impact on US polysilicon manufacturers,’ said Rhone Resch, chief executive of the Solar Energy Industries Association (SEIA), a US trade association. ‘Some have argued that it’s too soon to either start a collaborative dialogue or consider negotiations. We disagree – it’s never too soon to begin work on solutions and forward-thinking action.’