Although the dust has yet to truly settle on the second US anti-dumping investigation and the preliminary findings, mainstream media and financial analysts are already undertaking a post mortem and trying to pick the winners and losers.
Judging by the response from various trade associations and some Chinese PV manufacturers, in general there are no winners.
That hasn’t stopped the speculation, which has initially pointed to US PV manufacturers benefiting the most from the decision, although a negotiated settlement remains on the table between the US, China and Taiwan.
Two US companies, SunPower and First Solar have been quoted the most in a plethora of media articles as key beneficiaries of the AD ruling, while by association with the case, SolarWorld is inferred to also benefit.
The problem with this top down analysis and simple assumptions is the lack of evidence provided to suggest this would be the case.
Reports have failed to highlight that both SunPower and First Solar simply do not have the manufacturing capacity to fill the potential supply void should many Chinese producers decide to look elsewhere for business.
Little thought has been given to the fact that when both companies sell just modules, margins are low and both have spent years developing their business models into PV energy providers (PVEP’s), where margins are higher and offer a controlled and better protected business. Both companies have limited availability of modules for sale outside their own PV power plant businesses regardless of being cost competitive or not with Chinese rivals.
With regards to SolarWorld the scenario is less clear. Having lost market share in the US for several years and continuing to do so after the first AD case in 2012, SolarWorld has a mountain to climb to restore its market position.
SolarWorld's near financial collapse may have been averted via a major restructuring but the company also lacks meaningful capacity in the US to fill the void. New capacity expansions would seem a few years out as it rebuilds its balance sheet.
Small domestic producers such as Suniva, which recently announced a 200MW expansion would benefit but their business model has not been dependent on protectionism, rather they have slowly built a high-performance module market that is also not dependent on the US market alone.
Any small manufacturer in the US could possibly benefit in a small way from the AD decision but other factors such as technology, capital and expertise dictate the benefits, though calling them winners would be over optimistic.
Analysts from the financial community seem to agree in one key area and that is the likelihood that major Chinese producers that continue to see the US as a strategic market would more than likely decide to undertake all manufacturing steps in China, stop using Taiwanese solar cells and pay the already imposed duties under the 2012 ruling, which targeted cells made in China. This would raise module prices in the US but would be the lowest cost approach.
However, looking back at the different duties companies were given in the 2012 ruling highlights that some players are better positioned from an overall penalty cost base than others.
That was spotted by ROTH Capital Partners equity analyst, Philip Shen noting that Trina Solar was a likely beneficiary as it had the 2012 combined (AD and CVD) duties of 23%, compared to the average of its peers of 30.7%.
Shen also pointed-out ReneSola as another beneficiary, due to its 1.1GW of OEM outsourced capacity at multiple locations around the world.
However, other beneficiaries could be REC Solar and Hanwha Q CELLS with production in Singapore and Malaysia. Korean firms could also be added to the list of potential beneficiaries but these companies all have one thing in common and that is the lack of capacity to meet demand now and through 2015 if they don’t start building gigawatt new fabs this year.
This would also be true for Chinese producers wanting to continue to benefit from the US market. Trina Solar, Yingli Green and JinkoSolar fit that profile and potentially could meet increased demand in the short-term from China and take a duty hit but would subsequently be looking at locating cell and module production elsewhere to avoid US duties in the longer term.
Companies that look set to be hit hard by the AD ruling could move production to places like Mexico and Malaysia at low cost should they shift existing tool sets as well and some like Taiwan-based Neo Solar Power have already noted that relocation was an option. However, these types of companies are leaning more towards the losers end than the winner’s end of the ruling.
Finally, there is a company with module manufacturing closer than many to the US, Canadian Solar. To truly benefit from the ruling, Canadian Solar would need to fabricate solar cells at its 500MW capacity module assembly plant in Ontario and boost overall capacity to the gigawatt level and more.
The company has issued a statement on the AD ruling noting that it would continue to serve its US-based customers.
It would seem likely that some of the major China-based producers that look upon the US market as strategic could be the real winners from the AD ruling, while US touted players would have to adapt business models and add capacity to take advantage.
However, none of the above is certain and when taking into account the EU anti-dumping settlement, some suppliers both large and small simply walked away from the EU market.
Should module ASPs rise significantly and fail to track lower over time then the US market has no winners as the market will decline and fade away.