Here Come The Trade Wars: Europe Imposes Duties On China Solar-Panels

Tyler Durden's picture




 

Recent price action amid the heavily shorted solar stocks has seemingly been predicated on hope that late May chatter of negotiated settlements in the industry would occur and everyone could go happily about their business. While hope remains for a settlement - and tariffs have been delayed 2 months, as the WSJ reports - the EU is set to announce drastic anti-dumping levies on Chinese solar panels in a move that could trigger a trade war between two of the world's largest economies:

  • *EU SAYS SOLAR-PANEL DUTY TO START AT 11% ON JUNE 6
  • *EU SAYS SOLAR-PANEL DUTY TO RISE TO 47.6% IN AUGUST
  • *EU'S DE GUCHT SAYS NOT CLOSE TO SOLAR-PANEL PACT WITH CHINA

Sadly this is playing out very similarly to the Great Depression period as tariffs and protectionism replaced domestic focused fiscal and monetary policy and escalated problems rapidly. China rejects the EU's price-dumping allegations, but the problem is not new for Beijing. The U.S. last year imposed punitive tariffs on solar panel imports after finding that China's government was subsidizing companies that were flooding the U.S. market.

 

Via AP:

The European Union is set to announce anti-dumping levies on Chinese solar panels, an official said Tuesday, in a move that could trigger a trade war between two of the world's largest economies.

 

China is the world's largest producer of solar panels and is accused by the EU of selling them below cost to corner the market. Its exports to Europe totaled 21 billion euros ($27.5 billion) in 2011.

 

...

 

The trade row between the EU and China, the world's number one and number three economies, is the biggest anti-dumping case in history by sales volume, according to the EU official.

 

...

 

Still, several EU nations, including heavyweight Germany, have spoken out against imposing special duties and urged the Commission to reach a settlement with China.

 

...

 

China rejects the EU's price-dumping allegations, but the problem is not new for Beijing. The U.S. last year imposed punitive tariffs on solar panel imports after finding that China's government was subsidizing companies that were flooding the U.S. market.

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Tue, 06/04/2013 - 09:51 | 3623286 ParkAveFlasher
ParkAveFlasher's picture

Hi Ho Silver, bitchez!

Tue, 06/04/2013 - 10:00 | 3623312 Rory_Breaker
Rory_Breaker's picture

Great. Now when do we start with the shooting wars? Just get this over with quickly so that we can increase chocolate rations.

Tue, 06/04/2013 - 10:07 | 3623334 MillionDollarBonus_
MillionDollarBonus_'s picture

Solar panels are a good investment. In my opinion the government should be offering grants to green startups, especially innovative businesses getting involved in the wind and biofuel industries.

Tue, 06/04/2013 - 10:11 | 3623354 ParkAveFlasher
ParkAveFlasher's picture

My bus (the Q67) rolls passed the Tesla shop in LIC every morning, you would never think it was multi-billion dollar company.  Tyler, I'll try to send pictures!!!

Tue, 06/04/2013 - 11:20 | 3623580 Pinto Currency
Pinto Currency's picture

 

One way to try to limit silver demand.

At least the Chinese aren't dumping opium in Europe.

Tue, 06/04/2013 - 11:37 | 3623632 ParkAveFlasher
ParkAveFlasher's picture

They aren't?  What makes you so sure? Just because there aren't "dens of savages" in tent cities in Prague doesn't mean opium derivatives are not flooding pharma markets.  Opium is to pain killing as crude oil is to plastics.

Tue, 06/04/2013 - 12:28 | 3623763 SafelyGraze
SafelyGraze's picture

carbon tax, meet anti-carbon tax

"we want to encourage use of renewable energy technologies, and we will do that by discouraging imports of them"

Tue, 06/04/2013 - 13:48 | 3623937 Pinto Currency
Pinto Currency's picture

 

Opium production up strongly in Afghanistan with protection from US military:

http://www.youtube.com/watch?v=GU2yHwVgCgE

 

In 2007 Afghan opium production 2.5x the 2000 production level and up even more now.

http://www.globalresearch.ca/the-afghan-war-no-blood-for-opium/18768

Tue, 06/04/2013 - 14:56 | 3624224 ParkAveFlasher
ParkAveFlasher's picture

So, we war in Iraq and China gets the oil, we war in Afghanistan and China gets the __________ ?

Tue, 06/04/2013 - 10:14 | 3623366 azzhatter
azzhatter's picture

MDB weighing in with the fucktard point of view

Tue, 06/04/2013 - 10:34 | 3623432 AssFire
AssFire's picture

MDB is Leo.

Tue, 06/04/2013 - 10:50 | 3623477 krispkritter
krispkritter's picture

Fuck you. I never signed on to let Uncle Sam give my shit to anyone or make high-risk loans in a rigged market of greedy, incompetent 'green' CEO's and their cronies/henchmen.  You can all screw off and die...

Tue, 06/04/2013 - 10:57 | 3623494 gmrpeabody
gmrpeabody's picture

So..., you're saying you disapprove of government funding...?

Tue, 06/04/2013 - 11:29 | 3623608 krispkritter
krispkritter's picture

Correct, I disapprove of funding any Government...especially ours! ;)

Tue, 06/04/2013 - 13:15 | 3623919 11b40
11b40's picture

Might as well disapprove of air & water.

Tue, 06/04/2013 - 11:41 | 3623642 JimBowie1958
JimBowie1958's picture

Cheif problem with solar is that to make real money you have to have access to the power grid 'back bone' and the local/regional power companies wont let you have direct access unless you sign a an agreement that essentially gives them all rights to any renewable energy credits and pays you only average flat wholesale prices for the power.

In other words, you cant play if your not  in the club and the people in the club couldnt care less about solar power.

Tue, 06/04/2013 - 12:59 | 3623855 DCFusor
DCFusor's picture

While what Jim says is true (in spades where I live - feed in tarriff is 1/7th what they charge for the same kwh) - it's not the only game in town.  I'm simply off grid.  I don't "make money" but I don't hae a bill either - so it amounts to the same thing, at least on a single-family scale - it's freedom from having to make that money, some requirements for building permits and so forth - it pays back nicely.  I have just one bill - phone/internet, and of course the usual car insurance and PP taxes.  That's it.  It's nice.

As to whether China is or isn't dumping, couldn't say - all my panels are American made.  The off-brand cheapies I've tried were worth less than I paid for them (and failed quite young), and I learned quick to go for quality, not price, as the *value* is higher with the good stuff.  Some of the panels in my system are over 30 years old - and still pushing out the power, made by, who'da guessed it - BP solar, yeah, that oil company.  They quit making them awhile back due to no profit, but they were about the best out there of the established brands.  Which I guess is why the profit was low.

Stupid newcomers to solar and other alt energy concentrate far too much on initial price, since no matter how cheap the panels, it's a heck of an investment up-front.  They get screwed over that - it's better to pay ~20% more and get panels that meet spec, last for decades and so on, than to pay less and have them all start failing after 1-2 seasons.  Seems people would rather get ripped off "renting" infrastructure from the power companies than put money down up-front...we see that in almost everything - or there wouldn't be any debt problems.

China did put one hell of a lot of investment into solar and other alt energy, I can see them wanting to get something back out of it.  We didn't - we put money into things like Solyndra, which any engineer, scientist, or even qualified tech would have told them was stupid and not going anywhere.

Germany has made some good stuff at reasonable prices, and yes, subsidized, though I don't know how much.  When BP left the market, I went to their Schott panels, and they are good.

Solyndra was a shit idea, solving a problem that wasn't the problem from the get-go, and it was obvious to anyone who'd been using solar for awhile.  It wasn't about green energy, it was about green money.

While I'm in general against tech subsidies - the reality is they happen, we pay, and you might as well get any benefit that happens as a result, it's the suckers who don't out of emotion.  I think subsidies ought to be restricted to things no one else would do, long term things, basic research that has shown over the centuries to turn out being worth it - just not in "this quarter".  Solar was already going great guns long before any of this - I started out going off grid in '80 for example, and the stuff was there for me to do it - it wasn't a case of "it can't be done without the .gov involved" at all, never was. 

The tech wasn't the problem - the problem was too many people too stupid to invest in their own freedom.  They didn't have the cash upfront since they never had any cash, living in debt from other purchases they thought they needed to make to "keep up with the joneses".  A subsidy won't solve stupid.

Now, my Volt is all charged up again - and I can drive it 40 or 50 miles without putting in a nickel more.  Doesn't that count as "making money"?  I know I had to reduce my cash draw for gasoline for my fleet, as my wallet suddenly got too fat to sit on...looks like income to me, on a relative, cost-avoided basis.

 

Tue, 06/04/2013 - 15:21 | 3624304 mkkby
mkkby's picture

Charging the Volt from solar panels probably takes a week or more, depending on the weather.  Then you get to drive it for an hour... Yippeee! 

"Renting" from the grid as you call it costs nothing expect your energy usage.  Charging the Volt takes less than an hour and costs pennies.  Wow, what a shrewd guy you are.  You get to brag about how tech savvy you are.  I guess it's worth $50k to do that.

Tue, 06/04/2013 - 11:18 | 3623572 Urban Redneck
Urban Redneck's picture

When are the Euro bitchez, going to stop playing the bitch of the unholy triumvirate of Barry, Benny & the Bankstas and accept their destiny?

Tue, 06/04/2013 - 09:51 | 3623287 Mr. Fix
Mr. Fix's picture

This is just a prelude to a massive rate hike at the electrical utilities.

 They are leaving no way out.

Tue, 06/04/2013 - 10:03 | 3623320 oddjob
oddjob's picture

The thought of citizens having their own power source is downright scary for statists.

Tue, 06/04/2013 - 10:07 | 3623329 ParkAveFlasher
ParkAveFlasher's picture

You solar guys are SILLY.  There is not enough cheap silver (or any reflective/conductive raw material) to make it viable due to cost. 

BTW, Jack Lew just said that GE Capital is a systemic risk.  That's only half a trillion in microfibrous credit assets worldwide.  It will only hurt a little </s>

Tue, 06/04/2013 - 10:23 | 3623405 fonzannoon
fonzannoon's picture

systemic risk or systematicaly important? Big distinction even though it's the same thing. They said Prudential was too. That just means we get to bail them out,

Tue, 06/04/2013 - 10:37 | 3623428 ParkAveFlasher
ParkAveFlasher's picture

I read "systemic threat", which I interpreted as "systemic risk", which should damn well be "important".  Yes, they are calling out the next bail out targets. 

Per Wikipedia (which means it can't be wrong lmao):

"GE Capital is the financial services unit of General Electric, one of five major units.[1]

Its various divisions include GE Aviation Services, GE Real Estate, GE Energy Financial Services, GE Money, and GE Commercial Distribution Finance.

GE Capital provides commercial lending and leasing, as well as a range of financial services for health care, media, communications, entertainment, consumers, real estate, and aviation. GE Capital focuses primarily on loans and leases that it underwrites to hold on its own balance sheet rather than on generating fees by originating loans and leases, then selling them to third parties. Most of GE Capital's commercial loans are to small and mid-sized companies, spread across multiple industries and geographies and secured by tangible assets. More than 70% of GE Capital’s loans are under $100 million. GE Capital's consumer lending activities are also diversified by product and geography, and include operations in 55 countries.[2]

As of Q3 2009, GE Capital had 60,000+ employees worldwide, operating in more than 55 countries, with total assets of $551B. It was rated AA+ with stable outlook by S&P."

A half a trillion of bailout to a major credit turbocharger for small to mid sized companies. 

Tue, 06/04/2013 - 10:42 | 3623450 fonzannoon
fonzannoon's picture

It's confusing to me as to why they would bail them out. That's no fun, They gotta let one go so everyone can run into the arms of government backed annuities.

Tue, 06/04/2013 - 10:49 | 3623469 ParkAveFlasher
ParkAveFlasher's picture

And if they bail them out, that's what would happen in essence.  The end consumer of GE Capital's product - credit - would see no difference however it would not be a self-regenerating pool of capital that they would be drawing from, as a successful banking-lending institution should have, it would be a reservoir filled by the Federal bailout pipeline.  So, your Banana Republic credit card that gets you 15% off your linen pants for walks on the beach will be capitalized indirectly by Uncle Sam. 

BTW- I'm just laying this all out there not to explain it to you per se but to rationalize it for myself and the group ... so if I sound like I'm talking from a pulpit, I don't mean to.  I appreciate the interest in the topic as I am hijacking the thread somewhat on a callout.

Tue, 06/04/2013 - 13:46 | 3624038 fonzannoon
fonzannoon's picture

No sweat, thanks, I am running around and just checked in and found the comments interesting.

Tue, 06/04/2013 - 13:05 | 3623886 DCFusor
DCFusor's picture

I refute you thus: http://www.coultersmithing.com/forums/viewtopic.php?f=48&t=563&sid=ddb9c...

Silver used for interconnects in panels is quite cheap as part of the total cost.  It's the glass and frame that actually cost the most, along with the tech to keep it all hermetic though decades of temp cycling and nasty bad weather.  Silver is at most a few grams per 250 watt panel, and there are plenty of replacements possible.  It's just that silver doesn't work-harden as fast in temp cycling, and is *cheap* on this scale, so that's what they use.  If it goes up, OFHC copper can work fine.  Reflective has nothing whatever to do with the use of silver in panels - it's the internal wires, not the active thing at all.

Won't be that long before they use graphene, which is far superior to silver for this anyway.

 

Tue, 06/04/2013 - 14:09 | 3624096 ParkAveFlasher
ParkAveFlasher's picture

+1 Thanks, I was waiting for someone more technically aware than myself to call me out on the reflectivity quip. That said, you are severly underestimating just what kind of market shock a mass conversion to solar would necessitate.  THIS RATIONALE THAT FOLLOWS DOES NOT EVEN INCLUDE THE COST OF BATTERIES WHICH WOULD BE NEEDED EN MASSE AS AN ANCILLARY COST TO SOLAR.  YOU DO REALIZE THAT NO SUN = NO SOLAR, NIGHT = NO SUN, HENCE NIGHT = NO SOLAR SO YOU NEED A BATTERY or ALTERNATIVE POWER SOURCE. 

So let's say, for closing the calculation, 5 grams of AG per 250 watts.  250 watts of dispersed solar collection units, on individual building roofs, and not in mass reflector sites, which may benefit from scale by combining material usage.

New York City peak historical daily demand was 33,035 megawatts or 33,035,000 kilowatts or 33,035,000,000 watts.  http://www.ferc.gov/market-oversight/mkt-electric/new-york.as

At 1 gram per 50 watts, you would need 660,700,000 grams or 660,700 kilograms of silver to manufacture enough panels to generate enough electricity to handle peak usage.  Double that for a cloudy day when solar is 50% less efficient, that becomes 1.3 MM kilograms or 1,321 metric tons of silver.  Add another 40% loss for winter/summer peak difference (daylight hours, solstice vs. solstice), the need is now 1,849,960 kilograms or 1,850 metric tons of silver. Add in the power loss which is sucked up by battery plates storing charge (YOU DO REALIZE THAT NO SUN = NO SOLAR, NIGHT = NO SUN, HENCE NIGHT = NO SOLAR SO YOU NEED A BATTERY IF YOU DISCLUDE ALTERNATIVE POWER SOURCES TO THE ALTERNATIVE), which we may peg at 60% (50% daylight offset plus 10% arbitrary optimum loss while charging).  You now need about 3,000 metric tons of silver to build out enough solar panels to keep NYC online 24/7 in peak demand.  This doesn't include any losses to discharge batteries in the hot sultry July nights when all those co-ops need cooling or else become multi-rack cookie ovens. 

That's about 14% - 15% of a given annual production of silver, to set up NYC - one single city of what, 8MM people, mind you - to operate 100% solar.   If you don't think that would be staggering for a market to absorb, you are dead wrong.

 

 

 

 

 

Tue, 06/04/2013 - 10:09 | 3623340 i-dog
i-dog's picture

True ... so they'll soon start taxing you on square footage of solar panels (captured and calculated by Google Earth).

Tue, 06/04/2013 - 10:15 | 3623367 Headbanger
Headbanger's picture

Exactly. Many many years ago I worked on a co-generation system using a diesel running on heating oil to provide domestic hot water and heating along with some electrical power. I thought we would all have these extremely efficient systems in our homes by 25 years ago. As you can see we're still dependent on big energy companies and thus big government central planning.   This is also why hydrogen or super efficient fuel cell powered cars will never make it cause they would de-centralize the control of energy.

Tue, 06/04/2013 - 10:42 | 3623453 Stuck on Zero
Stuck on Zero's picture

Totem engines or tiny cogeneration units are tremendously efficient.  The only issue has been durability.  If you could build small engines that would run 100,000 hours without maintenance then they would take over the world.

 

Tue, 06/04/2013 - 13:13 | 3623913 DCFusor
DCFusor's picture

Hit the nail on the head, man - it's a fight for central/statist control, not really about the rest.  But for now, you can win that one, or I have been since about 1980.  You just have to take the initiative and do it yourself.

Funny, after a major hurricane here, we had a visit from the rented out of state guys who came in to help our power company restore things.  They looked at my lashup (which wasn't super great then) and laughed - "you can't run a house off this" - but I pointed out I had been for about a decade already.

Then I started a solar sales-install business.  Despite the scorn from power co employees, we caught them numerous times tearing down and defacing our advertising flyers....they felt very threatened.  I gave that one up - one of the few startups I've done that failed.  The real problem was stupid people - not willing to pay upfront, and would rather pay ruinous rates to rent infrastructure from the power co's, since monthly, it looks easier.  Heck, it is easier if you can't wait out the payback time.  But not cheaper if you can - and this was true even when PV panels were $6/watt, instead of the $1/watt they are now.  For one thing, they aren't the only cost - charge controllers, racks, inverters, batteries, labor to install - swamp the panel cost in a lot of cases or are at least comparable.

There are a lot more off-grid people out here in the US than most think.  It's just that most of them are not the type to advertise it much - they tend to prepper opsec...but it's a lot more than you'd think who are totally off grid and off the radar for now - till like someone said, they start trying to tax the sun and find you via google earth or something.  I'm not worried yet - it didn't work out that well for the Greeks when they looked for tax evaders with pools etc from space.  The earth is large...and most of us are in places of very low population density, the ones that don't count with the .gov because there just aren't many voters/taxpayers per sq mile "out here".

 

Tue, 06/04/2013 - 15:20 | 3624301 11b40
11b40's picture

In the 70's, Solar was all the rage, and so was insulation and anything else that could save energy costs.

There were some major tax incentives passed after the OPEC oild embargo in the mid 70's, and a multitude of independent start-up companies were sprouting up all over the place - selling & installing solar, insulating houses and businesses, developing new products and tecniques.  Ceiling fan and wood burning stove sales took off.  A new industry was busy being born...and it was an equal opportunity for anyone who wanted to jump in - 100% domestic, too. And it was very good for the homeowners who took advantage and upgraded to effecient heating/coolinmg syustems, retrofitted windows, installed insulation, and yes, added solar hot water heaters, too.

It took Raygun about 15 minutes to dismantle all of it at the behest of his sponsor - General Electric - when he was elected in 1980.  Had we slapped a big domestic tax on OPEC (Saudi) oil when they drove the price down, and kept going at it on the conservation side of the equation 30 years ago, just think how far along we would be today.

Tue, 06/04/2013 - 11:21 | 3623586 LetThemEatRand
LetThemEatRand's picture

"The thought of citizens having their own power source is downright scary for statists."

This is one of those topics that causes black and white thinkers to go into a feedback loop.  Let's say the people decided to pool their resources and develop cheap solar panels and employ them on homes in places like FL.  This would give individuals their own power source, freeing them from the monopoly of government power supply.  But it would take collective action to accomplish and make it affordable to the average person.   So it must be bad, but it would be good.

Tue, 06/04/2013 - 13:17 | 3623926 DCFusor
DCFusor's picture

It's already happening and I know quite a number of people doing it.  We don't have to develop our own panels - they are cheap already and work fine.  At ~$1/watt, they aren't even the main cost of a system anymore.  It's all the other stuff.

And quite a large fraction of these people also drive things like Nissan leaf or Chevy Volt and run that off their systems...dropping gasoline costs, which helps pay back the initial costs of a system a LOT faster than it used to, since it replaces yet another bill...and dependency on the state systems you normally would have to pay for.

Tue, 06/04/2013 - 10:12 | 3623360 Edward Fiatski
Edward Fiatski's picture

Just ponder on the meaning of the word - "Duty".

Tue, 06/04/2013 - 11:53 | 3623665 pods
pods's picture

You and me both brother.

pods

Tue, 06/04/2013 - 15:31 | 3624335 11b40
11b40's picture

Yes, and tell us who did the new NC Republican Governor work for?

Why, I belive it was Duke.  Yes, yes it was.  He worked for Duke for 28 years, retiring in 2007.  He also served on the Homeland Security Council Advisory Commission from 2002-2006.  While working for Duke Energy, he also served as Mayor of Charlotte, and on the City Council for several terms prior.  He's been a Duke Energy political insider for almost 2 decades.  Didn't take long for them to get that rate increase, did it?

Tue, 06/04/2013 - 09:55 | 3623295 Mr. Magoo
Mr. Magoo's picture

The green economy is a metaphor for massive money printing

Tue, 06/04/2013 - 10:19 | 3623383 Headbanger
Headbanger's picture

It's just warm and fuzzy feel good bullcrap to get Gen-X and Y to lower their expectations of consumption cause the elite know full well the resources and jobs are running out for them.

Tue, 06/04/2013 - 09:56 | 3623298 markar
markar's picture

So the Germans objected but it passed anyway?

Tue, 06/04/2013 - 10:02 | 3623317 SpanishGoop
SpanishGoop's picture

End of the EU as we know and started to love it.

 

Tue, 06/04/2013 - 10:12 | 3623357 i-dog
i-dog's picture

Yep ... it's called an 'EU Consensus'!

Cue Ghordius to explain, in flowery language, with reference to the letter of various treaties, how Brussels had no say....

Tue, 06/04/2013 - 13:25 | 3623958 Craxi
Craxi's picture

I always thought the EU would blow up, not because of PIGS, but because Chinese/German interests would converge. Here we have the evidence.

Tue, 06/04/2013 - 09:58 | 3623302 PiltdownMan
PiltdownMan's picture

We never learn. Trade wars, tariffs, etc result in global economies seizing up.

Schmucks.

Tue, 06/04/2013 - 10:44 | 3623459 Stuck on Zero
Stuck on Zero's picture

People forget.  The modern trade wars originated with Japan, China, Korea, and Taiwan.  They are mercantilist and will not change.  The West needs to slowly shut them out of the trading community until they come around to fair play.

 

Tue, 06/04/2013 - 11:10 | 3623549 overmedicatedun...
overmedicatedundersexed's picture

piltdownman, please educate yourself..tariffs do nothing but provide consumers higher incomes if used correctly which then creates demand for products..that they result in wars is an excuse for the nwo elites to make us all serfs on their capital plantation..try a little creative thinking, not repeating what you were told in school. eyes wide shut syndrome.

Tue, 06/04/2013 - 15:42 | 3624371 11b40
11b40's picture

BINGO!  Tarriffs = common sense.  So you lock your doors at night?  Close the door on your garage?  The gate on your fence?  Lock your car at the mall?

Then, you must be a protectionist.  Why so many have bought this multi-national free trade horseshit for so long boggles my mind, as our jobs drift off to be taken by mercantilist countries for the profit of the multi-nationals.  Meanwhile, our tax base erodes and our infrastructure crumbles around us as we rapidly become a 3rd world country.  Fly into JFK from most large International cities, and it makes you want to cry.

Flame on all you free trade fools, but Ross Perot was right when he said "That giant sucking sound youhear will be our jobs going off shore" after NAFTA passed.  The evidence that he was right is everywhere.  Just look around.

This is only the beginning of the trade wars, which should have started about 25 years ago.

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