China's PV industry maintains 90% market share in the EU

On July 27, the official website of China's Ministry of Commerce announced that China and the European Union have reached a price commitment regarding the trade dispute over Chinese photovoltaic (PV) products. This agreement allows Chinese PV exports to continue entering the EU market at prices slightly above the previous average, which is expected to be between 0.05 and 0.07 euros per watt, with a floating range of 9.6% to 14%. The deal aims to prevent a potential trade war while maintaining a fair market share for Chinese manufacturers. The details of the price commitment were not fully disclosed initially, but according to an anonymous source, the ceiling price for Chinese PV products exported to Europe will be set at 0.57 euros per watt until 2015. Additionally, the EU has imposed a cap on the total volume of Chinese PV imports, estimated at 7 gigawatts (GW) per year. These rules are expected to be finalized and officially announced by August 6th. Industry experts believe this agreement represents a significant concession from the EU, as it avoids the imposition of a 47.6% anti-dumping duty that would have raised the effective price of Chinese PV products to around 0.74 to 0.77 euros per watt. This could have severely impacted China’s competitiveness in the European market. Qian Jing, global brand director of Jingke Energy, noted that the EU’s decision to limit the price rather than impose tariffs was a surprise. He explained that the current average export price of Chinese PV modules is about 0.50 to 0.52 euros per watt, meaning the new price floor would only increase by 0.05 to 0.07 euros. Given the projected decline in European demand due to reduced subsidies in key markets like Germany, Spain, and Italy, the 7 GW annual quota effectively grants China 80-90% of the European PV market. However, the agreement also includes strict measures to prevent Chinese companies from circumventing the price limits through tactics such as transferring production overseas, misreporting product specifications, or offering disguised discounts. If any company is found violating the terms, the EU may impose the full 47.6% anti-dumping tariff. While this is a strong deterrent, the agreement has been adjusted to penalize only the violators, not all Chinese exporters. Experts also point out that the price of crystalline silicon PV products depends largely on polysilicon costs and production efficiency. With limited room for further cost reductions in the next three years, the impact on Chinese manufacturers is expected to be manageable. However, the long-term challenge remains whether these companies can maintain their competitive edge without the ability to significantly lower prices. Overall, the deal marks a diplomatic win for both sides, avoiding a major trade conflict while allowing China’s PV industry to retain a substantial presence in the EU market. It also signals a shift in strategy, as Chinese companies are now more constrained in their ability to "circle around" trade restrictions.

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