Companies in China's solar power industry are expected to start feeling the impact of the ban on the import of polysilicon this year, the Economy & National Weekly said.
The ban was implemented by the government on Sept. 1 last year to deter foreign polysilicon suppliers from evading tariffs on their products through processing trade, according to the magazine.
The Chinese government introduced the punitive tariffs on imports from the United States, the European Union and South Korea in 2014, after the U.S. and EU put heavy anti-subsidy and anti-dumping duties on China's solar products.
According to the article, a two-week gap between the announcement of the ban and its implementation in 2014 allowed foreign polysilicon producers to secure processing trade orders of over 100,000 tonnes from Chinese companies.
Since the orders are valid only for one year, downstream Chinese solar companies asked the government to lift the ban, while upstream companies have opposed the plan.
The report said that polysilicon products ordered after the 2014 ban and imported under processing trade will be subject to higher tariffs.
Chen Huiqing, head of legal affairs at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said that the government lifting the ban will depend on the U.S. decision after the final review of the anti-dumping and anti-subsidy case against Chinese solar companies in July.
Xi'an Longi Silicon Materials Corp. wrote to the Ministry of Commerce on April 30 calling for the ban to be lifted, reasoning out that domestic suppliers of polysilicon were unable to meet demand in the downstream solar sector in terms of either quantity or quality. Other solar module makers such as Trina Solar and Yingli Solar, Zhonghuan Semiconductor Corp. and Shaanxi Non-ferrous Metals Holding Group (Shaanxi Youser Group) supported Longi's call in another letter dated May 25.
Li Jing, an analyst at the China Non-ferrous Metals Industry Association's silicon industry branch, said that the two-week gap in 2014 has pressured local polysilicon suppliers to reduce their prices to compete with foreign companies, which drove local suppliers to the limit.