IHS: Solar glass prices set to rebound following EU-China dispute

From next year, anti-dumping duties levied on Chinese suppliers could contribute to a rebound in the falling price of solar glass, according to a new report from IHS Technology.

Prices for solar glass have fallen by 50% in the five years between 2009 and 2014, which IHS analyst Karl Melkonyan said could be attributed to “massive oversupply” in the market.

The drop is expected to continue in the very short term, hitting a low of US$4.60 per square metre during this year, having begun at US$10.40 in 2009. But IHS claims that, driven in part by so-called anti-dumping duties imposed by the European Union (EU) on Chinese importers, this sub-five dollar price will not remain in place for long. Duties were slapped on to solar glass in May this year after the closure of factories and the loss of profits for solar glass makers in Europe.

The anti-dumping trade dispute has dominated headlines in the international solar industry for some time, designed to prevent Chinese companies from allegedly flooding international markets with high volumes of solar modules. The EU-China dispute reached a price undertaking settlement last year that meant Chinese manufacturers could avoid paying duties by agreeing to sell their products at prices no lower than an agreed minimum.

The settlement has not meant a stop to the spat entirely, with industry representative body EU ProSun requesting this week that the EU holds a formal investigation into whether or not Chinese companies are circumventing duties. The investigation could mean the extension of duties to other countries being used by Chinese firms to get around the import rules.

A similar row has also erupted in the US, lead mostly by module manufacturer Solarworld, which incidentally also set up ProSun. Analysis firm Solarbuzz said earlier this month that the US-China dispute had resulted in a surge of Chinese and Taiwanese PV imports as companies seek to secure low-cost product ahead of the imposition of trade duties. Solarbuzz analyst Michael Barker had said that this showed how “trade disputes can impact the market though often in different ways than originally intended”.

IHS argues that pricing for solar glass will stabilise after this year and by 2018 will have increased by 11% from this year’s all-time low, hitting US$5.90 per square metre.

Melkonyan explained that after the fall of prices, “Chinese government subsidies on solar glass caused domestic suppliers to increase production and exports. However, the European Union’s move to impose countervailing duties on solar glass imported from China will limit supply in the market, leading to an expected increase in prices.”

Going into further detail, the analysis firm showed how it feels the face of the solar glass industry has changed in recent times. Only 7% of solar glass used in Europe in 2010 was imported from elsewhere, a share which increased more than four-fold to hit 30% in 2013. This year, over 90% of those imports will come from China, I.H.S said, while in 2010, only just over a third of that 7% of imported glass originated from China. In other words, from supplying just over 2.5% of Europe’s solar glass in 2010, China now has a share of 27% of Europe’s total solar glass supply.

IHS likened the Chinese solar glass industry’s competitive tactics to that of its module-making counterparts’ previous record. Subsidies for solar glass encouraged Chinese glass companies to join the sector, along with an “aggressive pricing strategy in overseas markets”. This caused the oversupply and price collapse that resulted in the big price drop over the past five years, IHS said.

In May, the EU responded to the oversupply from China, imposing countervailing duties that stood between 3% and 17%. The rate of duties applied to each company depended on how much the manufacturer had received in subsidies from its own government in China.

IHS said the Asia-Pacific region will remain the largest and fastest growing market for solar glass over the next five years, with only Chinese tier-one suppliers providing “high-end products”.

Another finding on the solar glass market announced by IHS was the increase in popularity of anti-reflective coated (ARC) glass. The analysis firm projects that by 2018, ARC glass will take an 85% share of the total market for solar glass.

The coatings, which increase the power output of a module and lower the cost per-watt of solar, have seen their prices rise by about 50% each year in 2013 and 2014, IHS claims. The findings were released as part of the firm’s reporting on wider trends in PV module manufacturing materials, also looking at backsheets, encapsulants, pastes and other materials.