China Broadens Solar Dumping Probe to Polysilicon

Chinese regulators ratcheted up the global fight over the troubled solar-energy industry on Thursday as it launched a probe into the trade practices of European solar raw-materials suppliers.

China's Ministry of Commerce said Thursday that it has launched an investigation into whether European companies are selling polysilicon, used to make solar panels, at unfairly low prices. It will also probe whether the companies received illegal subsidies.

European officials couldn't be immediately reached for comment. Chinese officials didn't name specific companies.

The move is part of the escalating fight between China and its trading partners over the solar power sector this year. The European Union announced in September that it would investigate Chinese imports of solar panels, while Indian companies have lobbied their government to do the same.

The U.S. Commerce Department has already announced provisional anti-subsidy and anti-dumping tariffs on imports of Chinese solar panels and cells. The U.S. tariffs will take effect if the U.S. International Trade Commission determines that Chinese dumping of solar products injured U.S. companies. Its decision is expected this month.

A wave of bankruptcies has hit major solar companies in both the U.S. and Germany over the past year due to an industry-wide decline in prices and economic problems in some key markets. German conglomerate Siemens AG SIE.XE +0.44%said last month that it planned to pull out of the solar business due to sinking prices and cutbacks in government support for solar-thermal projects.

China's Ministry of Commerce said in separate statements on Thursday that there is enough evidence to move ahead with its own investigation into European imports, which will be combined with existing anti-subsidy and anti-dumping probes of U.S. and South Korean imports launched earlier this year.

The investigation could take up to a year, with a possible extension through the end of April 2014, it said.

China's imports of EU polysilicon jumped 30.8% in the first half of 2012 compared with the same period a year earlier, reaching 9,300 metric tons, the state-run Xinhua news agency has said, citing the China Nonferrous Metals Industry Association.

In the same period, prices for polysilicon in China fell to $27.50 a ton, a decline of 47.5% from a year earlier, Xinhua said, citing the association.

The commerce industry was urged to initiate an investigation on behalf of four major Chinese polysilicon manufacturers, it said. The move also comes after the ministry said in August that preliminary evidence showed that U.S. government support for six clean-energy projects in five U.S. states violated World Trade Organization rules.