PETALING JAYA: The imposition of anti-dumping (AD) and countervailing duties (CVD) on solar cells from Malaysia and neighbouring countries Cambodia, Thailand and Vietnam by the United States is expected to have a minimal impact, as US imports account for only 5% of global solar panel manufacturing capacity.
TA Research, however, expects that in the short term the move could lead to some volatility in global solar module prices due to potentially idled capacity within the four affected countries, before US import substitution kicks in.
“Given most of the local listed solar players operate within the downstream segment – mainly in the engineering, procurement, construction and commissioning, and asset ownership space – we believe the latest solar cell/module tariff by the United States would have a largely neutral impact on the sector, notwithstanding potential positive implications from temporarily weak solar module prices given an increase of idled cell/module manufacturing capacity in the short term,” the research house stated in a sector report.
Among the four South-East Asian countries, Malaysia will face the lowest duty rate at 8.59%.
However, some companies based in Malaysia may be slapped with duties as high as 81.24% due to non-cooperation with investigations.
The US move was said to have originated from a request by the American Alliance for Solar Manufacturing Trade Committee for an AD and CVD investigation.
This was due to competition with cheaper South-East Asian panels and alleged Chinese-driven capacity within the four countries, aimed at avoiding existing tariffs on Chinese solar exports.
“In addition, given that manufacturers are now barely breaking even, we believe global solar module prices may already be close to reaching a floor at current levels,” TA Research noted, adding that several potential outcomes are anticipated now.
It expects manufacturers may shift production to countries not impacted by the tariff, such as India, Indonesia, Laos and also South Korea.
This could potentially lead to a temporary disruption and adjustment in the global supply chain.
Solar panel costs in the United States are expected to rise in the short term, as higher tariffs drive up expenses for domestic solar developers.
However, the research house said the move may ultimately encourage investment into US solar manufacturing and expand production capacity.
TA Research pointed out that the tariffs slapped on the four South-East Asian countries are much higher than the cost premium of US$0.135 per watt, or 139% more.
It reckons that the latest tariffs are sufficiently high to have an impact on the volume of imported solar cells and modules from these exporting countries into the United States.
The research house maintained an “overweight” call on the power and utilities sector, with Tenaga Nasional Bhd
, Samaiden Group Bhd and Malakoff Corp Bhd as its top picks.
