Is China's PV industry bouncing back?

NANCHANG -- Things are looking up for China's struggling photovoltaic industry, as many Chinese solar companies have seen orders increase amid a rebound in product prices after the Spring Festival.

About 80 percent of the major PV companies across the country had resumed production as of January, said Liu Jing, an analyst with the Silicon Industry of China Nonferrous Metals Industry Association.

China's PV industry has been suffering since late last year as a result of slumping demand and declining polysilicon prices.

Orders for Chinese PV equipment slumped 80 percent year on year in 2012, according to the China PV Industry Alliance. Last year, up to 90 percent of Chinese polysilicon makers halted production and 80 percent of solar panel producers shut down or sharply reduced output, it said.

As enormous orders have continued to come in, Jingke Energy Co Ltd, a leading solar module maker in east China's Jiangxi Province, has been busy recruiting workers since the week-long holiday ended last month, even though it has already had 6,000 employees engaged in production, according to Yu Musen, the company's vice president.

Meanwhile, prices of PV products started to rise in the beginning of January, Liu said, offering polysilicon as an example.

By the end of 2012, the prices of polysilicon, a key component in solar panel construction, bottomed out at 115,000 yuan to 125,000 yuan ($18,341 to $19,936) per tonne, but prices have marked significant rises since January.

Industry insiders have pointed out that the signs of recovery at the beginning of 2013 should be attributed to the influence of the European Union's anti-dumping and anti-subsidy investigations targeting China's PV market in 2012.

The preliminary ruling on the investigations is expected to be unveiled in May, forcing Chinese PV companies to expand production before potentially unfavorable investigation results affect China's PV market.

Moreover, as of 2012, the Chinese government had rolled out measures to boost its domestic solar market in order to wean the country's PV industry off its dependence on overseas markets amid mounting trade frictions with the EU and the United States, said Tong Xingxue, chairman of LDK Solar Co., one of the world's largest manufacturers of solar wafers.

LDK Solar is expected to secure a 500-megawatt (MW) domestic PV power plant project in 2013, Tong said.

However, the positive signals do not mean China's PV industry has completely recovered, according to industry insiders, who have not shown optimism in their expectations for the country's PV market in 2013.

Meng Xiangan, vice president of the Chinese Renewable Energy Society, said the prospects and the development trend of the PV industry remain unclear, as the essential issues which have plagued the industry have yet to be resolved.