Solar-panel maker warns of import holdups as U.S. cracks down on China

Solar panels Image: Pixabay

Canadian Solar Inc. warned that all panel imports from China risk being detained by U.S. Customs as the Biden administration cracks down on alleged labor abuses in the Xinjiang region.

Four of Canadian Solar’s sample modules shipped from China to its U.S. office were held by officials last week due to a sourcing issue, according to the Ontario-based manufacturer that has most of its factories in the Asian country. While the number of imports affected was limited, “it seems that all solar module shipments from China are detained” by U.S. Customs and Border Protection, a Canadian Solar spokesperson said Monday.

The seizing of shipments risks delaying solar projects as the industry has also faced rising module prices and freight costs. In June, the U.S. banned imports of equipment that may have used raw materials originally from Hoshine Silicon Industry Co., an industry leader in the solar supply chain, as part of efforts to confront alleged human-rights abuses involving China’s ethnic Uyghur Muslim minority in Xinjiang.

A U.S. Customs spokeswoman didn’t address whether solar-equipment shipments had been stopped and said she was unable to disclose specific importer information. A Hoshine spokesperson declined to comment.

The Spokesperson’s Office at the Chinese Foreign Ministry said they were not aware of the specific situation and reiterated that forced labor in Xinjiang is an “outright lie” created by the U.S. “The real purpose of relevant actions by the U.S is to restrict and suppress Chinese solar enterprises.”

Chinese solar stocks declined Monday after analysts at Roth Capital Partners and Credit Suisse last week said in research notes that the U.S. appeared to have begun halting shipments of some solar panels.

“Preliminary checks with solar distributors suggest that 40MW of solar modules might have been detained (likely JinkoSolar modules), though this is yet to be confirmed,” Credit Suisse analysts including Maheep Mandloi said in a research note Friday.

JinkoSolar didn’t reply to messages seeking comment. JA Solar Technology Co. said in an email that “up until now” its modules haven’t been detained and the company’s exports haven’t been affected.

Hoshine is a dominant supplier of metallurgical silicon used to make polysilicon, a chief ingredient in solar panels and semiconductors worldwide. The Canadian Solar spokesperson said the company doesn’t directly trade with Hoshine.

“The stark reality is almost any module coming to the U.S. cannot yet prove it does not have Hoshine silicon metal as we believe the traceability protocols do not yet go that far up the supply chain,” Philip Shen, an analyst at Roth Capital Partners, said in an Aug. 12 note. “We would not be surprised to see delays in the arrival of modules as vendors attempt to reroute shipment.”

© 2021 Bloomberg L.P.

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