China solar stocks slump again after U.S. trade move

(Reuters) - Solar stocks slumped to fresh lows on Friday as investors continued to punish Chinese solar companies a day after the United States said it would impose new duties on imports from the world's leading solar manufacturer.

Suntech Power Holdings (>> Suntech Power Holdings Co., Ltd. (ADR)) was down 4.2 percent, Trina Solar Ltd <TSL.N> slid 5 percent and Yingli Green Energy (>> Yingli Green Energy Hold. Co. Ltd. (ADR)) dropped 7.5 percent, extending declines made on Thursday when the U.S. Commerce Department ruled China-based solar companies had violated trade rules and 'dumped' their products in the U.S. at below-market prices.

The preliminary trade ruling, which is expected to be finalized later this year, puts import duties on Chinese imports of more than 31 percent.

Chinese companies blasted the duties, warning that they would push up prices for solar panels in the United States, making the renewable power systems more expensive.

"We're all trying to use the best global technology to get where (solar) doesn't need government support," Mark Kingsley, chief commercial officer at Trina Solar, told Reuters.

"And the only way you can get there is rigorous, month after month, year after year efforts to get the cost down."

Trina, which sold more than 20 percent of its production in the United States last year, has shifted its production sources to suppliers outside China in order to avoid the duties, and does not expect an immediate dent in its business.

Still, Kingsley said Trina's most efficient solar products, which are made in China, will now be shipped markets other than the United States.

The duties could end up hurting the U.S. solar industry, according to some industry analysts, because they could slow the rapid price declines that have made the technology less reliant on government subsidies.

That is particularly important now, with low natural gas prices making new solar electricity plant look less economically viable, according to Rob Stone, analyst with Cowen & Co in Boston.

"Anytime the United States puts up protective barriers to the benefit of a small group of manufacturers, it distorts global trade and it hurts more people than it helps," said Stone.

Still, the damage to the Chinese solar industry could have a lasting impact, forcing many of the companies to speed their plans to move production sites to new countries.

"The U.S. decision actually marks the peak of solar for China. From here it will become a global business," said Auriga USA analyst Hari Chandra Polavarapu.

U.S.-based solar companies also suffered on Friday, reversing gains made on Thursday after trade duties were announced.

First Solar (>> First Solar, Inc.) shares fell to new all-time lows at $13.75 per share, while shares in SunPower Corp (>> SunPower Corporation), which is majority-owned by Total SA (>> TOTAL), dropped 9 percent to $5.08.

(Reporting By Matt Daily; editing by M.D. Golan)

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