Wind tower row may hurt Chinese firms

BEIJING - Chinese wind-tower manufacturers pledged on Friday to actively challenge a US investigation that could lead to crippling import duties on more than $100 million worth of wind-energy towers from China and Vietnam.

The pledge came after the US Commerce Department announced on Thursday that it was launching anti-dumping and countervailing duty investigations on utility-scale wind towers from the two countries.

The items covered by the investigation are the steel towers that support the engines and rotor blades used in wind turbines with electrical power-generation capacities in excess of 100 kilowatts, said the Commerce Department in a statement.

It alleged China had a dumping margin of 213.54 percent in wind-tower prices.

The decision adds to recent friction in the clean-energy trade between the world's two largest economies.

The Commerce Department is already investigating charges that Chinese solar-panel makers engage in unfair trade practices.

The Wind Tower Trade Coalition (WTTC), a group of US wind-tower manufacturers, filed the complaints with the US Commerce Department and the International Trade Commission (ITC), saying that companies from the two countries are dumping wind towers at prices lower than the US market cost.

The WTTC had previously said it was asking for anti-dumping duties of 64 percent on imports from China and 59 percent from Vietnam.

But in its announcement, the Commerce Department said China is alleged to have undercut US wind-tower prices by nearly 214 percent and Vietnam by 141 to 143 percent.

Some Chinese wind-tower manufacturers said on Thursday that they oppose the charges.

"We are talking to the Chinese Ministry of Commerce about this," said Wang Debao, a deputy director at Chengxi Shipyard Co, whose wind-tower business accounts for almost 10 percent of its annual revenue, which exceeded $1 billion last year.

"We are hiring lawyers to challenge the allegations," said Wang, whose company is a unit of China State Shipbuilding Corp.

Two other Chinese wind-tower makers, Titan Wind Energy (Suzhou) Co and Shanghai Taisheng Wind Power Equipment Co Ltd, also expressed concern, saying any anti-dumping duties by the US could hurt their prospects in a growing market.

However, according to industry insiders, the majority of China's wind-power companies will not be affected by the investigation.

"First, the production of wind-towers doesn't contain too much technology," said Shi Pengfei, vice-president of the Chinese Wind Energy Association. "Second, the export market is still on a small scale for Chinese manufacturers."

He said the Chinese companies can tap the growing domestic market even if the US stops imports of Chinese wind towers.

The towers are most often exported to the US because of lower production costs in China. On average, the cost of a wind tower accounts for 20 percent of a wind turbine, which cost $600,000 each. The price often depends on fluctuations in the cost of steel, which is the main production material.

Wind-tower manufacture doesn't require a large amount of technology, so Chinese companies have cost advantages because of the lower labor costs in China, said Li Shengmao, a senior industrial researcher at the CIC Industry Research Center.

He added that, in addition to the companies listed the investigation, others manufacturers should also be prepared for possible probes.

Reuters contributed to this story.