The US will increase the impact of the US policy on China's solar energy and steel and aluminum products to PA
Policy background
1. **Solar Cell Tariff**: Starting in 2024, tariffs on solar cells (whether assembled into modules or not) will increase from 25% to 50%.
2. **Tariffs on steel and aluminum products**: Tariffs on selected steel and aluminum products will be increased from 0-7.5% to 25%.
### Benefits ###
1. **Solar Cell Tariff Increase**: - **Increased Market Share**: China's competitors' costs have increased, and PA may benefit from this to increase market share.
- **Price advantage**: First Solar may increase orders to PA and increase PA revenue and profitability.
2. **Increased tariffs on steel and aluminum products**: - **Export competitiveness**: PA, as a major aluminum extrusion company in Malaysia, may benefit from the US reducing aluminum imports from China.
- **Price rise**: Global aluminum prices may rise, which will help increase PA's product sales prices and profits.
### Disadvantages ###
1. **Raw material cost**: - **Increased import costs**: If PA relies on raw materials from China, import costs may increase, affecting profit margins. - **Supply chain uncertainty**: Increased tariffs may cause supply chain instability, affecting production and delivery times.
2. **Increased market competition**: - **Alternative market pressure**: Manufacturers in the US and other countries may increase production, leading to increased competition in the market. ### Conclusion **The pros outweigh the negatives**:
- **Market expansion**: PA is expected to significantly increase revenue and profits by expanding market share and increasing orders.
- **Price advantage**: Prices in the global aluminum and solar cell markets have risen, further enhancing PA's profitability.
Overall, the US tariff policy on Chinese solar energy and steel and aluminum products has more advantages than disadvantages for PA. PA needs to maximize the benefits brought by the policy by optimizing the supply chain and production costs.
### Supply chain relationships and business relationships Although P.A. Resources Berhad (PA) itself does not directly produce solar cells, its collaboration with First Solar indicates its important position in the solar energy industry chain.
PA supplies key components for photovoltaic (PV) modules to First Solar through its subsidiary P.A. Extrusion (M) Sdn Bhd [oai_citation: 1, Malaysia's P.A. Resources Berhad Secures RM1.08 Billion Extension With First Solar For PV Module Production - SolarQuarter] (https://solarquarter.com/2024/01/24/malaysias-p-a-resources-berhad-secures-rm1-08-billion-extension-with-first-solar-for-pv-module-production/)。
### Correlation analysis
1. **Location in the supply chain**: - **PV module supplier**: As a long-term supplier to First Solar, PA supplies extruded aluminum products and other critical components that are used to manufacture solar cell modules.
- **Contract Value**: The total value of the supply contract with First Solar was RM 1.08B (approximately USD 23.2 billion) covering 2024 to 2025, indicating its importance in First Solar's supply chain [oai_citation: 2, Malaysia's P.A. Resources Berhad Secures RM1.08 Billion Extension With Extension First Solar For PV Module Production - SolarQuarter] (https://solarquarter.com/2024/01/24/malaysias-p-a-resources-berhad-secures-rm1-08-billion-extension-with-first-solar-for-pv-module-production/)。
2. **Market Impact**: - **Tariff Policy Impact**: The US increases tariffs on Chinese solar cells and steel and aluminum products, which may cause US companies such as First Solar to increase their procurement of PA and reduce their dependence on the Chinese supply chain.
- **Market expansion potential**: PA's position in the global PV module market may be strengthened as a result, driving its revenue and profit growth.
### Conclusion ###
Although PA does not directly produce solar cells, its cooperation with First Solar as an important supplier of photovoltaic modules has placed it in an important position in the solar energy industry chain. The US tariff policy may bring PA more business opportunities and further enhance its competitiveness and profitability in the global market.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
