Some of US-based polysilicon suppliers are building up their inventories in preparation for the China market, as they anticipate a settelment between Beijing and Washington on their solar trade war, according to industry sources in Taiwan.

The US suppliers believe negotiations between the two governments will finally reach an agreement to remove the US punitive tariffs on China-produced PV products, and ease China's ban on US-produced polysilicon imports going through its tariff-free export processing zones.

China-based crystalline silicon solar cell and PV module makers are subject to tariff rates of about 30% on average for exports to the US market, while US-based polysilicon going into China is subject to tariff rates of over 50%, the sources said.

If the negotiations do not reach such a settlement, these US-based suppliers may have ease their high inventories by dumping polysilicon in markets other than China, the sources indicated.

Currently, spot prieces for polysilicon stand at US$21.5-22.0/kg in the China market and about US$19.0/kg in others, the sources noted.