[BEIJING] Some China solar stocks jumped sharply on Thursday (Jul 10), continuing a multi-day rise.
This comes on the back of news that Beijing wants to dampen the aggressive cutting that has driven down prices of some components by nearly 30 per cent in the year to May, according to one estimate.
Overcapacity among Chinese manufacturers and price cuts made to clear stock have sparked price wars, worrying analysts that more cuts could entrench deflation and hinder efforts to stabilise the US$19 trillion economy.
Shares of top manufacturer JA Solar rose nearly 10 per cent, having gained 20 per cent since Jul 1, when the top leaders of the world’s second-biggest economy vowed measures to halt the price wars in the solar and other industries.
That step was followed by an industry ministry pledge on Jul 3 to curb price wars and phase out outdated capacity in the solar industry.
Prices in the solar industry fell nearly 30 per cent between May 2024 and May 2025, the Oil Price Information Service (OPIS) assessment for high-efficiency tunnel oxide passivated contact (TOPCon) modules shows. TOPCons are a type of crystalline silicon solar cell.
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Stock prices of peers Longi Green Energy, JinkoSolar and Trina Solar have risen more than 10 per cent this month. The companies did not respond to Reuters’ requests for comment. Last week, Longi told state media it would commercialise high-efficiency products sooner to overcome the low-price dilemma.
Polysilicon has seen an even sharper rise since the beginning of July, with stocks of Xinjiang Daqo New Energy and Tongwei both up 29 per cent.
Shares of Shanghai-listed Daqo closed at 26.48 yuan (S$4.72) on Thursday, their highest in nearly seven months. Daqo did not respond to an e-mailed request for comment, and Tongwei declined to comment.
“Whether solar share price rises this time will be sustainable depends on if effective policy is released,” Pierre Lau, managing director of Citi, wrote in a note on Thursday. He added that previous initiatives to scale back excess capacity in the sector had driven up prices as much as 40 per cent in two weeks in October 2024, to levels that ultimately proved unsustainable.
Prices were also supported by unconfirmed rumours that the powerful state planner, the National Development and Reform Commission (NDRC), held meetings with polysilicon producers asking them to keep prices above cost level. NDRC did not respond to a faxed request for comment.
The market price for polysilicon in China is less than US$4.50 a kilogram, below most manufacturers’ cash costs, said consultancy Berneuter Research.
In addition, Tongwei and polysilicon-producing peer GCL were preparing a plan to set up a new company to buy up excess factory capacity, media outlet Caixin reported, citing people familiar with the matter.
Prices of polysilicon have risen between 18 and 21 per cent over the last two weeks, but downstream solar manufacturers are still resisting the hikes, Citi’s Lau said. REUTERS
