Beijing’s fight to quash solar-sector price war paying off, analysts say
Outlook brightens for beleaguered supply chain, with makers of polysilicon possibly returning to profitability this month
Beijing’s fight against disastrous competition in the solar-equipment sector showed early signs of success, with a sustained recovery in prices likely to return leading polysilicon makers to profitability after 18 months of losses, according to analysts.
A raft of initiatives – including a proposal to limit manufacturing plants’ power use – following a series of government-industry meetings to discuss self-imposed production controls, had borne early fruit, they said.
“Upstream solar-product prices continue rising this week, up 2 to 4 per cent week on week, supported by positive policy sentiment on industry capacity consolidation,” said Pierre Lau, Citigroup’s head of Asian utilities and clean energy research, in a report on Thursday.
Between early last month and early this month, prices for polysilicon, solar wafers and solar cells have risen 5 to 7 per cent, said Gary Zhou, Deutsche Bank’s head of renewables and utilities research.
“At current spot [market] prices, we estimate top-tier polysilicon producers such as GCL Technology may turn to a positive net profit margin starting from September, one of the earliest along the solar value chain,” he said in a note on Thursday.
GCL shares fell 2.2 per cent to HK$1.36 on Thursday, as the Hang Seng Index declined 1.4 per cent. The stock has risen 8 per cent since the energy caps were proposed.