Chinese solar stocks jump on rumours Beijing will stifle excess supply, price war
Moves, if implemented, would end price war and eliminate less-capable firms that churn out low-quality equipment, analyst says
Stocks of several Chinese solar companies surged on Wednesday amid rumours that Beijing will unveil new rules for solar photovoltaic (PV) manufacturing to curb oversupply and a price war in the sector.
Xinyi Solar jumped 12 per cent to HK$3.80, and GCL Technology Holdings rallied 25 per cent to HK$1.50 in Hong Kong. On the mainland, Longi Green Energy Technology surged 6.5 per cent to 19.50 yuan and Sungrow Power Supply gained 4.7 per cent to 98.40 yuan.
Rumours on social-media sites on Wednesday afternoon said that industry regulator the Ministry of Industry and Information Technology (MIIT) is planning to implement restrictions on energy consumption for PV production next month.
Other rumours said MIIT would introduce stricter requirements for utilisation rates of production capacity.
“If these are all true, it will send a positive signal to the solar PV industry, as such policies will suppress the continued decline of solar PV prices,” said Lin Boqiang, dean of Xiamen University’s China Institute for Studies in Energy Policy.
The rumours followed recent pledges from China’s PV and wind-turbine manufacturers to end price wars in the two clean-energy sectors, which are both struggling with overcapacity and fierce price competition as producers fight for market share.
