Business
Chinese Solar Stocks Soar Amid Anticipated Beijing Regulations to Curb Oversupply and End Price War
Shares in Chinese solar companies are soaring based on speculation that Beijing will curb overproduction and competitive pricing. If these measures are put into action, they would bring an end to the price war and weed out companies that manufacture subpar equipment, says an analyst.
Shares in numerous Chinese solar businesses skyrocketed on Wednesday due to speculation that Beijing is set to introduce new regulations for solar photovoltaic production to limit an excess supply and halt a pricing battle within the industry.
Xinyi Solar saw a growth of 12% and its share price rose to HK$3.80, while GCL Technology Holdings experienced a 25% increase, making its share price HK$1.50 in Hong Kong. In mainland China, Longi Green Energy Technology's shares went up by 6.5% to 19.50 yuan, and Sungrow Power Supply's shares rose 4.7% to 98.40 yuan.
Speculation circulated on social media platforms Wednesday afternoon suggesting that the Ministry of Industry and Information Technology (MIIT), the industry's regulatory body, is considering imposing limits on energy usage for Photovoltaic (PV) production in the coming month.
There's also speculation that MIIT might implement more stringent guidelines for the use of production capacity.
"If these facts hold up, it would be a good sign for the solar PV sector, because such measures would halt the ongoing decrease in solar PV costs," stated Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.
Speculation has been circulating following recent commitments from China's solar panel and wind turbine producers to cease price battles in both the renewable energy areas. These sectors are grappling with excess supply and aggressive pricing tactics as manufacturers vie for a piece of the market.
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