China's Polysilicon Prices Surge Amid Government Pledge to Curb Competition

China's polysilicon prices surged 6.3-6.9% in the week through Wednesday, the most since August 2023, after Beijing's vow to curb competition among businesses boosted optimism in the solar industry. The government's pledge, which didn't specify sectors, sparked speculation that solar would be included in the campaign. Analysts believe the target is to end the price war, not to help the industry's average selling price recover.

Polysilicon prices in China surged by 6.3-6.9% in the week through Wednesday, marking the most significant increase since August 2023. This upward trend follows Beijing's vow to curb competition among businesses, which has boosted optimism in the solar industry [1].

The government's pledge, which did not specify sectors, has sparked speculation that solar energy might be included in the anti-competition campaign. Analysts believe the target is to end the price war, not to help the industry's average selling price recover [1].

In the domestic market, the polysilicon main contract surged 5.03% on July 9, while other metals such as copper and nickel experienced relatively small price fluctuations [1]. The polysilicon price increase is part of a broader trend where metal prices have shown mixed performance, with some metals rising and others falling [1].

The surge in polysilicon prices comes amid a broader context of China's economic growth and development. The National Development and Reform Commission (NDRC) reported that China's average economic growth rate reached 5.5% during the first four years of the 14th Five-Year Plan, despite facing challenges such as the global pandemic and trade bullying [2]. Additionally, China's clean energy sector has seen significant growth, with more wind turbines and solar panels installed in China last year than in the rest of the world combined [3].

The polysilicon price surge is a reflection of the government's efforts to stabilize the market and reduce the impact of price wars. However, the long-term effects of this policy remain to be seen, and investors should monitor the situation closely for any further developments.

References:

[1] https://news.metal.com/newscontent/103418915/Metals-show-mixed-performance-with-LME-and-SHFE-copper-falling-by-over-1-polysilicon-rising-by-over-5-and-alumina-and-coking-coal-and-coke-rising-by-over-2-[SMM-Daily-Review]
[2] https://www.nasdaq.com/articles/cgn-new-energy-power-generation-declines-june-spite-solar-projects-surge-stock-down
[3] https://www.facebook.com/tomdispatch/posts/david-gelles-in-new-york-somini-sengupta-in-bras%C3%ADlia-and-in-tirunelveli-india-ke/1609199466670297/