China solar producers warned about price gouging as officials decry supply shocks from soaring polysilicon cost
- Two government entities recently summoned major solar polysilicon producers for discussions about their self-discipline and self-management
- Analysts said supply and demand issues are the primary factors in a nearly fourfold increase in polysilicon prices since the start of 2021
Chinese authorities have summoned major solar producers for meetings, ordering them not to engage in price gouging or hoarding amid 10-year-high polysilicon prices that have sent shock waves through the supply chain.
The Ministry of Industry and Information Technology (MIIT), together with the State Administration for Market Regulation and National Energy Administration, recently summoned major solar polysilicon producers and ordered them to strengthen their self-discipline and self-management, the ministry said on Sunday.
Prices of some domestic photovoltaic (PV) products have risen sharply recently, causing severe shocks in the industry, the MIIT said in a post on its website. The ministry pointed the finger at the price gouging and hoarding practices of some companies, although it said the complex international trade environment, the Covid-19 pandemic and high demand were also factors.
MIIT said in the announcement that solar companies should focus on “the big picture” and the long-term, high-quality development of the industry. Companies should reasonably proceed with the construction of photovoltaic projects and make careful plans to build new large-scale capacity, according to MIIT.
“The market fundamentals for polysilicon are relatively tight, mainly because of rapid growth in the overseas market for solar PV panels, plus the limited new supply of polysilicon manufacturing capacity in recent years,” said Lucas Zhang Liutong, director of Hong Kong-based consultancy WaterRock Energy Economics.