China’s solar sector is struggling with overcapacity, which has squeezed profit margins and fuelled price wars. In response, the polysilicon producers have been planning a US$7 billion fund to buy and shut down more than one million tonnes of capacity. A person familiar with the newly formed venture confirmed that it will serve as a vehicle to conduct capacity buyouts from smaller players.
Tongwei shares closed down 3% and Xinjiang Daqo fell 4.1% in Shanghai while GCL slid 5.1% in Hong Kong.
The joint venture is in line with market expectations, making the polysilicon sector share price rally seem unsustainable, Daiwa Capital Markets said in a note. “We doubt whether the poly buyout plan will succeed in 2026 to support the China poly price, considering the soft supply-demand balance,” they said.
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