Chinese Solar Stocks Face Double Blow: Price Floor Pledge Lifts Sentiment, U.S. Tariffs Weigh
Claire Weston
Eight major Chinese polysilicon makers signed a pledge not to sell below production cost, sending Tongwei's shares up as much as 8.9% intraday; but Trump's plan to impose tariffs on polysilicon and derivatives had already knocked the same stock down 3.8% earlier in the week — domestic price floors and overseas tariffs are pulling China's solar sector in opposite directions at once.
How many swings did Tongwei take in one week?
Monday: China's market regulator convened a pricing-compliance meeting for solar firms. Tongwei hit the 10% daily limit up.
Thursday: news broke that Trump plans tariffs on imported polysilicon. Tongwei fell 3.8%.
Friday: Tongwei and seven other polysilicon producers jointly signed a below-cost pricing pledge. The stock rebounded as much as 8.9% intraday.
This means → one stock was yanked by two opposing forces in three days — a microcosm of the domestic-versus-overseas pressure gripping the entire solar industry.
Will the price-pledge alliance actually work?
The eight producers committed not to sell polysilicon below production cost. Shanghai Metals Market (SMM) argues the pledge will force low-price supply out of the market.
Jefferies analyst Alan Lau questioned the "sustainability and magnitude" of any polysilicon price rebound.
In plain terms = the bulls think drawing a price floor eliminates reckless undercutting; the bears think a voluntary pledge has no enforcement teeth, so how high and how long prices bounce remains an open question.
What does the polysilicon market actually look like right now?
The China Silicon Industry Association did not publish a polysilicon price this week — the market is nearly frozen, with no new orders.
Its weekly report noted that prices have fallen below production cost; producers have stopped quoting and are waiting for direction.
Downstream prices are equally stuck: wafers flat, cells at RMB 0.25–0.26 per watt, modules at RMB 0.67–0.68 per watt — all unchanged week-on-week.
This reflects a standoff across the entire supply chain — nobody wants to move first — and whether the pricing pledge can break the deadlock remains to be seen.
Which route do the U.S. tariffs cut off?
China does not export solar modules directly to the U.S.; instead, Chinese firms buy Chinese upstream materials, process them in third countries, and re-export to America.
Trump's tariffs cover ingots, wafers, cells, and modules, and set a minimum import price — This means → they don't just raise costs; they block the "low-price detour" entirely.
In plain terms = Chinese producers used to set up plants in Southeast Asia, use Chinese feedstock, and ship finished goods to the U.S. That indirect export path is now severed end to end.
Where is the overseas exit for Chinese producers?
SMM analyst Chen Jiahui noted that as more countries demand local solar supply chains, Chinese firms face a triple challenge: policy risk, labour costs, and supply-chain complexity.
Her verdict: "The simple export-trade model will change; firms will shift to joint ventures and local manufacturing to capture overseas profit."
This means → the playbook flips from "made in China, sold globally" to "partner locally, build locally" — margin profiles and operational complexity both change.
Are there any signs the sector's fundamentals are improving?
Trina Solar posted a first-half net loss of RMB 269.9 million, sharply narrower than the RMB 2.92 billion loss a year earlier; the company credited government measures to curb overcapacity and gains from disposing of equity assets tied to earlier strategic deals.
A new national power-system plan allows the curtailment rate — the share of renewable energy generated but wasted — to rise to 15% in some regions, though the national cap stays at 10%.
In plain terms = losses are shrinking, but whether the price-pledge alliance can truly stabilise polysilicon prices and whether the overseas profit model can pivot smoothly are the two key checkpoints for judging real sector recovery.
Content is for reference only, not financial advice.