Eight Chinese polysilicon producers controlling over 90 percent of effective capacity pledged to halt below-cost PV sales, sending GCL Tech and Xinte Energy shares up as much as 8.5 percent.
Quay lại
Eight polysilicon giants pledge cost-floor pricing as shares jump 8.5%
Eight Chinese polysilicon producers controlling over 90 percent of effective capacity pledged to halt below-cost PV sales, sending GCL Tech up 4.5 percent and Xinte Energy up 8.5 percent.
"The plan's effectiveness will hinge largely on the timing and scale of capital injections," OPIS analyst Summer Zhang said, with key governance and funding details still undefined.
The eight companies — Tongwei, GCL Tech, Daqo Energy, Xinte Energy, Asia Silicon Qinghai, Xinjiang East Hope, Qinghai Lihao Qingneng, and Xinjiang Goens Energy Technology — signed the anti-involution initiative in Shanghai on Aug. 6, pledging that all PV product prices, including tender quotations, must not fall below costs calculated under the industry's standard cost accounting model. They committed to accept supervision by market regulators, strengthen mutual monitoring, and phase out outdated high-energy-consuming capacity.
The pledge is the most coordinated supply-side intervention yet in a sector that has seen prices collapse from roughly $39 per kilogram in 2022 to below $4.50 per kilogram by end-2024, wiping out margins for producers worldwide. It also lands as the Trump administration prepares a Section 232 price floor on polysilicon imports — a move that would protect US producers Hemlock Semiconductor and Wacker Chemie while raising costs for US solar developers.
China's Consolidation Push Meets US Price Floor
The Chinese pledge comes as Beijing's own polysilicon industry enters its deepest recorded downturn. Operating rates have dropped below 40 percent, inventories have ballooned past 300,000 metric tons, and the top producers — Tongwei, GCL Tech, Daqo New Energy, and Xinte Energy — have reported combined losses exceeding CNY 7 billion ($1 billion) since 2024.
In July 2025, six of China's largest producers floated a 50 billion yuan ($7.4 billion) capacity acquisition fund to permanently shut down roughly one-third of the country's existing polysilicon capacity — an estimated 1 million metric tons of lower-quality production lines. The anti-involution pledge extends that logic to pricing, effectively establishing a floor under the industry's cost curve.
The timing is consequential. Washington's Section 232 investigation into polysilicon imports, launched in July 2025, is expected to culminate in a presidential proclamation setting a Minimum Import Price on the material. China produces 93.5 percent of the world's polysilicon, with nine of the top ten producers based there. A US price floor would shield Hemlock and Wacker from Chinese dumping in the domestic market — but a simultaneous Chinese supply-side reform could push global prices higher regardless of US policy.
What the Pledge Means for Solar Costs
For downstream buyers, the implications are immediate. Roth Capital Partners modeled that Section 232 tariffs alone would add roughly $0.10 per watt to imported solar cells, translating to a $4.00 to $5.50 increase per megawatt-hour in power purchase agreement prices. A coordinated Chinese price floor on top of US tariffs could push module costs from the current sub-$0.30 per watt toward $0.49 per watt in a worst-case scenario.
The non-Chinese supply chain cannot fill the gap. Outside China, only approximately 92,000 metric tons of operational polysilicon capacity exists, versus US solar demand of at least 125,000 metric tons per year. That structural shortfall means US solar developers will remain dependent on Chinese material regardless of tariff structure.
For the semiconductor side, the calculus differs. Semiconductor-grade polysilicon commands a three-to-four-times premium over solar-grade material, and CHIPS Act-funded fabs at TSMC Arizona and Intel Ohio have created new domestic demand for the higher-purity product. Hemlock's $325 million CHIPS Act grant and the IRA's $3-per-kilogram Section 45X production credit have narrowed the cost gap with imports to less than 10 percent, according to Intertek CEA analysts.
GCL Tech closed at HKD 0.70, up 4.5 percent, with turnover of HKD 112 million. Xinte Energy rose 8.5 percent to HKD 4.33. Xinyi Solar gained 3.2 percent and Flat Glass rose 2.9 percent as the broader PV complex rallied on the pledge.
This article is for informational purposes only and does not constitute investment advice.
