- The Chinese market regulator orders solar industry players to halt coordinated production and pricing actions.
- The planned $7 billion capacity reduction scheme flagged as anti-competitive.
- The decision raises questions over Beijing efforts to stabilise the solar manufacturing sector.
China’s solar manufacturing sector is facing renewed regulatory pressure after the State Administration for Market Regulation (SAMR) intervened in efforts by leading polysilicon producers to coordinate supply cuts and stabilise prices.
A leaked memo confirmed by multiple industry sources revealed that SAMR convened a closed-door meeting in Beijing on January 6 with the China Photovoltaic Industry Association and the country’s six largest polysilicon manufacturers. The discussions focused on recent industry initiatives aimed at consolidating the market and addressing severe overcapacity.
The companies involved Tongwei, GCL, Daqo, Xinte, East Hope and Asia Silicon together account for nearly 2.5 million metric tons of polysilicon capacity. Under the proposed plan they intended to raise around CNY 50 billion to acquire and idle roughly one third of China’s total polysilicon production. Smaller producers account for an additional 700,000 metric tons.
In recent months the sector has also intensified coordinated production cuts under the banner of industry self discipline. These actions helped push polysilicon prices to about CNY 60,000 per ton in early January the highest level in 20 months offering some relief to manufacturers squeezed by falling solar module prices.
However SAMR said it has received a growing number of complaints alleging that producers were using self-discipline mechanisms to disguise price coordination. The regulator considers the recent actions anti-competitive and has ordered companies to immediately cease any coordination on capacity utilisation production volumes sales volumes or pricing.
The watchdog also prohibited the use of financial contributions to the consolidation vehicle as a basis for allocating future market share production quotas sales quotas or profit distribution. In addition, companies were told to stop exchanging sensitive commercial information such as pricing intentions and production costs.
SAMR has instructed CPIA and participating firms to review all past actions submit documentation including agreements and meeting records and provide written rectification plans by January 20. Officials warned that failure to comply would result in formal antitrust investigations and enforcement action.
Industry sources said CPIA has already suspended its monthly coordination meetings and halted previously agreed production and price restraint measures.
The market reacted swiftly. Polysilicon futures on the Guangzhou Futures Exchange fell 9 percent on January 8 hitting the daily limit before sliding a further 8.11 percent the following day to CNY 51,300 per metric ton close to levels last seen in October.
While coordinated action had begun to lift prices many analysts argue higher polysilicon prices are necessary to restore balance across the solar value chain. SAMR intervention is therefore seen by some as a setback to the industry’s best chance of meaningful rebalancing and has raised fresh doubts about the effectiveness of China’s broader campaign to curb destructive competition across strategic manufacturing sectors.
China has also announced a major shift in its export tax policy for photovoltaic and battery products, a move that is expected to reshape global solar supply dynamics and pricing structures.
In a joint statement issued by the Ministry of Finance and the State Taxation Administration, authorities confirmed that export tax rebates linked to value added tax for photovoltaic products will be cancelled from April 1, 2026. Export rebates for battery products will be reduced from 9 percent to 6 percent from April 1, 2026, before being fully eliminated from January 1, 2027. Read more
Author: Bryan Groenendaal
