Recently, the photovoltaic industry chain has experienced a collective outbreak, with the main contract of polycrystalline silicon futures closing at the daily limit up in the afternoon. The main contract of industrial silicon futures has expanded its increase to 5%, and the photovoltaic equipment index has risen by 5.68% in a single day. Multiple stocks such as Daquan Energy and Tongwei Shares have also reached the daily limit up. At the same time, the organic silicon sector also rose, with stock prices of companies such as Hesheng, Dongyue, and Silicon Treasure soaring. This phenomenon is driven by multiple factors.
From a policy perspective, the symposium held by the Ministry of Industry and Information Technology on July 3 clarified the need to "regulate low price and disorderly competition in accordance with the law, and promote the orderly exit of backward production capacity." The sixth meeting of the Central Committee for Finance and Economics elevated the "rectification of internal competition" to a national strategic level. The national department requires photovoltaic enterprises to report cost prices and severely punish sales below cost prices. The policy implementation is unprecedented, marking the beginning of the supply side reform 2.0 in the photovoltaic industry.
At the industry level, top polycrystalline silicon enterprises collectively reduce production and uniformly raise prices through self-discipline and negotiation, and implement joint price limits. The China Photovoltaic Industry Association guided enterprises to sign production control agreements, resulting in a decrease in the operating rate of silicon materials and wafers, alleviating the supply-demand imbalance. The news of reduced production of photovoltaic glass has also attracted financial attention.
On the demand side, overseas markets are expected to rebound in the short term. The transition period for the cancellation of the new energy tax credit under the "Big and Beautiful Act" in the United States is approaching, triggering a wave of local power plant installation rush and stimulating Chinese companies to export to the United States in the short term. European component prices have rebounded for the first time after months of decline, and the installed capacity growth rate in emerging markets such as the Middle East and Latin America has increased, easing export pressure.
However, there is still uncertainty in the future market of the photovoltaic sector. The expectation of short-term supply side reform is highly sought after by the market, but the clearance of production capacity has not ended, and the contradiction between high inventory and weak demand has not been fundamentally resolved. In the medium to long term, industry competition will shift from a "price war" to "technological differentiation", and enterprises with high-efficiency technology layout will have more advantages.
Regarding the rise of the organic silicon sector, staff from the Securities Department of Silicon Treasure Technology stated that the company mainly produces organic silicon, with downstream products in the construction and industrial sectors. Polycrystalline silicon belongs to inorganic silicon and the company's business is not involved. At present, there is little change in the fundamentals of organosilicon, and the overall price is at the bottom. Any fluctuations in stock prices may be related to market sentiment.