By Colleen Howe
SHANGHAI (Reuters) -Solar manufacturing company heads in China, grappling with losses and tariffs on exports to the U.S., called for an end to a price war and a solution to overcapacity in the sector, but industry participants predict a slow turnaround.
China’s solar manufacturers have reported losses this year as U.S. President Donald Trump’s trade war put further pressure on demand within the industry.
Losses in the photovoltaic manufacturing value chain reached $40 billion last year, while for the industry as a whole – including firms’ other business lines – totalled $60 billion, Trina Solar Chairman Gao Jifan said.
The Chinese government and industry were working to address the overcapacity and breakneck competition that have pushed most major producers into the red, Gao told the SNEC PV+ Photovoltaic Power Conference and Exhibition in Shanghai this week.
The National Development and Reform Commission (NDRC), China’s state planner, held an online meeting in February calling for a ban on new production, Gao said, but new capacity has nevertheless been built in recent months.
NDRC did not immediately respond to a faxed question on the matter.
Zhu Gongshan, chairman of polysilicon and module producer GCL, called for a “clear out” of the sector through mergers and a paring back of production capacity.
China was also moving away from reliance on a single market, Zhu said, referring to growth in new markets outside China in response to tariffs and other trade barriers.
Chinese manufacturers have been rapidly expanding in the Middle East, and a module-producing firm said demand is set to grow in eastern Europe and South Asia.
Solar manufacturing makes up less than two-thirds of Trina’s business now and will fall to 50% or less in the next two to three years, Gao said, with a greater focus on product solutions and energy storage.
Several experts told Reuters during this week’s industry event that there is no hope for recovery in solar component prices this year.
One procurement manager at a module producer in eastern China said two or three large factories would have to stop production for supply and demand to rebalance and support prices, unlikely in the near future.
“The overcapacity issue is so deep one cannot see to the bottom,” another module producer, using a Chinese proverb.
(Reporting by Colleen Howe and Kevin Xu; Editing by Rachna Uppal)
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