Solar Stocks Slide in Hong Kong; Market Focus Shifts to Supply-Side Cutbacks

Solar energy stocks experienced a collective downturn.

At the time of writing, shares of XINYI SOLAR (00968) fell 7.52% to HK$2.09.

Shares of FLAT GLASS (06865) declined 4.43% to HK$6.47.

TRIUMPH NEW EN (01108) shares dropped 2.13% to HK$2.76.

The market movement follows recent industry speculation regarding the imminent implementation of mandatory energy efficiency standards across the entire photovoltaic supply chain, which could potentially eliminate around 30% of outdated production capacity.

Analysis from GF Futures indicates that, according to SMM statistics, annual photovoltaic module production capacity has already exceeded 1000GW.

Module output for May was 36.36GW, with an operating rate of only about 35%, and most of this represents high-efficiency capacity.

Consequently, the phasing out of low-efficiency capacity is not expected to impact short-term supply and demand dynamics.

Orient Futures analysts note that most photovoltaic glass manufacturers are currently unwilling to sell off stock at low prices and are demonstrating a strong willingness to support prices.

The key variable for the market's future direction remains the actual implementation of supply-side production cuts.

If cold repair plans proceed as scheduled, prices have the potential to bottom out and rebound.

Should these expectations fail to materialize, prices are likely to face renewed pressure under the weight of high inventory levels.