Red Star Capital Bureau reported on December 25 that yesterday evening, Tongwei shares (600438. SH), Daqo Energy (688303. SH) announced that in order to actively respond to the spirit of the Central Economic Work Conference and eliminate the vicious competition of "involution", the two polysilicon companies will reduce production in an orderly manner.

According to the official WeChat news of Tongwei Co., Ltd., the company gradually arranged four high-purity crystalline silicon production companies under Yongxiang Co., Ltd., Yunnan Tongwei High-Purity Crystalline Silicon Co., Ltd., Sichuan Yongxiang Polysilicon Co., Ltd., Sichuan Yongxiang New Energy Co., Ltd., and Sichuan Yongxiang Energy Technology Co., Ltd., to carry out technical transformation and maintenance work according to the company's overall production and operation plan, reduce production and control production in a phased and orderly manner, and the follow-up specific resumption arrangements will be planned according to the changes in power prices and market conditions in the project area.

According to the official WeChat account of Tongwei shares

Tongwei said: "This technical overhaul and production reduction will help the company reduce the operating loss of high-purity crystalline silicon business in the current market environment, and is expected to have a positive impact on the company's overall production, operation and profit." ”

According to the announcement information released by Daqo Energy's official WeChat, in order to strictly implement the spirit of the Central Economic Work Conference, standardize the behavior of enterprises themselves, prevent "involution" vicious competition, and promote the healthy and sustainable development of the photovoltaic industry, the company will gradually start the phased maintenance of high-purity polysilicon production lines in Xinjiang and Inner Mongolia production bases, and orderly reduce production and control production of some production lines.

Talking about the possible impact of production reduction and production control, Daqo Energy said that the production reduction and maintenance work will lead to a reduction in the effective production capacity of the company's high-purity polysilicon, and the production and sales of the company's main line products will be reduced accordingly. "From an overall point of view, the production reduction and maintenance work will help reduce operating costs and reduce the company's operating losses while improving the future stability and product quality of the production equipment, so it is expected that the production reduction and maintenance will not have a significant impact on the company's production and operation."

Daqo Energy also said that during the production reduction and maintenance, the company will carry out systematic and comprehensive investigation and maintenance of the production equipment involved, and carry out some technical transformation work in a timely manner, and the company will coordinate and organize relevant employees to carry out vocational counseling and technical training in an orderly manner, so as to continuously enhance the company's leading competitiveness in the industry.

Red Star Capital Bureau noted that on October 14, the China Photovoltaic Industry Association held a symposium in Shanghai to prevent "involution" vicious competition in the industry. At the symposium, the entrepreneurs and representatives fully communicated and exchanged views on "strengthening industry self-discipline, preventing 'involution' vicious competition, strengthening the market survival of the fittest mechanism, and smoothing the exit channels of backward and inefficient production capacity" and the healthy and sustainable development of the industry, and reached a consensus.

In mid-November, more than 20 wafer companies held an online self-discipline meeting to improve the current market environment. A person familiar with the matter told the Red Star Capital Bureau that at present, the photovoltaic industry is oversupplied. If it continues like this, product prices will be at a low level, and some companies will face problems such as capital flow.

According to the statistics of the China Photovoltaic Industry Association, affected by the contradiction between supply and demand and the mismatch of production capacity, the price of the photovoltaic industry chain will drop significantly in 2024, and the price of polysilicon will fall by more than 35%.

In the capital market, as of noon today, Tongwei shares fell 0.25% to 23.8 yuan per share; Daqo Energy rose 2.8% to 26.09 yuan per share.

Synthesized from CBN, Sino-Singapore Jingwei