China solar association urges companies not to hoard raw materials

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BEIJING, June 10 (Reuters) - Chinese solar power companies should refrain from hoarding raw materials such as polysilicon to prevent a further jump in prices that have already forced some companies to slash production, an industry association said on Thursday.

Global solar power developers are slowing down project installations because of a surge in costs for components, labour and freight as the world economy rebounds from the coronavirus pandemic. read more

In a statement, the China Photovoltaic Industry Association (CPIA) noted that the country's goal to peak carbon emissions by 2030 and become carbon neutral by 2060 was "ushering in new development opportunities" for the sector.

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But an "imbalance" in the supply chain has led to a sharp rise in prices, with polysilicon now costing more than 3.5 times more than at the end of last year, it added.

"At present, some photovoltaic companies have drastically reduced operating rates, cut production or even suspended production," it said, adding that some orders were not being fulfilled.

The CPIA urged companies to resist "excessive stockpiling" of polysilicon and silicon wafer products, in a series of recommendations for healthy and sustainable development of the industry.

It also suggested provincial governments extend subsidies for solar projects that are not able to connect to the grid by the end of this year until 2022, and advised firms installing solar plants not to rush to complete work, so as to allow prices to return to a "reasonable level" as soon as possible.

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Reporting by Muyu Xu and Tom Daly; editing by Emelia Sithole-Matarise

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