(Yicai Global) Oct. 11 -- Chinese regulators have cautioned leading silicon producers against price manipulation through the hoarding of supplies for the second time in two months, as the price of the raw material used to make solar panels continues to skyrocket.

As the prices of some products in the photovoltaic industry keep soaring, the Ministry of Industry and Information Technology, State Administration or Market Regulation, and National Energy Administration recently called silicon suppliers in the PV supply chain for discussions. This follows a previous meeting in August.

Some companies are artificially forcing up prices by holding onto stock, the Ministry of Industry and Information Technology said on its website yesterday.

A complicated global trade environment, continued Covid-19 outbreaks, soaring downstream demand and different production cycles are also contributing to big swings in prices, it added.

“As far as I know, no deterrent measures have been implemented yet, such as penalties to the companies involved, so silicon prices are unlikely to come down in the short term,” the head of marketing at a PV firm told Yicai Global.

In the first half, top silicon suppliers Tongwei and Daqo New Energy reported three-fold gains in net profit from a year earlier. But downstream, Topray Solar said net profit was likely to fall by as much as 65 percent.

“Our company is not affected by the soaring prices of raw materials and is producing solar batteries and modules as usual,” said the general manager of the marketing department of a company in the middle of the PV industrial chain. We will not hoard any goods, he added.

An electricity shortage in southwestern Sichuan province, where many silicon producers are based, together with the temporary shutdown of some factories for maintenance has contributed to the rise in prices, said Chinese metals information provider Shanghai Metals Market Information & Technology.

But the situation should improve as output is on the increase again now that the power shortfall has ended. Xinte Energy, Sichuan Xiexin Silicon Technology and East Hope all added 9,000 tons to their polycrystalline output last month, it said.

China produced 76,200 tons of polycrystalline silicon in September, a jump of nearly 23 percent from August, according to Shanghai Metals Market Information & Technology data. And silicon output is likely to reach as much as 85,000 tons this month and 100,000 tons a month by the end of the year.

Editor: Kim Taylor