(Yicai Global) Aug. 23 -- The stocks of four major Chinese photovoltaic module makers have lost around 10 percent of their value since Friday after silicon giant Tongwei waded into the solar panel sector, starting a pricing war and raising fears that it will knock out smaller businesses.

The mood was more optimistic today and most of the PV module makers gained but still failed to make up the losses over the last three trading days. Longi Green Energy Technology [SHA:601012] closed up 1.4 percent at CNY54.20 (USD8). The stock has lost 11 percent of its value since Friday.

Jinko Solar [SHA:688223] dipped 0.06 percent to close at CNY17.02 (USD2.50), down 10 percent from Friday. JA Solar Technology [SHE:002459] gained 3.6 percent to finish the day at CNY69.48, but this is still 9.6 percent lower than Friday. While Trina Solar [SHA:688599] climbed 2.1 percent to end the day at CNY72.90. It has had 14 percent of its value wiped off since Friday.

Chengdu, southwestern Sichuan province-based Tongwei [SHA:600438], on the other hand, closed down 3.4 percent at CNY59.05 (USD8.62). The stock has gained 3.2 percent since Friday.

Tongwei submitted the winning bid for 3 gigawatts of solar panels from electricity producer China Resources Power at a price of CNY1.942 (USD0.283) per watt, undercutting Xi'an, central Shaanxi province-based Longi’s tender by CNY0.05.

“Tongwei’s offer price was lower than market expectations and as such very attractive to power stations,” an industry insider told Yicai Global.

“Those without their own raw materials resources will be the first to die off,” an executive with a PV enterprise told Yicai Global. “There is likely to be a big reshuffle in the solar industry.”

The price of silicon is rocketing as supply fails to meet surging demand for solar power installations. The average price of monocrystalline silicon was CNY303,200 (USD44,701) per ton on Aug. 17, up from CNY134,000 per ton in June last year, according to data from the China Nonferrous Metals Industry Association.

As a result, the price of solar panels has also begun to rise. The price of first-tier monocrystalline modules are now between CNY2.10 (USD0.31) and CNY2.20 per watt, crossing the investment yield bottom line for many power station investors.

Unsurprisingly, Tongwei, which commands almost a third of the Chinese silicon market, has been raking it in and is now extending its reach downstream. But it might be difficult to change the market landscape so quickly.

In another setback, the country’s silicon output is expected to be affected by power rationing in Sichuan province where many silicon producers are located. Drought has drastically reduced the water levels in dams, halving hydroelectricity production. The interruption is likely to drag down polysilicon output by as much as 6,000 tons, which will push prices up again this month and next, industry insiders said.

Editor: Kim Taylor