A Troubling Trend: Longi's Solar Struggles Persist
The solar industry giant, Longi, has issued a stark warning, predicting yet another year of losses. This comes as a prolonged slump continues to grip the solar supply chain, raising concerns about the future of this crucial sector.
In a preliminary report released on the Shanghai Stock Exchange, Longi anticipates a full-year net loss of approximately six to 6.5 billion yuan for the period ending December 2025. This follows a challenging 2024, where the company faced an 8.6 billion yuan deficit.
The primary culprit, according to Longi, is the persistent low product prices and mounting cost pressures. The "sharp increase" in silver and polysilicon prices during the fourth quarter has significantly impacted their operations.
China's solar power industry has been battling overcapacity and intense competition, further exacerbated by the soaring cost of silver, an essential component in solar cell production. While sentiment towards the sector has improved slightly due to government interventions, the positive impact is most noticeable in the polysilicon market, a critical upstream material for solar panels.
Despite these challenges, analysts Chia Chen and Henik Fung from Bloomberg Intelligence remain optimistic about Longi's prospects. They predict an earnings recovery for the company this year as the solar industry enters an upcycle. The government's campaign to address overcapacity and competition is easing price pressures, and consolidation efforts are improving the market balance. "These factors support a healthier market and higher solar-panel prices starting 2026," they noted.
Longi's plan to transition to more affordable base metals from silver in the second quarter is also expected to boost margins in the long term. This strategic move could be a game-changer for the company's financial health.
However, here's where it gets controversial: Longi's Chairman, Zhong Baoshen, expressed confidence in September that the company would break even in its core business during the fourth quarter. This prediction didn't materialize, raising questions about the company's ability to navigate these challenging market conditions.
And this is the part most people miss: Leading polysilicon producer, Tongwei Coal, also announced a likely net loss of nine to 10 billion yuan in 2025, a significant increase from the 7.04 billion yuan loss in the previous year. Tongwei's polysilicon segment did achieve operating profit in the second half due to rising prices, but the increasing costs of key materials, including silver, continue to pose significant challenges.
So, what does this mean for the future of solar energy in China? With two major players facing substantial losses, is there a way out of this slump? These questions are sure to spark differing opinions and lively discussions. What are your thoughts on the matter? Feel free to share your insights and predictions in the comments below!
