China’s despondent solar manufacturers face a new threat — an imminent drop-off in demand for their products that’s likely to heap pressure on an already oversupplied market.
Investors will have an opportunity to gauge the industry’s underlying mood amid the glitz of the world’s biggest solar fair in Shanghai this week. The conference and exhibition kicked off on Tuesday and typically attracts hundreds of thousands of visitors.
The solar industry’s record growth in China masks some brutal economics confronting equipment-makers. Margins have collapsed as fierce competition forces them to sell at a loss. Mounting protectionism is choking off exports. Those circumstances will become even more difficult to navigate once a policy-driven rush to install panels in China peters out in the second half of the year.
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