China’s Longi Green Energy first-half net loss widens as solar downturn persists

China's Longi Green Energy Technology reported a wider first-half net loss on Sunday as the country's solar industry continues to struggle under weak demand, overcapacity, and pricing pressure, Bloomberg reported. The solar company recorded a net loss of 3.68 billion yuan ($547 million) for the six months ending June, up from a loss of 2.57 billion yuan in the same period last year.

This loss fell within the range Longi had previously announced of 3.4 billion yuan to 3.8 billion yuan. The worsening financial situation follows similar results from other leading Chinese solar manufacturers, underscoring an industry downturn that has persisted for over two years. The combination of shrinking domestic demand, persistent overcapacity, and aggressive price competition is putting significant pressure on margins throughout the sector.

Chinese producers are also confronting a more challenging overseas trade environment. In an effort to diversify and cope with mounting cost pressures, Longi has ventured into energy storage, capitalizing on the rising global demand for battery systems. However, volatile silver prices during the first half forced solar manufacturers to cut back on the use of the metal, and Longi, like other companies, is exploring alternatives.

Bloomberg Intelligence analyst Chia Chen had indicated prior to the release of the results that a return to profitability for Longi would hinge on the company shifting towards silver-free production and expanding its energy storage divisions. The outlook for Chinese solar manufacturers remains bleak as the industry navigates excess capacity and weak pricing.

Ultimately, any improvement in profitability is likely contingent upon tighter supply discipline, lower input costs, and robust demand across both domestic and overseas markets.