GreenergyDaily

Jul. 24, 2025

Commodity prices from steel to polysilicon have surged this month as Chinese investors bet Beijing is finally serious about addressing overcapacity across the world's second-largest economy.

Prices for nine industrial commodities including coal, steel, polysilicon, a building block for solar panels, alumina and lithium carbonate have climbed by 10% to 68% this month while share prices in steelmakers, solar panel manufacturers and clean energy companies have outpaced the benchmark CSI 300 Index.

The moves coincide with Beijing's call on July 1 to tackle "disorderly price competition," or overcapacity, and an acknowledgement it intends to deal with a persistent problem fuelling deflation at home and trade barriers abroad.

Since then, state media has amplified that message with warnings against involution, a now-popular reference to competition so fierce it becomes self-destructive.

"I think that addressed a big concern for investors, which is the profit margin squeeze on some of the very promising sectors," said Tai Hui, Asia Pacific chief market strategist at JPMorgan Asset Management.