BEIJING, July 10 (Reuters) - Some China solar stocks

jumped sharply on Thursday, continuing a multi-day rise on news

that Beijing wants to dampen aggressive price cutting that has

driven down prices of some components by nearly 30% in the year

to May, according to one estimate.

Overcapacity among Chinese manufacturers and price cuts made

to clear stock have sparked price wars worrying analysts that

more cuts could entrench deflation and hinder efforts to

stabilise the $19-trillion economy.

Shares of top manufacturer JA Solar rose nearly

10%, having gained 20% since July 1, when the top leaders of the

world's second biggest economy vowed measures to halt the price

wars in the solar and other industries.

That step was followed by an industry ministry pledge on

July 3 to curb price wars and phase out outdated capacity in the

solar industry.

Prices in the solar industry have fallen nearly 30% between

May 2024 and May 2025, the Oil Price Information Service (OPIS)

assessment for high-efficiency tunnel oxide passivated contact

(TOPCon) modules shows.

Stock prices of peers Longi Green Energy,

JinkoSolar ( JKS ) and Trina Solar have risen more

than 10% this month. The companies did not respond to Reuters'

requests for comment.

Last week Longi told state media it would commercialise

high-efficiency products sooner to overcome the low-price

dilemma.

Polysilicon has seen an even sharper rise since the

beginning of July, with stocks of Xinjiang Daqo New Energy

and Tongwei both up 29%.

Shares of Shanghai-listed Daqo closed at 26.48 yuan ($3.69)

on Thursday, their highest in nearly seven months. Daqo did not

respond to an emailed request for comment and Tongwei declined

to comment.

"Whether solar share price rises this time will be

sustainable depends on if effective policy is released," Pierre

Lau, managing director of Citi, said in a note on Thursday.

He added that previous initiatives to scale back excess

capacity in the sector had driven up prices as much as 40% in

two weeks in October 2024, to levels that ultimately proved

unsustainable.

Prices were also supported by unconfirmed rumours that the

powerful state planner, the National Development and Reform

Commission (NDRC), held meetings with polysilicon producers

asking them to keep prices above cost level.

NDRC did not respond to a faxed request for comment.

The market price in China is less than $4.50 a kg, below

most manufacturers' cash costs, says consultancy Berneuter

Research.

In addition, Tongwei and polysilicon producing peer GCL

were preparing a plan to set up a new company to buy

up excess factory capacity, media outlet Caixin said, citing

people familiar with the matter.

Prices of polysilicon have risen between 18% and 21% over

the last two weeks, but downstream solar manufacturers are still

resisting the hikes, Citi's Lau said.