Solar energy stocks extended their losses in Hong Kong trading.

As of the latest update, DRINDA (02865) shares were down 8.94% at HK$27.72, while LENS (06613) fell 6.87% to HK$25.48. XINTE ENERGY (01799) dropped 6.67% to HK$4.48, and XINYI SOLAR (00968) declined 4.35% to HK$2.42.

The negative sentiment is driven by several factors impacting the sector. Data from the National Energy Administration showed that newly installed solar power capacity in April was 9.52 million kilowatts, a significant year-on-year decrease of 78.95%.

Furthermore, production schedules for June indicate substantial pressure, with output plans for silicon wafers, cells, and modules down 8%, 12.3%, and 18% respectively compared to the same period last year.

In a recent development, the photovoltaic industry association held a meeting with companies to review production and sales for the first quarter. Analysis suggests the meeting was a routine communication, with no new, unexpected supportive policies or industry benefits announced.

Adding to the sector's challenges, there is growing concern over potential trade restrictions from the European Union. On May 27, a coalition of 22 European industry associations, led by the European Solar Manufacturing Council, issued a joint statement. They are urging the European Commission to act more swiftly and decisively in deploying trade defense instruments to counter unfair trade practices and the global industrial overcapacity they argue is fueled by foreign government policies.

This call for action spans several of Europe's core industrial sectors, including solar photovoltaics, steel, cement, chemicals, glass, and aluminum.