More Solar Woes With Plunging Prices
After staging a brief rally this week, solar module makers are returning to the defensive posture they have held for most of this year amid new reports that the slump in demand that has led to their worst-ever crisis seems to be accelerating rather than easing. Media are reporting the price of silicon, the main ingredient used to make solar cells, dropped a hefty 5.8 percent on October 10 from just a week earlier, in the latest indication that demand remains weak from an industry that built up massive new capacity during a brief boom under incentives rolled out by Western governments in 2009 during the global financial crisis. (English article) Demand for new solar power was already falling as the global crisis eased, and now it appears the problem is only getting worse as the US considers an anti-dumping complaint against Chinese manufacturers that produce over half the world’s solar panels (previous post), and as demand tumbles in Europe amid the unfolding Eurozone debt crisis. Shares in big names like Suntech (NYSE: STP), Trina Solar (NYSE: TSL) and Yingli Green Energy (NYSE: YGE) all plunged to near 52-week lows last week, but have staged a brief rally in the first 3 days of this week, possibly as bargain hunters swooped in to buy shares of companies whose forward price-to-earnings ratios are now in the super-low range of 4 to 5 times. The only problem is, most of those PE ratios are likely to soon become negative as analysts revise their estimates when companies start reporting losses as they sell their panels at below costs. While most Western producers have reported net losses in recent quarters, including a number that have gone bankrupt, only a handful of Chinese players have reported losses so far. But look for that too change if the current trends to continue, which looks likely, which will push solar cell makers’ stocks to new lows in the weeks and months ahead.
Bottom line: Tumbling material prices show that weakness in the solar cell market is accelerating rather than easing, which will push panel maker share prices to new lows in the weeks ahead.
Related postings 相关文章:
◙ US Congress Turns Up Heat in China Solar Debate
◙ Tech, Environmental Issues Cast New Clouds Over Solar Firms
◙ US Solar Probe: Get Ready for China Bashing 美国太阳能调查：炮轰中国大潮的前奏
