The latest signals from embattled solar panel makers indicate the sector’s worst-ever downturn could be starting to ease, even as China turns up the rhetoric in a growing war of words over dumping accusations by Western manufacturers. Both Canadian Solar (Nasdaq: CSIQ) and Renesola (NYSE: SOL) have released updated guidance ahead of their official third-quarter announcements and the word, while downbeat, appears to show some signs that the crisis has bottomed out. Both firms lowered their margin outlook by moderate amounts, and both also lowered their third-quarter shipment targets, but again only by small to moderate amounts. (Canadian Solar announcement; Renesola announcement) But perhaps more significantly, both firms took big write-downs for unsold inventory, with Renesola writing down $20 million and Canadian Solar writing off about twice that amount. As a result, Renesola said it will post a $8 million loss for the third quarter. These write-downs follow a similar write-down announced last week by Trina Solar (NYSE: TSL) (previous post), which gave similar lowered guidance as well. (previous post) In my view these write-downs look relatively significant, as one wouldn’t expect to see companies take such write-downs unless they were fairly confident the worst of the downturn was over, as most prefer to take this kind of charge all at once rather than repeatedly in smaller amounts over a longer period. Renesola itself sounded a slightly upbeat note, saying it expected more gloom in the fourth quarter and first quarter of 2012, but that things could improve after that. Meantime, China made a significant gesture in response to allegations that it unfairly subsidies its solar panel makers, with a major state-run firm announcing it was suspending plans to build $500 million worth of solar energy plants in the US due to uncertainty about potential new punitive tariffs against China solar panel makers. (English article) Indeed, such a plan would become uneconomical if the US imposes punitive tariffs, as the Chinese builder was planning to use Chinese-built solar cells for this series of plants which would suddenly become much more expensive under new tariffs. I still think the US is likely to levy these tariffs due to election-year politics, but clearly this kind of tactic by the Chinese may make some US policymakers think twice about such actions.
Bottom line: New guidance from 2 major solar players appear to show an easing of the industry’s crisis, as the war of words heats up in the US-China solar trade dispute.
Related postings 相关文章:
◙ Solar Fight Sees Accusations Flying 中美太阳能纠纷引发口水大战
◙ China Solars Brace for Icy 2012 With US Trade Complaint 中国太阳能产业需直面美欧关税壁垒
The last few days have seen an overwhelming flood of new chatter in the war of words between Chinese and Western solar cell makers, with China’s commerce ministry also voicing its views on this case that looks set to become a major battleground in the free trade debate. After US solar firms filed a formal anti-dumping complaint in the US last week against their Chinese rivals, China’s commerce ministry quickly and predictably fired back that the complaint was groundless, and warned that any punitive action could result in a damaging trade war that could hurt the global economy. (
After a month of tough-talk on Capitol Hill blasting China’s generous subsidies for its solar sector, the inevitable has happened and a group of leading US solar panel makers has filed to have punitive tariffs leveled against their Chinese rivals. The group, led by the US arm of Germany’s SolarWorld (Frankfurt: SWV) has officially petitioned the US International Trade Commission (ITC) to level the punitive tariffs after Chinese solar makers have prospered under years of support from Beijing, which has provided a wide range of incentives like cheap costs for land and low interest loans, to create an industry that now controls more than half the global market. (
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. (
As if things weren’t bad enough for Chinese solar firms, two new developments are casting clouds over this already struggling sector, one overseas and one at home. Overseas, foreign media are reporting that new solar cells with record efficiency developed by First Solar (Nasdaq: FSLR), one of the last US players still in business following a recent round of bankruptcies, could significantly undermine Chinese rivals. (
According to media reports, US solar panel maker Solyndra could default on a $528 million loan guaranteed by the US government following its recent bankruptcy filing, forcing the government to repay the loan. (
US solar cell makers are showing that their Chinese rivals aren’t the only ones who can count on government support to boost sales, with First Solar (Nasdaq: FSLR) announcing a big new deal with strong backing from Washington. Based in the sun-baked state of Arizona, First Solar said it will provide a hefty 100 megawatts worth of solar modules to India’s Reliance Power, with $85 million in financing for the project’s first phase coming from the policy-driven US Export-Import Bank. (
My headline for this item may be a little misleading, as I’m sitting here having my morning coffee in Shanghai writing it while speculating on what will happen at one of the world’s top solar energy shows that kicks off today in Germany. All the big Chinese names, including Suntech (NYSE: STP), Trina (NYSE: TSL), Yingli (NYSE: YGE) and many others, are attending the show this week in Hamburg, in a rare event that will bring together many of the sector’s top executives in a single place at a single time. (
It’s been less than a week since Beijing announced new incentives to help boost its struggling alternate energy sector (
Trina Solar (NYSE: TSL) has just announced updated guidance for its second quarter that looks downright ugly, making its rosy outlook for the rest of the year even stranger, possibly signalling a bottom for the struggling solar sector in its worst-ever downturn. Just days before reporting its results, Trina has told the market it expects its unit sales to come in around 10 percent below its previous guidance, while margins will miss previous guidance by an even sharper 20 percent. (
