Exelon Sour on Renewable Energy, Monthly Metals Price Index Down

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MetalMiner Renewable Energy Metals Price Index January 2013 graph

The monthly Renewables MMI® registered a value of 65 in January, a decrease of 7.1 percent from 70 in December.

*Download previous monthly MMI® reports here.

The renewables energy industry actually got a boost from the US government’s fiscal cliff wrangling, coming away with an extension of wind-power tax credits worth $12 billion. You’d think that would be a good thing, right?

Think again.

The extension of wind-power tax credits won’t affect the wheels already in motion for a declining power sector. As our monthly renewable energy metals price index reflects, the end of 2012 has been full of tough news for the power generation industry in general.

For example, although Congress extended the $12 billion in credits, certain energy companies such as Exelon Corp. lobbied against the credits, “saying the subsidy distorted electricity prices and made the company less likely to add new generating capacity,” according to a Wall Street Journal article earlier this week. If the likes of Exelon will be adding less power generating capacity, that could mean demand for the very metals in our Renewables MMI® will decline, and may keep prices depressed.

Looking forward, reports claim that wind-farm developers, trying to beat the tax-credit expiration date, rushed to complete projects in 2012 and laid down a significant portion of the pipeline for future projects — this may not bode well for 2013 demand and activity. Another broader issue, just reported today by the WSJ, centers on US electricity use dropping in general.

According to the Energy Information Administration, electricity use will rise on average only 0.7% for homes and 0.6% for industrial users through 2040. This outlook is also causing Exelon Corp. and others to cut power spending and investment — Exelon is reported to be cutting $1.3 billion in renewable energy projects from now through 2015.

GOES Price Drives Index Decline

today's metal prices - MetalMiner IndX
As far as this month’s renewables price index goes, grain-oriented electrical steel (GOES) coil prices were the primary driver of the decline, dropping 17 percent. Secondarily, the value of US steel plate weakened by 0.1 percent this month.

Chinese cobalt cathodes fell 5.6 percent over the past month. Japanese steel plate decreased slightly.

Meanwhile, the price of Chinese steel plate jumped 5.1 percent, and the price of silicon increased 1.8 percent.

Korean steel plate prices increased 1.9 percent, staying above $1,000 per metric ton.

The Renewables MMI® collects and weights 8 metal price points used extensively within the renewable energy industry to provide a unique view into renewable energy metal price trends over a 30-day period. For more information on the Renewables MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

*Download previous monthly MMI® reports here!

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