Low US Steel Plate, Crude Oil Prices Reflect Solar, Wind Sectors’ Malaise This Month

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While the US steel plate price on the MetalMiner IndX dropped and crude oil prices continue their historic dwindle, the monthly Renewables MMI® fell to 61 in March as more national solar and wind projects ran into major problems. That’s a 1.6% drop from February’s reading – and a new 12-month low.

Renewables_Chart_March-2015_FNL

The two most widely used and applied renewable energy technologies in the US, wind turbines and photovoltaic solar panels, saw no changes in the prices of their input materials, nor in their supply-and-demand equations this month. Silicon for solar and cobalt, molybdenum and copper for wind have been hovering in their relatively stagnant market niches for the entire year just as they did for all of last year.

Lower Oil Prices = Lower Energy Costs

The decline in oil prices certainly has not helped renewables, sure, but the markets for solar power generation are not developing as green energy advocates predicted and wind is even further away from mass adoption. Giving homeowners the ability to generate their own solar power has not been the boon to utilities and energy buyers as some thought it would be.

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California’s solar commitment was expected to give homeowners an incentive to create energy from their rooftops and feed it back to the grid. That’s not happening, according to a new study of 110,000 California houses with rooftop solar systems. It confirmed that a vast majority of the panels were pointed south because most of the panel owners were paid by the number of kilowatt-hours the panels produced. Pointing them south maximizes production overall, but peak production, the kind that utilities covet, comes at midday, not in late afternoon, when it would be more helpful to providers.

Immature Solar and Wind Markets

It’s difficult to quantify how this orientation fight impacts adoption of solar even in California, let alone the rest of the country, but it is typical of the type of growing pain that a proven technology such as solar should be past by now. This isn’t the first hiccup the industry has dealt with poorly.

It’s not just the US, either. Japan’s solar energy expansion is in serious doubt. Utilities say their infrastructure cannot handle the swelling army of solar entrepreneurs intent on selling their power. The utilities’ willingness to invest more money in the grid depends heavily on whether the government remains committed to clean energy.

Junji Akagi, a real estate developer on Ukushima, a tiny island near Nagasaki, told the New York Times that he is upset about the lack of utility investment.  Akagi said he hoped to turn a quarter of the island’s 10-square-mile area into a “mega-solar” generating station, and has already lined up investors and secured the necessary land, but without a grid for the power to feed into, his investment would be all for naught.

Exact Metal Price Movements: Renewables MMI®

Low-priced oil does not just mean cheaper gasoline and heating oil. It also means cheaper US steel plate and grain-oriented electrical steel as both steel products require cheaper energy to produce. Those prices are reflected here but the economies of scale do not seem to be creating higher demand from consumers as they should be.

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  • A 6.2% drop over the past month left the US steel plate price at $693.00 per short ton. US grain-oriented electrical steel (GOES) declined 4.2% over the month to $2,558 per metric ton. Korean steel plate prices dropped by 3.6% this month to $482.17 per metric ton.
  • The price of neodymium rose 2.6% over the past month to $63,115 per metric ton, the second straight month of gains. The price of Chinese steel plate rose 1.9% to $431.42 per metric ton after falling the previous month.
  • Hovering around $35,792 per metric ton for the month, Chinese cobalt cathodes remained unchanged. Silicon held pat last month at $2,397 per metric ton. Japanese steel plate traded sideways last month, staying around $667.57 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.

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