Renewables Fall to a New Low as Rare Earths, Silicon Support Fades

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The renewables market lost ground again this month, going from being an unspectacular but steady market to just an unspectacular one. It’s even now from the range it had been hovering in since last November.

Renewables_Chart_June-2015_FNL

The monthly Renewables MMI® registered a value of 58 in June, a decrease of 3.3% from 60 in May.

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What’s concerning is that while we certainly didn’t expect renewables to break out and hit new highs this year, they’ve actually lost significant ground compared to late 2014 when the range hovered between 60 and 70. The June reading of 58 is a new all-time low.  We can only chalk this drop up to more price-diluting incentives for end-use products using silicon in the solar market and the overall weakness in the rare earths market for neodymium.

Why Not Just Give Solar Panels Away?

In California this month, a state cap-and-trade program is now giving away crystalline silicon photovoltaic panels to low-income homeowners. While this will certainly help adoption, it won’t do any favors to companies such as SolarWorld, Inc. which are trying to bring prices of the panels, and silicon itself, up to achieve higher profit margins. California is the largest market for solar in the US and shifting the cost of the panels from consumers to a government program won’t bring up prices of the low-cost panels.

Solarworld has actually gone to great lengths, including petitioning for and receiving tariffs on Chinese silicon, to try to bring prices up.

Silicon will also inevitably feel the pinch from a wave of mergers in the semiconductor industry that will force the involved companies to adopt better procurement and lean operations principles.

As Renewables Go, So Goes GOES

The more interesting renewable market is that of grain-oriented electrical steel. While the US GOES price actually went up this month, the GOES M3 price, a better indicator of actual purchasing activity, went down. More on that tomorrow.

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At $420.92 per metric ton, Korean steel plate was down 7.8% for the month. Following a 6.0% decline in price, Chinese steel plate finished the month at $400.34 per metric ton. A 4.6% decline for neodymium left the price at CNY 370,000 ($59,488) per metric ton. US steel plate fell 2.9% to $575.00 per short ton. After rising the previous month, silicon prices dropped 1.3% to $2,540 per metric ton.

US grain-oriented electrical steel (GOES) rose 2.1% to $2,571 per metric ton after falling the previous month. At $36,336 per metric ton, the price of Chinese cobalt cathodes increased 1.8%.

Prices for Japanese steel plate remained constant this past month, holding at around $644.10 per metric ton.

FREE Download: Compare With the May MMI® Report.

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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