While our Renewables MMI is the only major index that showed positive growth this month, essentially erasing last month’s loss and increasing 1.8% to 55 from a score of 54 in September, it’s still mired in the low price trend it’s been stuck in for the last 5 months.
That mini-trend, itself, was a drop from the renewable materials’ previous price range when it fluctuated in the 60s, itself a low-price trend. That string of monthly prices lasted all the way back to 2012.
As we have noted before, the renewables MMI is a bit of an outlier index. Its supply and demand picture hasn’t changed that much since we began tracking it, with demand for wind turbine metals, electrical transmission raw materials and solar silicon still operating as fairly niche markets.
A lot of the component metals of the index continue to suffer price problems due to market gluts that have nothing to do with end user adoption, particularly steel plate. We also can’t discount the fact that supplies may be a bit more constrained this month, at least for US grain-oriented electrical steel, due to the now 7-week-long worker lockout by Allegheny Technologies, Inc., 1 of only 2 US GOES producers. ATI claims that production is carrying on as usual, but work stoppages such as these rarely happen without some in production. Even a perceived lack of supply of GOES could cause buyers who need it to stockpile the metal.
On the demand side, another application of silicon solar photovoltaic panels is being attempted in California, using the solar power generated from them to heat, desalinate and clean used farm water for irrigation in the Golden State’s water-deprived central valley, the source of much of the produce enjoyed by the rest of the nation. It’s another of many promising applications that we don’t see affecting prices anytime soon. We’ve been there before.
We expect renewables to continue to trade in this range for the rest of the year and likely for much of the next until commodities, as a class of investments, experience a wider market recovery. If you are a buyer of silicon, GOES or other renewables we would caution against buying forward as prices have shown no sign that this is a bottom and another shoe could drop at anytime, even in this low range.
Silicon prices increased 0.3% to $2,028.79 per metric ton from $2,021.09 per mt in September. US grain-oriented electrical steel (GOES) jumped 9.3% to $2,820 per mt from $2,579 per mt in September. US steel plate fell 9.4% from $573 per short ton to $519 per st.
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.