Tag: steel plate price

Renewables MMI: Tax Bill to Put Half of U.S. Wind Power Projects In Jeopardy?

Renewables MMI: Tax Bill to Put Half of U.S. Wind Power Projects In Jeopardy?

The Renewables MMI dropped 2.5% for the month of December, ending at a value of 78.

Here’s What Happened

  • Since our recalibration of this index back in May 2017 to better take into account cobalt price fluctuations, the Renewables MMI has been slowly but surely gaining ground the latter half of 2017, hitting a high of 84 in September.
  • Within this basket of metals and materials used in the renewable energy industry, the Big Heavy is the U.S. steel plate price. Yet from November to December, that price point only dropped a single dollar per short ton.
  • The China steel plate price, however, did move much more – increasing 4.3% on the month.

What’s Going On in the Background?

  • The biggest news for the renewables industry has been the controversial tax plan put forth by legislators and still awaiting final House/Senate reconciliation – mainly, the fact that the Base Erosion Anti-Abuse Tax (BEAT) has been kept intact in the latest version of the Senate bill.
  • As Sydney Lazarus wrote in MetalMiner last week, currently, “many companies have large multinational corporations finance wind or solar energy projects, and in return, give the latter the renewable energy credit that the government provides.” But the BEAT tax, which is meant to discourage multinationals from moving profits abroad — and which the Senate bill kept intact — would make the crucial solar investment tax credit (ITC) and wind production tax credit (PTC) “unusable for multinational banks and other corporations who have low tax rates,” according to this article.
  • It’s unclear if this move was intentional or not, but regardless, it injects huge uncertainty into the renewable energy industry as the bill hurtles toward law. (Some, such as American Wind Energy Association’s Peter L. Kelley, say it “could put an end to more than half of the country’s wind projects,” as reported by Lazarus.

What Metal Buyers Should Look Out For

  • Keep an eye out on steel plate’s raw material inputs — iron ore prices increased over the past month, as we reported in our December Monthly Buying Outlook, while coal prices decreased. Although steel plate prices appear a bit sluggish at the moment, China’s demand is something worthy of paying attention.

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Renewables Index Falls To Another New Low After Chinese Demand Wanes

Renewable energy sector metals and materials inputs fell again this month as Chinese demand has fallen with the second-largest economy in the world’s stock market.

Renewables_Chart_September-2015_FNLThe monthly Renewables MMI® registered a value of 54 in September, a decrease of 5.3% from 57 in August, another all-time low.

Prices Keep Falling

Steel plate, cathodes and silicon could not increase much in value this month and even grain-oriented electrical steel (GOES), the standout performer of our renewables metals, looks to have fallen. (More on that later this week.)

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Without strong demand from Europe and China for end-use products such as silicon photovoltaic solar panels and wind turbines, it’s difficult to foresee a price turnaround for these metals in the near future. One would think that prices falling so low would eventually increase demand and spur on bargain purchasing, but demand has not picked up, particularly in China where all markets are falling.

European Market Maturity

The problem in Europe is that much of the renewable energy generation market is already mature and won’t expand much anytime soon.

Around 80% of the electricity demand in Germany on a sunny Sunday last month was covered by photovoltaic and wind power. According to the evaluation by the German forum “Together against interim storage, and for responsible energy politics,” the photovoltaic plants at noon produced more than 24 gigawatts of solar power. Much of Europe is now a replacement market and not a building market. This is not the case with the emerging markets that panel and turbine manufacturers depend on.

Despite massive solar energy generation projects in India and China, the emerging markets are still moving slowly toward the technology. India’s “Solar Parks” are not slated for completion until 2022 and delays beyond that look possible.

Chinese Power Generation

Fixed government payments to Chinese solar power generation companies are determined partially by electricity consumption within the country. So with Chinese demand waning on the consumer side, solar power investments by utilities are decelerating with the rest of China’s economy. These firms’ revenues will likely fall as well. This could push China’s ruling communist party to move funding from solar companies back to the dirty coal-fired plants that Beijing has only recently admitted need to be shut down.

Despite the lack of demand, renewables prices have not broken out of the range we’ve seen for most of this year and are only marginally lower than they were before that, so most buyers should be able to wait to make their purchases without any great threat of missing out on a bargain.

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Renewables MMI® Jumps on the All-Time Low Bandwagon

The monthly Renewables MMI® registered a value of 57 in August, a decrease of 1.7% from 58 in July. Like many other metals that we track, this is an all-time low.

Renewables August 2015

Unlike some of the other metals we track, though, fundamentals haven’t really changed that much for silicon, cobalt cathodes and most of the renewable metals we track. The fact that the index fell only 1.7% — a pittance when compared to the steep drops of other indexes — it shows this is a low created by ongoing tepid demand and the bearish environment affecting all commodities.

The Steady, Slow Fall of Renewables

The slow fall of renewables may have more to do with the continually falling commodity prices of oil, liquid natural gas and other competing energy products. Uncertainty over the possibility of Iranian oil hitting the global market is only making crude potentially more competitive with solar panels, wind turbines and other renewable energy investments, too.

Free Sample Report: Our New Monthly Metal Price Outlook

We have long lamented the subsidized nature of renewable energy investments in the developed world and how those subsidies disconnect infrastructure investment costs from actual payback in the form of lower energy prices, but that’s something that won’t change anytime soon or help renewable energy inputs in the short term. Sorry, Milton, but prices will be just one part of the renewable energy information puzzle for the foreseeable future. We wish it wasn’t so, but it’s the reality. There is, however, no reason why they shouldn’t be a bigger part of that equation.

Subsidies Distort Payback Picture

If renewable energy investments were judged by how much solar panels on your house or, say, wind farms for a utility company, would cost to install and how long it would take lower energy bill prices to pay back those installation costs, we would likely see more US adoption and fewer poor investments in low-wind or solar areas. As it is, though, government incentives artificially distort those costs and create high-adoption areas, such as California, where there are incentives and high adoption and no incentives and low adoption, thanks to low oil and LNG prices, in places without the natural advantages.

Free Download: Compare Prices With the July MMI Report

Prices for renewable inputs such as silicon are fairly stagnant in high-adoption countries such as Germany, too. The bearish commodity environment has hit low demand sectors as hard as the higher demand ones.

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.

Renewables MMI® Holds Steady as Solar Prices Start to Resemble Reality

Renewables MMI® Holds Steady as Solar Prices Start to Resemble Reality

After months of rancorous trade battles, a funny thing happened to the crystalline silicon solar photovoltaic panel market. Prices in market leader Europe suddenly went up. For the first time in a decade.

Free Download: July Metal Price Forecast

Prices for solar panels in the European spot market have risen by about 6% so far this year, according to pvXchange, a solar market consultancy based in Bremen, Germany.

Renewables_Chart_July-2015_FNLFlat is the New Up!

Our monthly Renewables MMI® doesn’t track panel prices per se, only the silicon raw material that goes into them, but still registered a value of 58 in July, on par with June’s value. Flat is the new up in this bearish commodity market.

Despite the modesty of the increase, it’s a huge turning point for European solar as the increase represents an abrupt reversal of historical trends. In 2011, the average price of a solar panel in Europe fell by nearly one-third compared to the previous year. In 2012, solar panel prices in Europe plunged by nearly another third. Just last year, the price of a solar panel in Europe fell by more than 14% compared to the previous year.

What’s even more astounding is that this increase could have been caused by the real price of silicon finally being quoted in a majority of European retailers. We have long lamented that government subsidies for both silicon exports in China and for local solar installation in destination markets have artificially eroded the price of silicon.

Tariffs to the Rescue?

A trade war was waged in the US largely between Germany’s Solarworld, Inc., and small Chinese manufacturers who received government support for silicon exports at home and possible kickbacks abroad from installers who specified their thin-film products over higher-quality silicon products from companies such as SolarWorld. The real price fight, though, was always in Europe where solar could make up 12% of power generation by 2030.

The European Commission renewed their own tariffs on Chinese silicon recently and it looks like those duties were finally enough to keep the cheap imports out of their markets. A robust European solar market is good news for silicon refiners and producers such as Solarworld as higher prices mean more profitability for them.

It’s too early to tell if this turnaround will ever be felt in the highly subsidized the US market, but it’s certainly a good sign.

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.

Renewables MMI®: Solar Silicon Price Jumps, Tariffs Finally Working?

Renewables MMI®: Solar Silicon Price Jumps, Tariffs Finally Working?

Silicon is essentially sand. But for use in semiconductors and solar panels it needs to be refined to a purity of 99.99999 %. This makes the second-most abundant resource in the world a commodity as its availability is limited by worldwide refining capacity.

Free Download: Latest Metal Price Trends in the June MMI Report

We have long lamented the trade war going on over refined silicon over the last few years. Big companies such as German-based multinational Solarworld, Inc., want higher prices, saying their panels are of higher quality than those offered by smaller, mostly Chinese, producers.

US Factory Capacity Increasing

Installers in US markets are reaping a windfall by using the cheaper panels for installations that are subsidized by states such as California and the low cost of the cheap imports. While it was kind of funny to see Solarworld wrap itself in the flag when it successfully petitioned the Commerce Dept. for tariffs on Chinese panels, and then Chinese silicon, itself, Solarworld has simultaneously stepped up its US presence and seems to be willing to fight for the US market.

Meanwhile, Elon Musk’s SolarCity, an entirely American-owned operation, is building a massive $5 billion
“gigafactory” in Buffalo, NY. When the silicon solar panel factory is completed and running full-tilt (projections within two years), it will be the biggest solar panel plant in North America. To run at full speed, the plant will need an elaborate network of suppliers and service firms to support it.

Is Domestic Demand There Yet?

Is there enough solar demand for companies like SolarCity and SolarWorld to get their prices increases AND see sales grow? A significant price spike in silicon in the renewables MMI this week is certainly a step in the right direction. The tariffs placed on Chinese panels and silicon seem to be having the desired effect, as well. The European Union renewed similar duties this week, essentially stifling Chinese exports to the West with high tariffs in both markets.

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

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. 58 is a new all-time low. We can only chalk this drop up to more incentives for end-use products using silicon in the solar market and the overall weakness in the rare earths market for neodymium.

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.

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.

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 much better indicator of actual purchasing activity, went down. More on that tomorrow.

Renewables MMI®: California Tries Giving Away Silicon Solar Panels

Thanks to fees from its state cap-and-trade law, Northern California homeowners will soon start receiving completely free crystalline silicon photovoltaic solar panels.

Why Manufacturers Need to Ditch Purchase Price Variance

Oakland nonprofit Grid Alternatives is using $14.7 million raised through the state’s cap-and-trade system to install the panels in lower income neighborhoods for free. The fees were paid by industries whose emissions exceeded the state “cap” set by the new law. The fees were donated by state to Grid and the money came out of the Greenhouse Gas Reduction Fund (GGRF), also established by the cap-and-trade law.

Silicon was the biggest mover this week on our renewables MMI, as well.

Renewables MMI®: A Short History of Solar Tipping Points

Like most of the US solar industry, I have been watching for the tipping point in silicon photovoltaic panel installation and energy costs since the early 2000s.

What the EPA’s Clean Power Plan Means For More Than Just Solar

It’s long been-promised by proponents of renewable energy, so I was a bit skeptical in December when it was again predicted to cause a disruption taking market share away from coal and other traditional energy providers in the US market and cause mass adoption of solar as a home heating/cooling and electricity technology.

I also don’t immediately buy into the ability of the EPA Clean Power Plan to convert those millions of consumers to home-based solar generation purely based on changes in law that mainly effect producers and not consumers of energy.

Classic ‘Solar Tipping Points’

Some great moments in the solar tipping point so far:

  • In 2012 ThinkProgress gave us three handy charts which showed why solar “has hit a tipping point.”
  • In 2011 the tipping point supposedly happened for 3rd party residential panel ownership in California, the largest adopter market state… and that did nothing for material costs or even made a speed bump in demand for the dirtier technologies.
  • Even back in 2005, silicon crystalline solar photovoltaic panel technology “hit a tipping point” to supposedly make solar a much more viable energy generation technology. 10 years ago. Yet the demand for materials has still not risen much ever since we began tracking prices in 2012.

The monthly renewables MMI® registered a value of 60 in May, a decrease of 1.6% from 61 in April. The decrease is on par with the generally flat “terse investor frown” trend the index has tracked since its inception so, while it’s not disconcerting, it doesn’t give great hope for prices of raw materials for silicon panels or wind turbines to rise in the short term, either.

No Increased Demand for Raw Materials

A lot of the metal inputs of these technologies are suffering their own price problems due to market gluts that have nothing to do with solar or wind adoption, particularly steel plate.

The most promising development for solar generation is that it’s now cheaper than gas in 47 states, but there’s no evidence that that will spur on solar adoption in a place like, say, Minnesota where it’s dark much of the day and snowmelt will ruin your roof-mounted panels every winter.

Silicon, itself, is rising in both demand and price as semiconductor and energy use is definitely on the upswing in mature markets. The adoption problem continues to be the scale of the industry. Powering California, Texas, the rest of the West and Florida will not deliver the amount of panels on roofs needed for consistent power generation for utilities and grid owners to divest in backup generation technology. It also won’t deliver the amount of homes and commercial businesses generating electricity necessary to push raw material prices up significantly.

Paypal, SpaceX, Cars, Why Not the Solar Tipping Point?

Enter Elon Musk, sensing a business opportunity, and this month’s announcement from Tesla Motors that it’s expanding its li-ion battery business to homes and commercial properties interested in using a modified version of the automaker’s batteries to store solar power generated during the day for their homes’ use at night. Hey guys, another tipping point!

It’s true that Tesla’s advance is economical, necessary and fills a major need in the market: the ability to store energy collected from the panels at night in places where daylight doesn’t extend beyond 8 PM. It could also resolve the orientation battle now being waged in California between utilities and homeowners by taking a decision on where stored power goes out of utilities’ hands.

Actual Renewable Materials Prices

Still, as we are cautious about the markets we cover, I will wait to see if Tesla’s battery business takes off and provides a boost for silicon solar demand. We’ve been promised a tipping point before. Now, how about that SpaceX IPO, Elon?

Renewables MMI®: Silicon Rises as Low Solar Energy Costs Increase Demand

Renewables MMI®: Silicon Rises as Low Solar Energy Costs Increase Demand

In January 2015, Saudi Arabian company ACWA Power surprised industry analysts when it won a bid to build a 200-megawatt solar power plant in Dubai that will be able to produce electricity for 6 cents per kilowatt-hour.

Why Manufacturers Need to Ditch Purchase Price Variance

That price was less than the cost of electricity from natural gas or coal-fired power plants, a first for a solar installation. Electricity from new natural gas and coal plants would cost an estimated 6.4 cents and 9.6 cents per kWh, respectively, according to the US Energy Information Agency.

Technological advances, including crystalline silicon-solar photovoltaic panels can now convert higher percentages of sunlight into energy and have made solar panels more efficient. As a result, we may be seeing a long-awaited rise in the price of silicon used for the panels, microchips and semiconductors. The week’s biggest mover on the weekly Renewables MMI® was the price of silicon, which saw a 7.4% increase.

Last week, manufacturer SolarCity began construction on a $900 million, 1 million-square foot PV panel factory in Buffalo, as well.

The price of silicon rose 7.4% on the renewables MMI last week.

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