Solar companies face squeeze
China Sunergy has issued a profits warning saying it expects to make a slight loss for the fourth quarter, caused mainly by a continuing drop in sale prices, currency exchange and derivative losses.
The announcement comes amid slowing growth throughout the Chinese solar manufacturing industry.
Suntech Power (NYSE:STP) also fell 5.7 percent and JA Solar (NasdaqGS:JASO) dropped 6.3 percent.
Suntech Power’s reported losses had been worse than expected, while LDK Solar (NYSE:LDK) warned losses were on their way. Trina Solar (NYSE:TSL) also said its fourth quarter profits would fall.
Chinese manufacturers are heavily export-focused and global demand for 2009 is perhaps only half of available manufacturing capacity. Companies using higher grade and more expensive polysilicon are expected to cut prices substantially in 2009.
Manufacturing capacity nearly doubled in 2008 while demand shrank, with the Spanish government amoung those which rolled back its subsidies most seriously. A number of players that have traded simply on capacity are expected to collapse.
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