Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Alternative energy -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (10411)	3/23/2011 7:52:58 AM
From: Sam	Respond to of 16955

Why shouldn't buyers lock in long term contracts? 2009 showed that even if the price of poly falls sharply, you will be able to renegotiate the contract with the supplier. Solar companies aggressive in locking up poly-Si supply contracts Nuying Huang, Taipei; Willie Teng, DIGITIMES [Wednesday 23 March 2011] Due to aggressive capacity expansion by solar wafer and cell makers, companies are more active in signing long-term polycrystalline silicon supply agreements, according to industry sources. The rules of supply contracts remain the same, the sources said, noting that buyers have to put down a 10% deposit for South Korea-based OCI, and about 15-20% for Europe and US suppliers. OCI, which has an aggressive expansion plan, has struck deals with Taiwan's Motech Industries, Neo Solar Power, Green Energy Technology (GET) and Danen Technology in March alone. Most of the agreements are seven-year contracts. Motech signed a US$281 million deal, GET US$507 million, Neo solar US$298 million and Danen US$161 million, translating to about US$124.7 million in deposits. China-based solar companies have also been active in securing material sources. OCI and China-based solar cell maker Suntec Power signed a US$429 million contract in March, and in February, inked another US$950 million deal with Yingli Green Energy, which represent another US$137.9 million in deposit. The main poly-Si suppliers globally include US-based Hemlock and MEMC, Germany's Wacker, Norway's REC, Japan's Tokuyama and Sumitomo and South Korea's OCI. Poly-Si supply in the spot market is still low, and the shortage could exacerbate due to production disruption at Japan's M.Setek and continuous hoarding and speculating in the market in anticipation of future price increases. First-quarter contract prices in the South Korea market are US$70/kg versus about US$80-90/kg in the spot market currently.