Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20
Global "Debt Mountain": Beware of This "New Peak" - 13th Nov 20
Overclocking Zen 3 Ryzen 5600x, 5800x, 5900x and 5950x to 4.7ghz All Cores Cinebench R20 Scores - 13th Nov 20
Is Silver Leading Bitcoin or is Bitcoin Leading Silver? - 13th Nov 20
How Elliott Waves Simplify Your Technical Analysis - 13th Nov 20
How to buy Bitcoins using debit/credit card? - 13th Nov 20
Will COVID Vaccine Kill Gold and Silver? - 12th Nov 20
Access to Critical Market Reports - 12th Nov 20
Stock Market Dow Futures Reach 30,000 on News of COVID-19 Vaccine Trials Success - 12th Nov 20
8 Terms & Conditions You Must Know Before Asking For Life Insurance Policy Quotes - 12th Nov 20
Gold Stocks Post 2020 US Election Outlook - 11th Nov 20
Champions’ League Group Stage Draw: All You Need To Know - 11th Nov 20
Stock Market Secular Trend - 11th Nov 20
Stock Market Correction Curtailed by US Election - 11th Nov 20
What Causes a Financial Bubble? - 11th Nov 20
Ryzen 9 5900X RTX 3080 - Scan.co.uk vs Overclockers.co.uk UK Custom PC System Builder Review - 10th Nov 20
Killing Driveway Weeds FAST with a Pressure Washer - Saving Block Paving from LOTS of WEEDs - 10th Nov 20
Trump Fired, Biden Hired, What Next?  - 10th Nov 20
Looking for a Personal Loan? Here Is What You Have To Know  - 10th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Trump’s Solar Tariff Confusion Creates An Investing Opportunity

Companies / Solar Energy Sep 28, 2017 - 05:25 PM GMT

By: OilPrice_Com

Companies

The solar sector is reeling from confusion, and stock prices are reeling right along with it. The time it has taken investors and traders to wrap their heads around Trump’s industry tariffs and the pyrrhic victory of two solar companies in a case against cheap Chinese imports has seen stocks rally in a big way, and then fall just as hard.

When the International Trade Court ruled in favor of plaintiffs Suniva and SolarWorld in their case against cheap Chinese solar module and cell imports, reactions were polarized: the U.S. solar industry was outraged—as it had been for most of the duration of the court investigation—and investors, apparently, were extremely upbeat for the future of this same outraged industry, sending solar stocks sky-high.


The rally did not last long, though. While investors’ immediate reaction to the court ruling was of the unsurprising knee-jerk variety, reality started to set in over the last few days and solar stocks took a nosedive as sharp as the rally they enjoyed last week. Just what the solar companies needed after the ruling that threatened their chances of survival.

On the face of it, the court case doesn’t seem like such a big deal, but nothing could be further from the truth. Narrowly speaking, bankrupt Suniva filed a complaint with the ITC claiming that cheap Chinese solar panels and cells were instrumental in the company’s declining performance. Suniva, whose owners are Chinese, was quickly joined by German-based SolarWorld in its claim. The key word in the case was “flooded”: the U.S. market, the plaintiffs claimed, was flooded with Chinese-made cells and panels. The solution? A floor price of US$0.78/W for modules and a US$0.40/W tariff for solar cells—enter the broader picture.

One would think that these two would effortlessly win the support of their local sector players, competitors and all. But this is not what happened. What did happen was exactly the opposite: the Solar Energy Industries Association came down on Suniva and SolarWorld like a ton of bricks, claiming that tariffs and floor prices would be a stab in the chest for the U.S. solar industry, leading to project cancellations worth billions of dollars and massive layoffs, to the tune of a third of the total number currently employed in the industry.

Yet it’s easy to see why the ruling resonated with traders. Tariffs and floor prices are, after all, protective measures aimed—on the face of it—at protecting U.S. solar businesses from cheap imports. The problem is that sometimes, as in the Suniva/SolarWorld case, this is a dangerous oversimplification.

Contrary to what the plaintiffs in the case were claiming, there was no “flooding” of any sort, according to the solar industry association in response to the court ruling. What Chinese exporters did was merely provide U.S. solar installations builders with the necessary materials­—namely, cells and modules. In fact, the SEIA said, the plaintiffs were trying to blame Chinese cell and module makers for their own failure to turn in a profit because their products were subpar, while the Chinese suppliers were simply filling a critical gap amid booming demand for utility-scale solar installations.

The shares of utility-scale solar companies saw obvious effects of the investigation and the consequent ruling—chief among these: First Solar’s stock.

First Solar (NYSE:FSLR)

The country’s largest solar panel manufacturer’s shares added a stunning 78 percent between the end of March and last week, hitting US$51.99 on September 22, the day of the ruling.

That was the highest price for the stock for the past 12 months.

On Monday, First Solar’s stock reversed to US$46.88 as investors started to wrap their heads around the actual implications of the ITC ruling. As of late-morning trading on Tuesday, FSLR was at $46.44, down 0.94 percent on the day and down over 5 percent on the week.

Last year, First Solar announced it could take an impairment charge of between US$500 and US$700 million in the phasing out of the thin-film solar panel model it was producing at the time, its flagship Series 4, and speed up the development of the new model, Series 6. The Series 6 was expected go into production in 2018, and according to comments at the time of the announcement, would help First Solar to gain a competitive edge in a world of falling solar panel costs.

But what about the proposed tariff?

This is where it gets complicated for First Solar, because it’s not black and white—and when it comes to stock prices, well, it depends who is paying attention and what they’re paying attention to, exactly.

It would seem to make sense that a tariff on imported solar modules and cells would benefit First Solar, but not necessarily because it would boost sales by eliminating lower-cost imports.

On the contrary, a tariff on Chinese solar module and cell imports would benefit First Solar by allowing it to continue to produce its own modules and cells in Malaysia while competitors grapple with higher import prices. Why? Because First Solar does not use crystalline silicon for its modules. It uses cadmium telluride for its thin-film PV panels, so the tariffs, which specifically concern the more popular crystalline silicone solar products, won’t affect it.

But let’s not get ahead of ourselves. First Solar’s Series 4 is what is being produced in Malaysia, and that production capacity is being idled. So this immediate benefit of the tariff isn’t as great at it looks on the surface. It’s preparing for the launch of the Series 6 now, and it may have to reopen one idled factory in Vietnam to respond effectively to a hoarding urge in response to the ruling. This would add to the company’s cost burden in the short-term, but over the medium and long term, it could be a benefit—if tariffs go through.

Right now, the drop in FSLR’s stock price reflects the general confusion as to what this means for all solar stocks, and the reality hasn’t yet set in regarding this company’s future in a new regulatory environment. It also reflects the fact that no one can be sure if these tariffs are going to see the light of day, given the level of opposition from the industry they are meant to protect.

In the medium and long-term, First Solar could turn out to be one of the very few winners from the Suniva/SolarWorld case, so even though it’s lost over 5 percent this week, there’s room for a reversal.

Link to original article: http://oilprice.com/Alternative-Energy/Solar-Energy/Trumps-Solar-Tariff-Confusion-Creates-An-Opportunity.html

By Irina Slav for Oilprice.com

© 2017 Copyright OilPrice.com - All Rights Reserved

OilPrice.com Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules