LDK in trouble

[daytona600]

LDK $6Billion in debt , next to go to the wall , worlds largest wafer supplier trouble paying of interest on its debts
lots more pv suppliers to follow due to lower market pricing and slowed demand

 

[SibertSolar]

yes, I heard about this late last night Scott.....not good news, for various reasons...

 

[daytona600]

feared this for several years andy , like most mature markets will only be left with a very small amount of global suppliers
think 70/80s on PLCs 100s of suppliers of PLCs , now mostly all ge/siemens/allen bradley
ldk got into module production too late & this made them competitor to there main customers of wafers and cells
losing that big contract to Q cells for wafers did not help either & big investment in wafer/cell production at a time when silicon prices plunged
31% proposed imports on chinese modules to usa will do them no favours either

 

[pww]

"By 24/7 Wall St.

A story in today’s Taiwan-based Digitimes claims that some of China’s top solar panel makers are having trouble repaying their bank loans. LDK Solar Co. Ltd. (NYSE: LDK) is the only firm mentioned by name in the story, but other loan recipients include Suntech Power Holdings Co. Ltd. (NYSE: STP), Trina Solar Ltd. (NYSE: TSL), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), and Yingli Green Energy Holding Co. Ltd. (NYSE: YGE).
All these firms received a total of about $26 billion in loans during 2010 to expand their manufacturing capacity. That expansion has worked to drive down the cost of solar panels not only for the Chinese makers, but also for US firms like First Solar Inc. (NASDAQ: FSLR) and SunPower Corp. (NASDAQ: SPWR).
The addition of anti-dumping tariffs by the US will curb even further demand for China’s solar panels and there is some indication that anti-dumping investigations will begin in both India and the European Union, making an already desperate situation even worse.
The Digitimes report notes “that if one more large-size vertically integrated solar firm in China reports financial problems, the government is likely to adjust the entire supply chain.” Furthermore:
There is plenty of precedent for this kind of help from the Chinese government for its struggling banks. The solar industry has been a strategic investment for the government as well, and it is not unreasonable to assume that the government will take whatever steps it can to make sure the industry survives, even if a few of the players don’t.
Of the five tier one makers we’ve named here, one or two might not make the cut. All the tier two and lower companies are virtually guaranteed to disappear, just as essentially all the weak US companies have and the weak German companies are now disappearing. Taking a long position on any of the Chinese solar makers at this point is not for the faint of heart.
LDK’s shares are down more than -18% today, at $1.83 after posting a new 52-week low of $1.82 earlier. There is no other news on the company today."

Unless someone in LDK is REALLY friendly with the chinese government, certainly doen't look good...

 

[Earthstore]

Oh dear, it looks like many 25 year performance warrantee's may be totally useless soon.

The trend for PV is growing worldwide, we have seen a downturn in installations here in the UK thanks to our government, but what about the rest of the world?

This goes to show that to survive in business, you need to keep your profit margins at a reasonable level, and, it is sad to say but many of our solar install companies here in the UK will go the same way.

 

[moggy1968]

yes, many of us predicted this when we talked about the recent cuts in prices as being unsustainable in the long term.
In the long term this will not be in the consumers best interests. quality will drop and competition will be reduced with just a few big companies dominating the marketplace.
If you don't believe me take a look at your highstreet.

 

[Gavin A]

thing is, will the chinese government actually allow them to go to the wall for debts essentially owed to the chinese government?

Personally I doubt it.

 

[SibertSolar]

Fair point Gavin, I suspect that you are right although I doubt all the major Chinese manufacturers will survive the coming months, there are likely to be some strategic aquisitions and fall-outs along the way

 

[babba]

think is, will the chinese government actually allow them to go to the wall for debts essentially owed to the chinese government?

Personally I doubt it.

If they want to lose more cash they can prop them up but whats the point, you cant work for nothing forever, or in case of LDK and a lot more in China work at a loss. All good things come to and end.

 

[Gavin A]

If they want to lose more cash they can prop them up but whats the point, you cant work for nothing forever, or in case of LDK and a lot more in China work at a loss. All good things come to and end.

The point for the chinese is that they're aiming at securing a long term dominant position of the market by fair means or foul, and have never bought into this neoliberal economic rubbish our governments espouse, so absolutely do believe in serious state support for their industries, particularly in the renewables sector which they've specifically targetted as being in their national interests to be a dominant player in.

Having said that, China is now a WTO member, so its hands may be tied, though I'd think they'll find a way around that eg via a massive state programme to install the panels domestically... something that the announcement last week of $100 billion state spending on smart grid technology in China to enable greater levels of renewable penetration would seem to indicate is likely...

China's domestic PV panel market has attracted investment from both state-owned and private companies resulting in the country becoming the third-largest solar market in the world for new solar installations during 2011. With another roughly 25GW of projects planned and China's recent announcement of a solar generation feed-in tariff, it should be expected that this utility-scale development trend will continue, especially in the northwest region.

I expect a lesson in how to do state supported capitalism from China to compare with the neoliberal vision of 'let the market decide, unless it's a bank', but I may be wrong.

 

[Noshocks]

I was in Shanghai a week or so ago at the SNEC PV Expo, it reinforced my belief that the chinese are taking solar very seriously, 2000+ exhibitors with at least 400 different module manufacturers, mostly chinese. The europeans that were there were mostly German machine suppliers for making the modules apart from the usual inverter manufacturers, many of which seemed a bit underwelming against the up and coming chinese brands, example SMA and Auora only just introducing micro inverters, most of the chinese inverter manufacturers had them on their stands already.

I am sure that many of these module manufactures will go to the wall, however theres a lot of money, both state and private, been invested in China.

 

[babba]

Well China must have lost the plot, whats the point of sending panels all over the world at a loss or maybe they know the panels are rubbish and they are thinking of all the replacement panels the can supply in 11 years time.

Old chinese proverb sell crap, customer buy twice..

Great business plan, lord sugar would fire them.

 

[Gavin A]

Well China must have lost the plot, whats the point of sending panels all over the world at a loss or maybe they know the panels are rubbish and they are thinking of all the replacement panels the can supply in 11 years time.

Old chinese proverb sell crap, customer buy twice..

Great business plan, lord sugar would fire them.

loss leaders to build market share, at which point they probably can make money at those prices.

 

[Earthstore]

Neodymium Magnets are the most powerful rare earth magnets that you can buy,
Would you like to have a guess which is the only country in the world that supplies them because they have put all the others out of business?

 

[babba]

I know China are mass markerters but on this occasion I dont get it, you can install all day long for free but at a loss whats the point ? for all the reccos you get, to work for nothing again. They cant carry on lossing billions.