Solar stocks yesterday gained the most in a month on speculation that demand for panels will increase in China.
The Bloomberg Global Leaders Solar Index (BLGS) of 37 companies jumped 4.6 per cent to $54.82 at the close in New York, the most since January 11, helped by gains at Chinese manufacturers.
Yingli Green Energy Holding rose 20 per cent, Trina Solar increased 19 per cent and LDK Solar advanced 13 per cent.
The rally may have been sparked by Renewable Energy ASA (REC), a Norwegian producer of polysilicon, which reported higher- than-estimated fourth-quarter sales, Pavel Molchanov, an analyst for Raymond James & Associates in Houston, said by e-mail.
Renewable Energy told analysts during a February 8 conference call that there was “a marked pickup in demand,” in the fourth quarter.
That increase, especially in China, “sucks up some of the excess supply,” Molchanov said yesterday. “Hence, Chinese producers are seeing a much bigger rally than the others.” Polysilicon is the main raw material in solar cells and rising demand is a leading indicator of a solar surge.
First Solar, based in Tempe, Arizona, rose 7 per cent yesterday and MEMC Electronic Materials, a St. Peters, Missouri-based maker of polysilicon, increased 8 per cent.
Investors covering short sales drove up share prices yesterday, said Jesse Pichel, an analyst with Jefferies Group in New York, who said forecasts of rising demand were “inaccurate.”
Cold weather and anticipated cuts to subsidies in Germany, the top solar market, are hindering solar installations, Pichel said in an e-mail yesterday.
