Mark Anthony

About this author:
Become a Contributor Submit an Article
  • Font Size:
  • Print

First Solar Inc. (FSLR) is a solar panel manufacturer. Its sole business is production of CdTe based solar panels. Its stock price has rallied about 10 fold since the IPO about a year ago.

I believe FSLR stock is overpriced. Moreover, this company has weak future prospects if you understand the fundamentals of its business. That's because it relies on cadmium telluride as its raw material. Cadmium is extremely toxic, but the mildly toxic tellurium is lethal to FSLR. FSLR is extremely vulnerable due to a possible shortage and price run on tellurium. It could find itself in trouble in a few years due to competing demands on tellurium.

Tellurium, the 52nd element, is extremely rare on earth, rarer even than platinum, the 78th element, according to Web Elements. Tellurium's crust abundance is 1 pbb versus 37 ppb for platinum (pbb is "parts per billion"). Tellurium is mainly produced as a byproduct from the anode slime accumulated during copper refining. But not all copper mines contain significant amounts of tellurium. Chile produces 1/3 of the world's copper but virtually nothing in tellurium. According to USGS and Arizona State Geologist Lee Allison, the world produces anywhere from 160 to 215 metric tons of tellurium a year.

Tellurium was traditionally used in metal alloys and other uses. Demand from emerging new applications, like DVD discs, digital camera, computer flash memory and CPU thermoelectric cooling, among other things, has caused a severe shortage in recent years, and drove the price from below $4 a pound to over $100 in 2006, according to Lee Allison. Jack Lifton on Resource Investor suggested that investors could sense the shortage and start to hoard physical tellurium, adding fuel to the fire and causing a huge tellurium price run.

How much tellurium does FSLR use? They use about 7 grams of cadmium and about 8 grams of tellurium in each of the 2 feet x 4 feet CdTe solar panel. That's roughly 135 metric tons per each 1 giga watt (GW) of products. They have signed a bunch of sales contracts with per watt price fixed and mandated to go down 6.5% yearly, and they are aggressively building new factories and expanding production capacity. After finishing a new factory in Germany, they are building four brand-new factories in Malaysia.

Alright, they have plenty of customers, plenty of sales contracts to keep them busy for five or six years, and Malaysia has plenty of land for them to build new factories. The growth potential looks unlimited. That's why investors bid up FSLR stock price like crazy.

But, where are they going to obtain all the new tellurium supplies needed for future expansion, at a price cheap enough to ensure profitability, and a quantity large enough to keep the new factories running? On Nov. 8, 2007, the CFO publicly commented that "we [FSLR] have identified terawatts levels of tellurium availability." He seemed to have no idea what he was talking about. One terrawatt is 1000 GW. Nowhere on earth does this amount of tellurium even exist underground, let alone available in a secret vault somewhere.

FSLR has a very dark future ahead for itself if a tellurium rush occurs as expected.

Full disclosure: I am short FSLR and I plan to invest in physical tellurium metal ingots.

This article has 102 comments:

  •  
    Thanks to SeekingAlpha for publishing my article on FSLR. I also want to point out a shocking fact to show how little the investing community know about tellurium, the vitally critical raw material the FSLR relies on. Go to TheStreet.com and search for anything that contains keyword tellurium, you get ZERO result. Search for gold you get more than 2000.

    Or search the whole internet. Do a yahoo search of FSLR, you get a quarter million hits. Search FSLR + tellurium, you get only 142. And the bulk of this 142 were related to my own writting about tellurium and FSLR. So the whole earth populace has almost perfectly zero knowledge of FSLR + tellurium.

    Please visit my blog to read some of my other writtings on stock fundamentals:

    stockology.blogspot.co.../
    Reply
  •  
    Nov 19 04:39 PM
    Probably one of the worse Seeking Alpha articles ever written. Not only was the grammer poor, the author's research was almost criminal. This article should be pulled or atleast the company should sue this author for false claims against the company. It is amazing you would allow this kind of crap to be part of Seeking Alpha. Do you let every idiot who is short a stock post a such slanderous material? If so, I hope you have good insurance, you are going to need it!
    Reply
  •  
    Nov 19 04:52 PM
    JJ, you are buying up a product that others give away as waste. Classic. Thanks for bringing me a smile today. By the way, stop by my place as I have some garbage I need to get rid of. I hear it is in short supply and that Waste Management is paying top dollar for it.

    Also, SWC down 4.7% today.
    Reply
  •  
    Nov 19 04:52 PM
    JJ, you are buying up a product that others give away as waste. Classic. Thanks for bringing me a smile today. By the way, stop by my place as I have some garbage I need to get rid of. I hear it is in short supply and that Waste Management is paying top dollar for it.

    Also, SWC down 4.7% today.
    Reply
  •  
    Nov 19 11:05 PM
    You clearly know very little about the Solar market or production of panels. 'Te' is only one of several options in the production of panels and production can be easily modified for other options.
    Reply
  •  
    Nov 19 11:13 PM
    Amorphous silicon and copper indium diselenide are the two principal competitors to cadmium telluride in photovoltaic power cells. This Te hype is way overblown. Buy all the Te you want, you may end up trying to sell it all at a garage sale.
    Reply
  •  
    Nov 21 10:54 AM
    There is a small, Vancouver Canada-based CdTe, CdZnTe supplier called Redlen Technologies. They have been working on a production process for years and are one of the suppliers of CdTe to FSLR. They are a private company now, but are venture backed. Might be worth paying attention to. I believe the other big supplier is 5NPlus - another private company.
    Reply
  •  
    Nov 24 10:53 PM
    It appears this whole vacuous article has been debunked now.

    Lee Allison -- the Arizona geologist whose comments you totally misunderstood in order to launch this sky-is-falling scam -- has himself put the final nail in the coffin:

    ...Allison said last week his posting should not be construed to suggest there is a shortage that threatens First Solar. "World production is only a couple hundred tons, but there is a lot more sitting in the copper being produced. It is just that nobody is recovering it," Allison said.

    -----

    Are there other, real challenges facing FSLR? There sure are. But this tellurium supply thing... time to let it go.
    Reply
  •  
    Zenlitened:
    It's a shameful fabrication on your part. You could not cite any source where Allison said those words. He made those comment "LAST WEEK"? Thank good God this Seeking Alpha article is only out on Monday this week, Nov. 19, today is Nov. 24. He coud not have saw my article last week and could not have said anything regarding my article last week.
    What a shame!
    Reply
  •  
    Sorry. Found the source. My apology to Zenlitened:
    www.azcentral.com/ariz...

    The journal probably meantioned "last week" by accident. In any case, Lee Allison did not back off from his basic facts on his May 21 blog post. So I stand by on these facts provided by Lee Allison, i.e., tellurium annual production 215 tons, and tellurium price went up from $4 to $100. Beyond that Lee Allison can have his own opinion, notwithstanding the facts.
    Reply
  •  
    Nov 25 01:22 AM
    Save it.

    Your apology is as worthless as everything else you've posted, whether you call it "fact" or not.
    Reply
  •  
    Nov 19 11:02 AM
    Mark, I must say I have not seen anybody on this site that has stronger convictions than you. All your postings come with solid analysis, so cheers to good research on your part. I do agree that FSLR is overhyped, but I do feel there may some sense of blind optimisim that might bring you several margin calls before serious profit. I think it will be a long time before telerium actually gets a larger public spotlight where it can show how FSLR might be facing some trouble. However, that is not likely to happen for a while, and is more likely to touch 300 before touching 100.

    I hope it works out for ya. Either way, your articles and blog have good insight on a little covered area of the alternative energy space.
    Reply
  •  
    Nov 19 12:37 PM
    If you weren't short the stock, the article would have meant more.
    Reply
  •  
    Nov 19 12:43 PM
    It is a tremendous disappointment to see that Seeking Alpha has published an article with vetting this author and the facts presented.

    The author of this article, who goes by multiple IDs has been widely known as a MAJOR SPAMMER especially for the stock SWC. Just go see the Yahoo Stock message boards for SWC.

    He uses the IDs of ii2000426, tellurium_investor, jj2007pd46,
    silverbutter, and a few others on Yahoo. His main ID was jj2000426 which he deleted once it was clear other posters were exposing his horrific results by referencing his old posts there. He is known by JJ on the boards and from his blog.

    He uses multiple IDs to make posts, reply to himself, and rate his own posts.

    So one basic question has to be asked before listening to a poster like this.

    What legitimate person finds the need to delete old IDs?

    Further, what legitimate person has the need to maintain multiple IDs to actually reply a further pump up threads?? (And yes, I actually have proof of threads where he talks to himself but forgets what ID hs is on.) Here's one:
    messages.finance.yahoo...

    He has pumped and SPAMMED numerous boards, blogs, and even a church blog for SWC for the past year. The stock has gone nowhere.

    He got in to NEW (mortgage company) early this year and incessantly pumped it. Every other day, he was "laoding up" on the stock or "backing up the truck." Needless to say, NEW went BANKRUPT (see NEWP).

    Now he finds himself stuck in FSLR. He has been short on this stock since about $100 and currently FSLR trades over $200.

    According to his own admissions, almost 100% of his portfolio is invested in 2 stocks in a small niche sector (PAL, SWC). Would any one of a sound investment mind, put all their money into just one sector??

    When FSLR announced int's earnings, JJ started screaming all over the FSLR boards about how the earnings were a "scam" and a "fraud" and then how there were "accounting errors" and how he was "calling the SEC." Well, that did not work so now he has a new tactic as you can see above.

    Look, all I am saying is BUYER BEWARE. This is a post by an investor, and I use that term loosely, who is unethical and most his positions (SWC, PAL, FSLR) have moved over 60% against him. He also bought into at least one stock that I know of, which went bankrupt.

    I have been monitoring him on the many Yahoo boards he posts, to warn unsuspecting readers.

    If you want more information, contact me on one of the above mentioned boards; unlike JJ I use the same ID as I use here.
    Reply
  •  
    Nov 19 12:49 PM
    That's me above this. Not sure why my handle was not published.

    "Bipolar_Trader&q...
    Reply
  •  
    Seeking Alpha held to high standard of publication. Seeking Alpha does not censor opinions, as long as the opinions are backed up by solid facts and logical arguments. I have cited all credible and solid information sources to back up my claim, including the USGS and Arizona Geologist, on my blog site you can find more information citation. So no one can pick up on the due diligence I have done.
    Reply
  •  
    Nov 19 02:50 PM
    I don't know if I'd go short FSLR right away, but buying ingots sounds good. According to your stats, they put $1.76 of tellurium into each 2x4 panel. It appears that works out to 3 cents per watt, and they are charging $2.48 per watt (check my math but I think it remains relatively insignificant). It will eventually become a limiting factor, but FSLR's margins are pretty good right now, so think its more likely they can outbid anyone else out there.

    Supposing they can outbid others to say $1k a pound (appropriate for the rarest element on earth I think), they might get 75% of the market (a stretch) and then max out a little over 1 GW. That is about $2.5 billion in revenue. I'd guess that would result in around $300-500mill profit. That means say 3-5 years from now, growth grinds to a halt, and, with no share price appreciation from today, they'd be at a P/E of 35-50, mighty steep for a Co. with no growth prospects.

    I'd be inclined to wait another quarter or two for them to continue their explosive growth, catch it at maybe $300, and then re-mortgage the house and short it to the hilt.

    Where can you buy Te ingots?
    Reply
  •  
    Where to by tellurium metal ingot? Try this location:

    www.micronmetals.com/t...

    Make sure you buy metal ingot, NOT powder. You need to hurry. If too many people contact them first you are out of luck.
    Reply
  •  
    Tellurium, at current price, is still not a big concern to FSLR's profit margin. But in the very near future it WILL! From the source where I purchase tellurium metal ingot, I know the price is going up more than 2% a week. So that's a double in every 8 months. So 3 cents per watt could double every 8 weeks to 6 cents, 12 cents, 24 cents, 48 cents. At 24 to 48 cents per watt cost I guess FSLR will have to consider shut the business down.

    It is wrong to assume FSLR can outbit others just because tellurium is still affordable to them right now. The point is tellurium is still very affordable to EVERY tellurium user at current price. FSLR has NOT outbid any one and it will NOT outbid any one. There has been no demand destruction yet. But demand destruction MUST happen at some price point. I expect that price point to be much higher than current price, and FSLR will be the first to be kicked out because it uses waymuch more than any one else, per unit of product.

    For that reason tellurium investment is a very good idea. I am not willing to disclose where to buy tellurium yet. But I found it on the web. If you are determined enough you can find out, too.
    Reply
  •  
    Nov 19 03:20 PM
    Your premise is based on an extrapolation from the current situation that is based purely on your conjecture, not a forecast from a reliable source.

    Furthermore, your statement that "First Solar could be forced to go out of business" does not follow from your premise that tellurium production could reach a ceiling; it merely could limit First Solar's production at a given cost. Currently polysilicon, the analogous ingredient in most other company's solar panels, *is* in limited supply - and yet the largest silicon-based companies are growing their production rapidly.

    I agree with other responders here who are disappointed in SeekingAlpha's fact-checking. Clearly they have reached a limit with respect to availability of good-quality content.
    Reply
  •  
    Nov 19 03:41 PM
    "So no one can pick up on the due diligence I have done." Indeed, reading your article I was unable to pick UP on any due diligence, but I'll gladly pick APART your sorry substitute.

    A necessary step in your proposed reasoning is just how high the price of tellurium has to go -- how extreme the "expected" rush needs to be -- before it could dent First Solar's growth, let alone put the company out of business. Tellurium, a key part of FSLR's production, is nonetheless a tiny input.

    According to a paper by U-C Berkeley researchers (lo and behold, you're not the only member of the "earth populace" to look at solar companies through the lens of materials scarcity), tellurium would have to shoot up another 20-fold before destroying FSLR's current cost advantage over competitors -- and that's even assuming, ambitiously, that competitors' costs don't also rise. socrates.berkeley.edu/...

    To illustrate, inversely, if the worth of your writing as investment guidance were rise to 20-fold, only then might it be competitive with, say, laying out pages of the WSJ in the local dog park.
    Reply
  •  
    Nov 19 03:41 PM
    "So no one can pick up on the due diligence I have done." Indeed, reading your article I was unable to pick UP on any due diligence, but I'll gladly pick APART your sorry substitute.

    A necessary step in your proposed reasoning is just how high the price of tellurium has to go -- how extreme the "expected" rush needs to be -- before it could dent First Solar's growth, let alone put the company out of business. Tellurium, a key part of FSLR's production, is nonetheless a tiny input.

    According to a paper by U-C Berkeley researchers (lo and behold, you're not the only member of the "earth populace" to look at solar companies through the lens of materials scarcity), tellurium would have to shoot up another 20-fold before destroying FSLR's current cost advantage over competitors -- and that's even assuming, ambitiously, that competitors' costs don't also rise. socrates.berkeley.edu/...

    To illustrate, inversely, if the worth of your writing as investment guidance were rise to 20-fold, only then might it be competitive with, say, laying out pages of the WSJ in the local dog park.
    Reply
  •  
    Nov 19 07:55 PM
    Interesting that you would post that summary of the Berkeley study - The Berkeley conclusion was that due to material (Te) limitations and competition that CdTe panels would stay a small player by 2010.

    - Berkeley qoute "Current production targets for CdTe still represent a small portion of the total solar production by 2010. If CdTe took over even a small portion of the market, we would then likely see resource constraints and the kind of material cost increases discussed previously. Therefore, the market will most likely be set by a mix of other technologies." pg31.

    While not as alarmist as the OP here, the Berkeley conclusion is similar- that Te will limit CdTe panel growth - and at this point, with a PE close to 200, FSLR is pricing in massive long term growth that may not happen.

    It is also an interesting idea to consider that for only $4M a competitor or say Chinese solar player could easily grab 200 tons of Te a year and provide just the type of price shock that that is imagined here.

    Any alternate sources would be far too late to prevent the effects of a demand spike.

    The current price for Platinum is over $23,000/lb it is not too hard to imagine Te at $2,000/lb or even higher than 20X in a short time period.
    Reply
  •  
    Nov 21 04:38 PM
    Indeed, the Berkeley study states that costs and competition will constrain FSLR's growth -- just as they do the growth of every company! In spite of the author's doomsday tone, I fail to see why tellurium is such a special case. If one is inclined towards believing in peak oil, in part because we've explored the most fertile fields, then one can readily find evidence to support one's case. But catastrophic tellurium scarcity is woefully undocumented, perhaps because, until now, nobody has given a d*mn to document it.

    You say that it "is not too hard to imagine" skyrocketing tellurium prices. But on the flip side, it's not too hard to imagine plummeting prices as well. Human beings can imagine all kinds of scenarios. Smart investors, however, look for fact and coherent logic in order to harness their imagination. I haven't found either in the arguments of Mark Anthony (or of his alleged aliases).
    Reply
  •  
    Nov 19 08:18 PM
    Nice reference to Morgan et al, they also mention

    "If CdTe took over even a small portion of the market, we would then likely see resource constraints and the kind of material cost increases discussed previously." [20x]
    - How is it ambitious to anticipate solar silicon costs are likely headed down?

    "For emerging thin film technologies such as CdTe and CIGS
    we derived cost data based on conversations with suppliers (First Solar), public disclosures, and projections from various industry analysts."
    - would like more details about costs!

    Reply
  •  
    Nov 21 05:16 PM
    Contextually, "[t]he kind of material cost increases discussed previously" means increases in the cost of tellurium, not (as your editorial brackets would indicate, 20-fold increases in the cost of tellurium).

    On your second point, I remain unconvinced that the silicon shortage will ease significantly in the next few years, and therefore contend that it's a heckuva lot more ambitious to expect higher silicon costs than it is to predict that FSLR's business is doomed, which, let us not forget, is the extreme position which the OP has taken, and probably, based on his position, took that opinion first before looking for evidence to support it.
    Reply
  •  
    Nov 24 05:54 PM
    well the 20x increase in Te price was 'discussed previously' anyway Te demand appears super inelastic

    You mean less ambitious? I am glad you think polysilicon stays strong, I have some LDK (no FSLR either way) and hope there is no lemming like rush to overproduction

    whatever the OP motivation the technical details of the debate have turned out to be intriguing
    Reply
  •  
    GH:

    One thing you don't understand is that you presure that since global tellurium production is limited, it merely put a cap on how much FSLR can produce. So you think FSLR will be capped in growth but does not go out of business.

    But you completely forget that they are NOT the only tellurium users. There are other emerging new tellurium applications, in DVD discs, in new flash memory chips, in electric-cooling CPU chips, etc. Those new application alow can drive tellurium price to a level inaccessible by FSLR, without FSLR buying a single pound of tellurium. They will kick FSLR ot of the club.

    In another word, tellurium price will go up so high that FSLR can not afford to buy even one pound at that price, because they will not be able to produce anything at any profit margin at that price. They will have to simply give up the business at that point.
    Reply
  •  
    Nov 19 04:25 PM
    You make the completely unwarranted and ignorant assumption that there is one grade of tellurium available and FSLR must use that one. However, if you listen to the Q&A after First Solar's presentation at last week's Pacific Growth Equities conference, before stating the "Terrawatts" availability that you derided, the FSLR representative (their CFO) pointed out that they do not require the highly refined tellurium used in other products. Later in answer to a second question he said that a few copper processors produce most of the current tellurium supply, but most miners that produce byproduct tellurium - including others such as gold - currently consider it a waste product and discard it. Further backing his statements, we can consider that First Solar's scientists have been acquiring and working intensively with this substance for decades, and the CFO is in charge of working with them to maintain a robust supply chain that will support their expansion plans.

    A company CFO can go to jail for misrepresenting his company's fundamentals to investors at a public conference. Or we can listen to you, a Johnny-come-lately amateur writer and investor with a short position.

    By the way, for anyone who's interested, the conference audio can be heard here:
    www.corporate-ir.net/i...
    Reply
  •  
    Nov 19 04:28 PM
    I see seekingalpha's posting software messed up the corporate-ir link I just posted. Here's one that it won't mess up:

    tinyurl.com/2gv27b
    Reply
  •  
    The exact spot where the CFO made that terawatts comment is at 22'58" in the audio recording. It's an outrageous lie. He used the words "WE", FSLR the tellurium consumer, not geologists, and he used the word "availability&quo... implying this stuff is some where in a secret vault ready to be shipped. That is a very irresponsive public statement.
    Reply
  •  
    Nov 19 07:05 PM
    Let's do some math here.

    A Terrawatt is 1000 GW. Terrawatts must be at least 2000 GW - let's assume that the CEO equated 2 TW as "Terrawatts"...

    1 GW of power requires about 135 tonnes of Te. So, 1000 GW should require about 135,000 tonnes, and 2000 GW (2 TW) requires about 270,000 tonnes of Te.

    So, the CFO indirectly stated that there is 270,000 tonnes of Te available, presumably for FSLR's exclusive use.

    According to the USGS, the GLOBAL reserve base is only 21,000 tonnes.

    minerals.usgs.gov/mine...

    Seems like the CFO has some connections from another planet.

    Please correct me if I'm wrong - otherwise, would you still invest in FSLR knowing this?
    Reply
  •  
    TheThought:

    Do you understand the concept of Demand Destruction? See wikipedia entry:

    en.wikipedia.org/wiki/...

    Currently Te only costs FSLR 3 censt per watt. You think a price raise of 10 folds or 20 folds is not possible? Think again. The price does not raise on its own. The price already went up from $4 to $100, because there is a shortage. When there is a shortage, price will have to keep raising, until either supply is increased, which is not quite possible if you understand how tellurium is produced, or, there MUST be demand destruction to bring demand down to match the level of supply.

    As FSLR is the largest tellurium consumer per unit of product, it will be the first victim of demand destruction. I ahree that demand destruction will happen at price way much higher than current price. But it MUST happen, that's economic 101. So invest in tellurium right now is a pretty good idea because you know demand destruction is way much higher from current level.

    A tellurium rush will speed up FSLR's demise for sure!
    Reply
  •  
    Nov 19 04:29 PM
    Stephen O'Rourke of Deutsche Bank wrote a good piece on this in a recent review, and he not only concluded that Te is not a short-term problem (say 20 GW/yr), but there are untapped, huge mid- and long-term sources. There are reasons people haven't been aware of them before.
    Reply
  •  
    Are you the real Ken Zweibel from NREL, and now in PrimeStare. Alright, we have some big people here and we can have a good debate.

    The fact of the matter is despite of rapid price raise in recent years, there is no indication that tellurium supply has increased. So the market fact does not agree with your analysis in 1999. WHY?

    I think your analysis of the tellurium supply potential was frauded. You assume all copper world wide contain the same high concentration of tellurium. Chile produces 1/3 of the world's copper but nothing in tellurium, why? You also assume there will be no emerging new technology that uses tellurium. You never heared about burnable DVD in 1999, or flash memory, or a CPU that's coole electronically. All those things use tellurium.

    Last but not the least, although you are now a competitor of FSLR, you have a huge vested interest to defend your 1999 analysis of potential tellurium supply. You have spent 30 of your best years doing scientific research at NREL. I respect that. To admit that tellurium supply can not increase significantly from 200 ton level, is to admit that you have wasted 30 years of your best time and your best energy research something that does not have a future. That, is as bad as some one take half of your life away. You absolutely can not accept it, emotionally. So you have a vested interest which will bias your view point. I do have a bias due to my short position on FSLR, but it was a totally insignificant stake compare with your 30 year academy life.

    Mind go to my blog and continue the debate? Seeking Alpha seems to be slow in posting comments.

    Reply
  •  
    Nov 19 05:43 PM
    The key variable missing is time. How long before tellurium becomes prohibitively expensive? If, as some posters have alluded to, there are more sources but they are not profitable at today's prices, there is a long time to go. (Long-time with regards to a short or long position in the stock.)

    Also, what about substitutes? Maybe the company is run by idiots, but if they know they are dealing with a very rare substance which could potentially soar in price, perhaps they are investing R&D in a solution? This goes for the chip manufacturers and everyone else.

    Finally, you assume that because FSLR uses the most tellurium, they will suffer demand destruction first. But the question is a) how critical is tellurium to the manufacturing process and can it be substituted and b) what is the profit margin. Again, across all industries.

    For instance, movies are already downloaded. If tellurium became too expensive, DVD prodution could fall without affecting sales as consumers transition to digital.

    Reply
  •  
    HuangJin:

    If there is an investor tellurium rush, it takes only a few months to knock FSLR out of business. Without an investor rush, it takes longer but FSLR wil be out of business in a few years nevertheless.

    FSLR's sole business is entirely based on CdTe. Replacement? They can replace with regular Si solar panels. They might as well demolish the factories and start over to build silicon factories, which gives them no competitive advantage.

    Other applications use far less tellurium, per unit of product, than FSLR. When tellurium price is so high that FSLR is no longer profitable, to DVD vendors probably that just add one or two cents per disc and they can afford it. It probably cost intel half a cent per CPU which sold for $300. So Intel can afford it. But FSLR will have no profitable margin at that kind of price. So they will be the first victim of demand destruction. First to be kicked out of tellurium club.
    Reply
  •  
    Nov 19 08:54 PM
    The USGS "2006 Minerals Yearbook: Selenium and Tellurium," published in October, 2007, might be useful in this, uh, discussion:

    minerals.usgs.gov/mine...

    ...In 2006, the prices for selenium and tellurium decreased as consumption for the metals decreased and global production increased. Domestic production of primary selenium and tellurium increased in 2006...

    ...World demand for tellurium is thought to have decreased slightly in 2006... With the historical high prices, many metal companies have cut back consumption or replaced tellurium. Consumption in many of the other uses has increased but not enough to offset this reduction....

    ...Consumption of tellurium in electronics applications was estimated to have increased in 2006. High-purity tellurium is used in electronics applications, such as thermoelectric and photoelectric devices...


    ...The United Kingdom price for lump and powder, 99.95% tellurium, as published in Mining Journal, started the year at $100 to $120 per kilogram. After the average tellurium price reached an alltime high of $155 per kilogram on June 13, the price fell throughout the year and ended the year at a range of $50 to $70 per kilogram...


    Outlook:

    The supply of selenium and tellurium are directly affected by the production of the principal product from which it is derived, copper, and to a lesser extent, by the production of lead, nickel, or zinc, produced from a sulfide ore. Since global production of selenium and tellurium-bearing copper ore was expected to rise in 2007, global selenium and tellurium production will probably also increase. Recycling of obsolete copiers and other electronic waste material has been increasing during the last couple of years. Increased environmental regulation and prices have encouraged the recycling of electronic scrap and have increased secondary production of selenium and tellurium...

    Reply
  •  
    During any commodity bull run there are always ups and downs. It may be true that there was a brief down period in second half of 2006. But it rallied again in 2007. You are not going to find end of 2006 price today any where in the world.

    Also note that 2006 USGS paper rarely talked about CdTe. FSLR had only one production line during the most part of 2006 so the demand wasn't significant yet. Now it has 7, and each one producing at almost twice the speed. So it's 12 to 14 times higher demand than 2006.
    Reply
  •  
    Nov 19 09:44 PM
    Biggest bunch of crap I have ever read. I mean of course you short putting out fraudalent material such as this. Seeking Alpha should be ashamed letting something like this out.
    Reply
  •  
    Nov 19 11:10 PM
    Amorphous silicon and copper indium diselenide are the two principal competitors to cadmium telluride in photovoltaic power cells. This Te hype is way overblown.
    Reply
  •  
    Nov 20 12:19 AM
    From a new investor w/o much knowledge of geology and chemistry:

    Well! I was about to post a question -- namely, why sell immediately avoid a total loss? It doesn't seem warranted from the article itself, and for someone like myself (expecting a serious correction or bear market) it makes a lot of difference whether it is real soon, a few months,, or a few years.

    I decided to check the comments first. Glad I did! Here are a few comments not made yet.

    1. If Mr Anthony is the maldoer (I just coined that) suggested here, that would explain it. And the 2-3 mos. he mentions in a preceding comment might be enough to cover his shorts (altho isn't it now 60 days' max?). But please note that he is forthright about his short position.

    2. I thought his article seemed knowledgeable and plausible right up until that last paragraph. Why is Seeking Alpha negligent for not being aware of a problem (assuming there is one)? Seems unfair to them. Do they do peer reviews? I assume not, since these articles are turned out very fast. (In fact, I've also assumed that's the reason for lots of grammar-and-so-forth errors in these fin. articles, many made by clearly articulate and literate writers.)

    3. If he's all he's supposed to be, Seeking Alpha should be informed -- in particular, of the accusations made by User 123811. Please do tell them; ingenues like myself need protection from that sort of thing.

    4. At one point it seems as if the order of postings was reversed. Mr. Anthony first tells us where to buy Tellurium, and then states he won't tell us. Sounded really out of it until I noted that the order of the posts had been reversed. That's also worth mentioning to Seeking Alpha, although it might well just be a one-time glitch.

    I do hope you all keep the rest of the comments on this site. Moving it elsewhere would be a disservice to most of us.

    BTW: As a woman, I can easily understand using more than one pseudonym, and/or changing them. (On the other hand, I thought that talking back and forth to yourself by using different names was only done as a joke, on stage -- or at press conferences.)

    I don't have more time for this, but will try to check back later to see if there are responses to my comments and the implied associated questions . . .
    Reply
  •  
    Nov 20 05:16 AM
    lots of people attacking the author of the article but it tells a lot that nobody of them has produced a single argument or fact against the Tellurium shortage scenario. Just statements without any proof while Mark Anthony has come up with sources, data facts.
    Equally telling: a couple of posters have been calling outright for seekingalpha to censor/delete the article since it was "fraudulent" or "misrepresenting facts". incidentally none of them has even bothered to show the slightest "misrepresentatio... lie or whatsoever. Except for one poster citing a Berkely study 8which rather supports Mark Anthony, btw) the negative commentators have induldged only in personal attacks with a remarkable and complete lack of any substance, facts, proofs etc.
    I urge seekingalpha to keep this article and not to succumb to people making hell of a noise with hardly anyone of them even knowing, obviously, what they are talking about
    Reply
  •  
    Nov 20 05:39 AM
    Regarding "investor runs" for Te. Is there another user other than FSLR that will have fast growing need for Te? If Te price skyrockets as you wish and FSLR goes out of business, wouldn't Te end up collapsing in price? Then who's going to hoard and push Te prices to the point of FSLR's demise so you can make money on your FSLR short position and they would lose all their investment in Te? Your mama?
    Reply
  •  
    There are emerging new Te applications enough to push Te price to very high level, even without FSLR's CdTe demand. The price run in the past several years was due to non-solar applications, because FSLR did not start significant mass production until this year, 2007. FSLR's own rapidly growing demand could only add fuel to fire.
    Reply
  •  
    Nov 20 07:37 AM
    I agree with fxtrader_2007, all the arguments and personal attacks, seem to only strengthen Mark Anthony's view. After reading all the comments, no one has managed to come up with any current facts or valid viewpoints to debunk his claims. So far, the debate seems to be Mark Anthony 1, Readers 0.

    My Question is: Is there somewhere a futures market for Tellurium that FSLR has managed to guarantee their supply, or a reasonable price ?

    P.S I am not going to buy Tellurium, but probably will be shorting some solar stocks such as FSLR with a P/e > 200 in the future.

    P.P.S There is nothing wrong with the ordering of the posts ... The issue is to do with whether the post was a reply to an earlier post, or a reply to the original article. This determines the order.
    Reply
  •  
    Gregory:

    The global tellurium market is extremely narrow. There is no future contracts traded on this commodity. There doesn't even exist an international exchange where this commodity is traded. All trades are direct cash transactions between producers and consumers. One place I inquire about tellurium this morning, The MicroMetals. They do not have any inventory, and will have to call me back regarding future availability and price. I do have secured tellurium from another source I am not willing to reveal, but is still waiting for shipment. People ask the CFO of FSLR where to buy, if he had identified terawatts level of tellurium availability.
    Reply