Mark Anthony

Solar Stocks Are Overheated

There is now a Seeking Alpha article on First Solar and tellurium:

First Solar Vulnerable to a Tellurium Shortage

seekingalpha.com/artic...

I recommend shorting FSLR. I also hoard tellurium metal ingots.

Solar Stocks Are Overheated

Let me provide some link to supplement the tellurium knowledge

Is a tellurium rush in the making:

www.resourceinvestor.c...

Arizona Tellurium Rush:

arizonageology.blogspo...

Solar Stocks Are Overheated

Neal:

You looked at the silicon supply prospect and hence made an exception case for FSLR. I am sorry to say you are completely wrong. FSLR faces a way much worse supply nightmare than silicon based solar players.

Silicon is the MOST abundant element on earth. Any silicon shortage is only temporary. It's only a matter of setting up new silicon factories to get new silicon supply. Long term, silicon shortage is not the fundamental factor.

FSLR, on the other hand, uses the cadmium telluride material. Cadmium is extremely toxic and extremely harmful to environment. But the worse problem is tellurium is one of the rarest elements on earth, rarer even than platinum. According to Arizona State Geologist, the global production is estimated to be only 215 tons per year. Some estimate put it even lower at 168 tons per year.

Global tellurium price raised from below $4 a pound to well over $100 a pound in just a few years, implying severe shortage, even without significant CdTe demand yet, as FSLR only start to ramp up production this year. Emerging demands include DVD and computer flash memory, among other things.

In comparison, FSLR consumes about 135 tons of tellurium per GW of solar panels. I do not know how they are going to find the tellurium source when their new factories start up in Malaysia. Even if they can get the tellurium, it's likely their own demand will drive tellurium price up to such high level that they are no longer profitable.

FSLR is a company whose profit margin and growth potential is tightly squeezed and capped by its own tellurium demand. There is no future for this company. It really does not deserve this kind of ridiculous valuation.