Doing some catch up on this stock. I dropped Suntech Power Holdings (STP) from the Jubak Picks 50 long-term portfolio http://jubakpicks.com/jubak-picks-50/ on January 18, but this first opportunity I’ve had the time to explain why in detail or to actually remove it from the portfolio. I’m working on explaining the other sells and buys from that group over the next week or so. (See the January 18 post at http://jubakam.com/2011/01/10-stocks-for-10-years-my-annual-update-to-the-long-term-jubak-picks-50-portfolio/ )

What worries me about Suntech Power Holdings (STP) in the long-term?

A new generation of investment in solar manufacturing that is likely to put Suntech even further behind on cost just when the company thinks it has caught up to competitors

At the moment Suntech has a cost problem. Read more

From squeeze to glut for solar silicon makers

Soleil Securities analyst Paul Lemming has issued a note warning of a polysilicon glut that will hit the solar industry in 2010, according to a post by Eric Savitz on the Barron’s Tech Daily Trader blog.

Over the next three quarters, he calculates, the amount of polysilicon available to the solar cell makers will increase by about 70% because every major producer of polysilicon will ramp new capacity in the first half of 2010. That will send the spot price of polysilicon to the mid $30s per kilogram over the next six months from the current $50 to $55 range. (Read more of Savitz’s post here http://blogs.barrons.com/techtraderdaily/2009/12/09/solar-huge-poly-glut-coming-in-2010-soleil-analyst-says/ ) Spot polysilicon sold for a high of $450 per kilogram at its peak in 2008 and for $130 to $150 per kilogram in February 2009.

The effects of this will be devastating on polysilicon suppliers who will see the price for the silicon that they deliver to solar cell makers drop. Already in February polysilicon maker MEMC Electronic Materials (WFR) announced that had renegotiated its contract with solar cell maker Suntech Power (STP).

Who will take the punishment? Read more