08:36 Chinese solar subsidy creates potential for a positive currency impact - Amtech
Amtech notes that while the Chinese solar subsidy remains difficult to quantify, it is clearly a long-term positive. Outside of a clear positive for demand, the firm views the potential currency impact as a major benefit for Chinese suppliers as demand begins to shift from Euro denominated regions to dollar denominated regions in 2010. A supply chain where demand center currencies are more in synch with input currencies will be a significant positive. The firm notes that solar is gradually moving along the same path wind did earlier this decade in terms of geographical demand. Demand centers in Europe are slowing, giving way to China and the US as the industry matures. The firm believes that the China stimulus will most likely accelerate this shift. Despite the recent volatility in the currency market, the USD/RMB pair has remained relatively stable, close to 6.80. The firm would expect this exchange rate to remain relatively stable in coming years as well given the US/Chinese debt relationship and the associated currency duration risk. The firm views more closely aligned currencies in the Chinese supply chain as an incremental positive for STP, JASO, YGE, SOLF, CSIQ, and TSL.
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