Pv Crystalox Solar Plc (LON:PVCS) , the Oxford based manufacturer of multicrystalline silicon wafers for solar power systems, announced this morning in an interim management statement that the group is experiencing increasing demand for it's products. The shares rallied more than 8% in early trading in contrast to it's listed peer group and general market weakness.
Growth is being driven by increased German demand before the impending cut in feed-in electricity tariff (FIT) that is expected to be implemented from 1st July. Germany is the largest market for photovoltaic module installations where FITs were introduced to encourage the use of renewable energy technologies. The company reports that in spite of the cut in German FIT, Q3 pricing and demand has remained firm.
Shipments in the first half of the year are expected to be in the range of 155-160MW in excess of previous forecasts of 145-155MW given at the 2009 preliminary results. The company has stated that wafer prices have stabilised as demand has increased and revenues and performance are expected to above management expectations.
Chinese demand continues to grow strongly as the world's largest manufacturing centre for PV modules as does demand from Japan which is benefiting from the reintroduction of subsidies and an FIT.
The group reports that polysilicon production costs will progressively decrease through the year and that the 2010 targeted wafer production cost reduction of 10-15% is making good progress. Margins are expected to improve into H2.
The company stated:
Whilst uncertainties remain, we are well positioned with our continued profitability, solid balance sheet and low cost base to take advantage of the anticipated future volume growth in the market.
