NEW YORK (AP) — The solar sector was hit hard Thursday after two more Chinese producers cut their expectations for the year, providing more evidence of a potentially long period of weak demand and prices.
First Solar, the biggest U.S. solar producer, was the biggest percentage decliner on the Standard & Poor's 500 index, tumbling 15 percent.
Yingli Energy Holding Co. Ltd. and JA Solar Holdings Co. Ltd. lowered 2012 shipment forecasts Wednesday and both reported wider-than-expected losses for the second quarter.
China's solar industry has expanded rapidly over the past decade with substantial government funding, exporting enormous amounts of products to the U.S. and Europe.
Western governments have accused Beijing of flooding the global market with solar technology and in addition to a glut of supply that has depressed prices, Chinese companies now face the possibility that anti-dumping tariffs will be imposed by the U.S. and Europe.
Since 2010, the price of polysilicon wafers used to make solar cells has plunged by 73 percent, according to Aaron Chew and Francesco Citro, analysts for Maxim Group. The price of cells has fallen by 68 percent and that of modules by 57 percent.
"Our checks suggest that downstream customers in Europe are pushing for very short delivery times, necessitating inventory builds," wrote Nomura analyst Nitin Kumar, who covers Yingli Green Energy.
"While we like Yingli for its cost structure, we see the company's preoccupation with market share is detrimental to profitability...," Kumar said.
In afternoon trading, shares of Yingli Green Energy fell 13 cents, or 7 percent, to $1.72; LDK Solar Co. Ltd. fell 2 percent to $1.35; Suntech Power Holdings slid 8 percent to 90 cents; ReneSola Ltd dropped more than 4 percent to $1.46.
First Solar Inc., which is based in Tempe, Ariz., fell $3.63 to $20.57.