Thursday, April 7, 2011

Wind Turbine Demand Crumbling as (AMSC) Crushed on Shipment Halt

The refusal of China-based Sinovel Wind Group Co. to accept any more shipments of components and parts resulted in the heavy punishment of shares of American Superconductor (NASDAQ:AMSC), of which Sinovel is its largest customer.

Some say this is the consequence of the company relying too much on the wind turbine manufacturer, but in fact the overall industry is under pressure as demand for wind turbines plummet.

High inventory levels were given as the reason for the refusal to accept shipment of the parts by Sinovel, which is another way of saying it can't sell its turbines.

Major turbine manufacturers from India have also been searching for markets outside of their traditional base, as demand for turbines dry up, expected to continue to be 30 percent below 2009 levels through 2011.

Sinovel accounted for close to 75 percent of American Superconductor’s total revenue for the nine month period ending December 31, 2010.

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