Germany is losing more and more of its market leading position in renewable energy production to the United States and China.

Germany’s solar power industry, until recently the world leader in the technology, is facing an unprecedented crisis, analysts say, outshone by cheaper competitors from Asia, most notably Chinese firms.
Q-Cells, the world’s biggest solar cell producer, last week issued a far from glowing set of results, with losses of 700 million euros ($984 million) in the first half of the year, AFP wrote.
As a result, the German firm said it would cut 500 jobs from its workforce of 2,600 and put others on part-time working arrangements.
The crisis in the German solar industry is affecting small companies as well as giants such as Q-Cells. Only three months ago, startup Sunline declared bankruptcy with the loss of all its 78 employees.
A glance at the TecDax, Germany’s tech-heavy stock market index, nicknamed ’SunDax’ for the predominance of solar firms, tells the story, with some companies losing around 30 percent of their value since the start of 2008.

Price Rivalry
“The fact is that Germany is losing more and more of its market leading position in renewable energy production to the United States and China,“ said Matthias Fawer from Swiss bank Sarasin, quoted in German weekly Die Zeit.
“Asian cell and module producers are going to squeeze out the Germans,“ Anne Kreutzmann, the chief editor of solar trade newspaper Photon, told the Financial Times Deutschland.
The main reason is simple: Chinese solar power companies are able to produce cells much more cheaply, due to lower labor costs and also the plummeting price for silicon, the raw material for solar cell manufacture.
Whereas German firms are tied in to long-term contracts for silicon deliveries, Chinese firms have been sourcing it from the spot market, where the price has dropped by around 70 percent in the past few months.
According to a survey from Photon Consulting, while it costs a German firm such as Ersol 1.01 dollars per watt to produce a solar cell, Chinese company Suntech can manufacture the same cell for 35 cents per watt.
All in all, production costs for the solar industry are as much as 30 percent lower in China than in Germany, according to a UBS study.
Chinese firms also benefit from state support and the effect has been to push prices for solar cells down significantly in the past few years.

Market Share
Adding to its troubles, the German solar industry’s export market, which accounts for over 40 percent of turnover, is beginning to dry up in key areas.
For example, following the decision by the Spanish government to stop subsidies for installing solar panels, the market there, which had previously enjoyed 200-percent growth rates, has crashed.
The consequences could be severe for the industry, which in 2008 employed around 75,000 people and turned over approximately seven billion euros, according to the latest data from industry association BSW.
“A large proportion of German solar cell and solar module producers will not survive,“ Patrick Hummel, an analyst from UBS, told the Financial Times Deutschland.
China’s market share for solar cells is already on the increase, with around one in three cells already produced there, according to industry estimates.
And faced with this competition from the east, the attitude of many firms has been: if you can’t beat them, join them.
Q-Cells is shipping solar cells to China to transform them into solar modules and recently announced a tie-up with Chinese solar wafer firm LDK Solar. The firm has also opened a production line in Malaysia.
Another German firm, Solarworld, has already built a factory in South Korea.
Kreutzmann, from Photon magazine, said German industry will be pushed out of the way unless the Germans in future also shift their production to Asia.

Iran has reached preliminary agreements with companies from Russia, Turkey, South Africa, India and Oman to finance domestic petrochemical projects, the National Petrochemical Company’s managing director said on Monday.
Mehr News Agency quoted Adel Nejad-Salim as saying, “Some $3.3 billion are required to build new petrochemical units and complete semi-finished projects by the yearend (March 2010).“
“Negotiations are underway with the firms to secure the money needed for the establishment of urea, ammonia, polyethylene, olefin, and methanol production units,“ he added.
He noted that Iran and Oman have already signed a memorandum of understanding to construct the Hormuz urea and ammonia production unit in South Pars region, southern Iran.
The petrochemical unit is projected to annually produce around one million tons of ammonia and 650,000 tons of urea.
The production unit is estimated to cost $800 million, which will be financed on a 50-50 basis by both sides.
“Four petrochemical projects with a total investment of $1 billion will come on stream within two weeks in the Pars Special Energy Economic Zone,“ Nejad-Salim explained.
Referring to the Zagros Petrochemical Complex’s second unit as one of these projects, he said, “Once the unit comes on stream, 1.65 million tons will be added to the country’s methanol production capacity.“
According to Zagros Petrochemical Company’s managing director, by putting the unit into operation, the country will reach the annual methanol production capacity of 6.05 million tons, 12 percent of the world’s total capacity.
Oil Minister Gholamhossein Nozari had previously stated that launching 10 new petrochemical units, including the inaugurated Mehr Petrochemical Complex, will add 8.8 million tons to the country’s petrochemical output by the end of the current Iranian year (started March 21).
“Through a $4.3 billion investment, the projects will be commissioned, which would raise the country’s production capacity to 39 million tons“ he added.
Meanwhile, close to 764,000 tons of petrochemicals produced by Faravaresh Petrochemical Company were exported during March 21-July 22.
The products were exported to Saudi Arabia, Singapore, India, Spain, Taiwan, the Netherlands, Belgium, Indonesia, Malaysia, Qatar, Japan, China, South Korea and France.
Faravaresh Petrochemical Company, which is affiliated to Bandar Imam Petrochemical Complex, was established with the aim of producing aromatic products, olefin, polyolefin and other petrochemicals.

Iran started the construction of a permanent trade center in the Azerbaijan Republic on Monday.
Head of Iran’s Chamber of Commerce, Industries and Mines Mohammad Nahavandian said establishment of the center is an important step in the expansion of bilateral trade ties, IRIB wrote.
“It will be an appropriate opportunity for introducing our respective industrial and trade capabilities,“ he added.
During his two-day visit to Azerbaijan, Nahavandian will also meet with the country’s Economic Development Minister Shahin Mustafayev.
Nahavandian is scheduled to attend the joint commission of Iran and Azerbaijan businesspeople.
Trade volume between Iran and Azerbaijan is about $800 million. Given their potentials in various sectors, the two countries aim to boost the figure.

Leading carmaker Iran Khodro Company (IKCO) exported over 8,500 passenger cars during March 21-July 22, showing a 100-percent increase compared to the figure for the same period of last year.
The Customs Administration has confirmed the data on IKCO car exports during March 21-July 22, IRNA reported on Monday.
Directors of exports and public relations at Customs Administration held a session with IKCO’s director for exports to remove the discrepancies in export documents.
Peugeot 206, Peugeot Pars, Peugeot 405, Peugeot Roa, and Samand sedans were the company’s export-bound cars sent to Iraq, Armenia, Uzbekistan, Turkmenistan, Syria and Afghanistan.
IKCO, founded in 1962, is the largest auto manufacturer in the Middle East, Central Asia and North Africa. IKCO has an average share of 65 percent of domestic market.

In the first three months of 2009, the number of Iranian cellular subscribers grew by an estimated 22.6 percent to reach 35.049 million; which helped to increase mobile penetration to 49.4 percent.
According to the Business Monitor International (BMI), much of the growth can be attributed to the continued expansion of MTN Irancell, which is owned by South Africa’s MTN Group.
MTN Irancell ended 2007-08 with an even larger mobile customer base than Iranian officials had predicted (6.006 million). Furthermore, in Q1 2009, MTN Irancell’s customer base expanded by over 50 percent to reach 9.025 million at the end of March. This allowed MTN Irancell to raise its market share to almost 28 percent, up from 21 percent in December 2007 and 6.4 percent in March 2008.

There is a lot of investment interest in IranŐs mobile phone market.

Due to the stronger than expected subscriber growth, the sector will grow by 60 percent in 2009, enabling penetration to rise to over 64 percent by the end of the year. Meanwhile, it was reported in May 2008 that Russian cellco MegaFon had declared its intention to bid for Iran’s fourth national mobile licence when it becomes available. However, this week it rejected the report.
Iran’s Ministry of ICT has suggested that, once issued, Iran’s new mobile licence will include access to the spectrum necessary to provide 3G services. The ministry has also said foreign operators will only be able to have a 49 percent stake in the new mobile operation and that Iranian companies will be able to participate in the tender in the form of a consortium.
There has been no real progress with plans to privatize Iranian fixed-line incumbent, TCI. In September 2007, the Ministry of ICT announced that 51 percent of TCI would be privatized before the end of the Iranian calendar year on 20 March 2008. As a forerunner to the sale of a controlling stake in TCI, a 5 percent stake in the operator was to float on the Tehran Stock Exchange before the end of December 2007. The floatation of this minority stake did not take place as planned, and in January 2008 it was reported that TCI would first have to be established as a fully-licensed telecoms service provider.
In April 2008, Iran Telecom Chairman Saber Feizi reported that the various companies which constitute Iran Telecom were interconnected in such a way as to make it impossible to separate them when the company is eventually offered for sale on the Stock Exchange. Feizi therefore stressed that Iran Telecom would be sold along with all its subsidiaries, including mobile business unit Mobile Communications Company of Iran (MCI).
Iran continues to sit at the bottom of the BMI Business Environment Rankings for the Middle East, although the country now sits in tenth rather than eleventh place, due to inclusion of Iraq in the latest set of figures.
Iran’s own score has fallen in the current update, and this is the result of the lower score which the country receives in the telecoms market category. The reduced score in the telecoms market category largely reflects the perceived impact of a number of recent moves by the Iranian authorities in favor of imposing stricter controls on the use of internet and mobile data services.
In addition to the increased competition, the launch of commercial operations could stimulate growth in Iran’s mobile data services market. At the end of January 2009, Etisalat stated that it planned to offer HSDPA-based services from the outset of its commercial launch in H2 2009. Etisalat, however, failed to secure the right to be Iran’s exclusive 3G operator for two years. Iran’s government has still to unveil a schedule for issuing 3G licences to the country’s other wireless operators.
The two national operators, Mobile Company of Iran (MCI) and MTN Irancell both offer GPRS-based data services. Meanwhile, Taliya, which is gradually increasing the reach of its network, already offers WAP-based data services and, in January 2009, announced plans to begin testing GPRS.
Unsurprisingly, there is a lot of investment interest in Iran’s mobile market. The biggest upcoming opportunities to invest in the market will be the auctioning of a new national mobile licence, which will possibly include Iran’s first 3G concession, and the selling of a stake in the state-owned incumbent fixed-line operator TCI, which also owns MCI and the leading internet services provider DCI.
Both of these sales were originally supposed to take place during 2008. Numerous delays have taken place, and no official date has been given for either. Both, however, are expected to take place this year.

Crude prices are unlikely to fall below $50 per barrel in 2006, the Center for Global Energy Studies (CGES) said on Tuesday in its latest monthly oil report.
The report forecasts that prices may continue to hover over $60 per barrel, until at least the second quarter of 2006. Investment banks predict oil prices may top $75 by the end of 2009, UPI wrote.
“Unless both upstream and downstream capacity constraints ease, global economic growth slows dramatically, or tensions in oil producing countries ease, there is little prospect of oil prices falling far either this year or next,“ the London-based CGES reported.
“Oil prices are being kept high by a combination of ongoing demand growth, tight upstream and refining spare capacity, and fears of disruption.“
Although OPEC production capacity is slowly increasing with the commissioning of new fields in Iran, Nigeria and North Africa, non-OPEC producers are offsetting total global production with their underperformance this year.
Russian production stagnated in the first half of 2005 causing a slowdown. Industry experts expected non-OPEC output to grow by only 400,000 bpd in 2005.
Deutsche Bundesbank, Germany’s central bank, said in its August report that rising oil prices are a major risk to the global economy. If Iran reduces its crude exports, prices could soar and may fuel inflation in oil importing countries, so as to threaten global economic growth.
Although industry experts produce different short-term and long-term forecasts for the global oil market, all analysts can agree that prices will move upward.

United Arab Shipping Company plans to boost its regional presence and resume services to Saudi Arabia, the UAE and Iran, as shippers reconfigure routes to target pockets of demand amid the economic downturn.
UASC, based in Dubai and owned collectively by six Persian Gulf countries, will reinstate its AEC2 service, covering the Asia to Europe trade lane, which was suspended last December, The National reported.
UASC’s moves come in time for the third quarter, when shippers typically enjoy a rise in global demand from retailers preparing for the Christmas shopping season, as well as a regional boost from Ramadan.
The company said it was making the changes to offer faster services on some of its better routes.
“UASC and other liner shipping companies will continuously update services to optimize their routes and offer competitive transit times-- especially on more active routes,“ a company spokesperson said.
The shipping industry is feeling the pinch of the downturn with falling orders to transport resources and automobiles, with rates down more than 50 percent from their peak one year ago.
Last week, Star Bulk Carriers, a Greek shipping line, reported a second-quarter loss of $3.4 million after revenues declined by 45 percent to $32.4 million. Star Bulk operated 12 vessels and earned an average rate of $30,000 a day for time-charters, down from $46,000 last year.
The resumption of the UASC line will include a stop in Jeddah in Saudi Arabia and Khor Fakkan on the East Coast of Sharjah as it travels from China to the Netherlands, including stop-offs in Singapore, Malaysia, Egypt, France, Belgium and Germany. The line will employ nine UASC vessels, each capable of handling 6,900 standard 20-foot containers (TEUs).
In addition, the container shipper will introduce a number of Persian Gulf ports on another service, its AEC1 line. Direct calls will be included to the Saudi Arabia’s port cities of Jubail and Damman in the Persian Gulf as well as Bandar Abbas in Iran, UASC said.
The new services cap a busy period for UASC as it has sought to find the right balance in its global network. It recently announced plans to launch an Indian subcontinent to Northern Europe route next month, serving ports in Pakistan, India, Italy, England, Germany and Belgium.

By Sadeq Dehqan

Last year, the highest volume of non-oil exports pertained to export of minerals. It seems that this trend will repeat itself this year.
Many observers maintain that the government’s policy should be navigated toward processing mineral resources and producing the final product inside the country. This is while investments for exploiting mineral resources have increased significantly in the current Iranian year (started March 21).
However, experts believe that the government should also pay attention to investments for indigenization of the technology for processing mineral products. In 2008-2009, Iran exported some 18 million tons of minerals worth $4.7 billion. In the same time span, the value of exports of industrial and mineral products reached $15.294 billion, which marked a 24.9-percent increase compared to 2007-2008. In the first quarter of 2009-2010, Iran exported close to 5.6 million tons of mineral products worth over $1.2 billion.
A member of the Majlis Industrial Commission, Bahman Mohammadyari, said the government should replace export of raw minerals with processing the minerals so that the country would gain a value added.
He recalled that when the country possesses the necessary production knowhow, exporting raw materials is not economically feasible.
“The policy of exporting raw materials does not seem to be correct. The norm is that the price of raw minerals is very low and exporting raw minerals does not yield suitable profit. Hence, for making good profit on producing mineral products we should establish the related knowhow. Processing raw materials inside the country can ensure the independence of the country,“ he noted.
The parliamentarian also said, “Currently, the country has reached the level that it has access to the technical knowledge for producing many mineral products. For example, in the steel sector we have the capability for processing from the exploitation to the rolling levels and there is no need for exporting raw minerals needed in steel industry. By producing the final product, we can earn more revenues than exporting raw materials.“
Mohammadyari recalled that the value added for some mineral resources is at times 200 percent more than raw minerals.
Head of the House of Industry and Mine Hadi Ghanimifard was also of the opinion that exporting raw minerals is not to the benefit of the country.
“In exploiting mineral resources, the more we approach final processing the more our revenues will be. By exporting decorative stones as raw materials we make low profit while by processing and cutting them we can make a great deal of higher profit,“ he noted.
He went on to note, “Of course it can neither be stated that eliminating export of mineral resources is a correct policy nor can it be said all mineral resources should be processed inside the country. We should actually form a balance through a sound managerial system.“
Ghanimifard also said factories for production of mineral products should be established in the country in addition to making investments for exploiting mineral resources.
“Iran has rich mineral resources and reserves which are of paramount importance for many other countries,“ he said.
Investments in the mineral sector in the first quarter of the present Iranian year increased by 75 percent compared to the corresponding period of the last year. In this period, some 132 permits for exploiting mines were issued with related investments amounting to 957,522 million rials. Moreover, Iran’s Mines and Mineral Industries Development and Renovation Organization (IMIDRO) announced that in the same time span it issued 410 permits for exploring mines, marking a 32-percent increase compared to the corresponding period of the last year.
Another member of the Majlis industrial Commission, Mohammad Yari, said Iran should utilize the comparative advantage it has in the mineral sector more effectively.
“A correct managerial mode of operation should be devised for exploiting mineral resources so that we do not lose them easily. It is possible that at one point of time we need these resources for domestic consumption in the industrial sector,“ he noted. Based on official statistics, some 5,240 mines have exploitation permits and they hold 237 million tons of mineral reserves.

The first specialized exhibition of wood, paper, and related industries opened on Monday in Tehran International Permanent Fairground which was attended by deputy industry and mines minister.
According to IRIB, close to 70 domestic and three foreign companies from Germany, China, and the United Arab Emirates have taken part in the fair.
The goal of the organizers of the exhibition is to foment interaction and direct contact between manufacturers and customers.
The span of the expo includes wood, chipboard, MDF, machinery, paper and cardboard. The exhibition will end on Thursday.
Also, the Sixth Exhibition of Agricultural Equipment and the Fourth International Exhibition of Animal Husbandry and Fishery are underway in Hamedan international fairground.
IRNA reported that 120 domestic producers and representatives from the UK, Germany, Denmark, Switzerland, France, the US and Brazil have taken part in the four-day event.