Hoku Recovers From Shipment Delay

HONOLULU (TheStreet) -- Solar raw material provider Hoku Scientific (HOKU) was down close to 2% in the pre-market session on Thursday morning after it said an amended agreement with Shanghai Alex New Energy would delay the first shipment of polysilicon to the third quarter of 2010, from the first quarter.

Trading in Hoku shares has proven extremely sensitive to any news, both positive and negative, like many thinly traded stocks in the solar sector. Still, the pre-market drop was quickly erased at the opening bell, and Hoku shares were flat by late morning Thursday.

When Solarfun Holdings(SOLF) recently said it would stick to its scheduled payments to Hoku to fund its polysilicon plant construction, Hoku shares shot up by more than 20% in one day.

News of a delayed shipment to a Hoku client will not help to ease any ongoing concerns from the market about oversupply in the solar industry. However, Hoku is still in the process of building its poly plant in Idaho.

Hoku tried to strike a positive note in its announcement about the delayed shipment: "Hoku was prepared to ship third-party product in accordance with our contract, but the updated schedule more closely matches Alex's revised supply chain forecasts while still conforming nicely to our projected production ramp. This amendment adjusts the timing of our first delivery to Alex to a date that is amenable to both companies," said CEO Dustin Shindo.

In March, Hoku Materials entered into an deal with Chinese solar cell maker Alex to sell polysilicon over a 10-year period beginning early 2010.

-- Reported by Eric Rosenbaum in New York.

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