Chinese polysilicon supplier Xinte Energy Co., Ltd. has secured a long term deal for 70,350 metric tons (MT) of polysilicon with Wuxi Shangji Automation Co., Ltd. under a strategic cooperation agreement signed. The total value of the contract, basis the current price of polysilicon as announced by market intelligence firm PV InfoLink, is expected to be RMB 6.05 billion ($933 million).
Xinte Energy said it has entered the contract through its subsidiary Xinjiang Xinte Crystal Silicon Hightech Co., Ltd.
Under the deal signed, Xinte Energy will complete the delivery between January 2021 and December 2025 with both Wuxi Shangji and its subsidiary Hongyuan New Material (Baotou) Co., Ltd. procuring polysilicon on a monthly basis as their respective needs. Price will be negotiated on a monthly basis as well.
Having suffered an annual decline of 99.26% in its net profits during H1/2020 due to drop in polysilicon prices and COVID-19 related disruptions, Xinte Energy believes this strategic agreement with Wuxi Shangji will facilitate stable sales of its polysilicon products in the group's ordinary course of business, while safeguarding daily operations of the group (see Chinese Polysilicon Producer's H1/2020 Profits Decline).
At the same time, the management asserted the order is in line with its development strategy and that it will further enhance the group's position in the new energy industry.
This is another big order for Xinte Energy after it agreed to supply 270,000 MT of polysilicon to LONGi Solar for over 5 years for a value of RMB 19.23 billion, replacing their July 2018 contract (see LONGi Contracts Xinte For 270,000 MT Polysilicon).
For PV equipment and mono-wafer manufacturer Wuxi Shangji, this is yet another big polysilicon contract it has signed up for in recent times. Late in 2020, a subsidiary of the company was reported to have placed an order for 16,700 MT of polysilicon with Jiangsu Zhongneng Silicon Technology Development Co., Ltd. and Xinjiang GCL New Energy Material Technology, and before that with Daqo New Energy for 21,600 tons to 32,000 tons of high purity polysilicon to be supplied till 2022 (see China PV News Snippets: Shangji, Cybrid, DZS Solar).
There are a lot of polysilicon being sold and procured in the market currently since this key material of solar cells is required by several module manufacturers to meet their capacity expansion requirements for high efficiency modules. However, a recent research by Bernreuter Research claimed that even though 2020 and 2021 will see supply constraints, there may be an oversupply of polysilicon in 2022 and 2023 if the rate of installations doesn't keep up pace with the expansions being announced (see Future Bright For Polysilicon Industry, Claims Research).
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