Longi Green Energy Technology Co.Ltd(601012) ( Longi Green Energy Technology Co.Ltd(601012) , Longi Green Energy Technology Co.Ltd(601012) ) announced on March 21 that eight subsidiaries signed polysilicon material long order purchase agreements with four subsidiaries of Tongwei Co.Ltd(600438) . According to the agreement, the trading volume of polysilicon materials between the two sides from January 2022 to December 2023 is 203600 tons.
For example, according to the calculation of the average transaction price of 245300 yuan / ton of single crystal high-purity silicon published by the silicon branch of China Nonferrous Metals Industry Association on March 16, it is estimated that the total contract amount is about 44.2 billion yuan (excluding tax), and the total contract amount accounts for 107.42% of the audited operating cost of the company in 2020 (this calculation does not constitute a price commitment).
According to the contract, both parties negotiate the price of silicon material every month according to the market situation and the pricing principle agreed in the contract. In case of major business strategy adjustment of one party, the supply / purchase quantity can be adjusted appropriately after consensus by both parties, but the supply / purchase quantity of the other party shall be guaranteed first.
From the upstream to the midstream, the photovoltaic industry chain is divided into four links: silicon material, silicon wafer, battery wafer and module. Longi Green Energy Technology Co.Ltd(601012) and Tongwei Co.Ltd(600438) are the enterprises with the largest volume in different links. Among them, Longi Green Energy Technology Co.Ltd(601012) is the world's largest manufacturer of monocrystalline silicon chips and components, and Tongwei Co.Ltd(600438) is the world's largest enterprise of polycrystalline silicon materials and battery chips.
This complementary relationship between upstream and downstream leaders makes the two closely aligned: in September 2020, the two companies signed a strategic cooperation agreement. In terms of supply and demand cooperation of polysilicon materials, the two sides aim at the transaction volume of 101800 tons of polysilicon materials per year Longi Green Energy Technology Co.Ltd(601012) 's Silicon demand is preferentially purchased from Tongwei Co.Ltd(600438) and Tongwei Co.Ltd(600438) silicon supply is preferentially guaranteed Longi Green Energy Technology Co.Ltd(601012) . Before the new capacity of the silicon material project of the joint venture is put into operation, Tongwei Co.Ltd(600438) will give priority to meeting the procurement needs of Longi Green Energy Technology Co.Ltd(601012) polysilicon materials from 2020 to 2021.
At present, Tongwei Co.Ltd(600438) has an annual production capacity of 180000 tons of high-purity silicon. With 50000 tons of Baotou phase II and 100000 tons of Leshan planned to be put into operation in 2022, its silicon material production capacity will reach 330000 tons by the end of this year.
"Embracing silicon as the king" is the main tone of the photovoltaic industry in 2021. Under the tide of global carbon neutralization, the capacity of new energy development plans of various countries has been expanded, and China's photovoltaic industry chain, especially the silicon chip end, has expanded greatly. However, the production expansion cycle of silicon material link is long, and the large-scale silicon wafer production expansion has caused enterprises to worry about silicon material supply and sign long orders one after another. In the case of Limited margin, the price of silicon materials traded sporadically in the market soared, driving the price of silicon materials to rise month by month, and finally there was the highest price of silicon materials in the history of more than 270000 yuan / ton.
With the release of new silicon material production capacity, the price of silicon material, which is still high and strong, will gradually decline. However, some people in the industry worry that Longji's large-scale long single lock material may lead to a new round of material grabbing in the industry.
