Daqo New Vitality has signed a ‘Procurement Framework Contract’ with a buyer who will buy 432,000 tonnes of solar-grade high-purity polysilicon from the corporate and its subsidiary Daqo Inside Mongolia between 2023 to 2028.
Based on PV InfoLink’s newest information on the typical value of mono dense polysilicon, which places it at RMB303,000/MT (US$42,168, tax included), the estimated buying quantity of the deal can be about RMB130.896 billion (US$18.2 billion, tax included). Though, the businesses stated the calculated value doesn’t represent a value dedication.
On 25 October, the identical day as Daqo’s deal was introduced, TCL Zhonghuan introduced that its subsidiary Tianjin Huanrui had just lately signed a ‘Silicon Materials Procurement Framework Contract’ with a provider for a similar quantity of polysilicon over the identical timeframe.
The contract agreed that Tianjin Huanrui will buy 432,000 tonnes of solar-grade major polysilicon from a provider and its subsidiary from 2023 to 2028. The whole buying and selling quantity, nevertheless, shall be topic to the ultimate transaction and is anticipated to be about RMB63.1 billion (US$8.78 billion).
Though neither occasion has disclosed their companion, the procurement portions are each 432,000 tonnes in line with the bulletins, with the identical procurement time period as from 2023 to 2028. It might be cheap to deduce that Tianjin Huanrui is shopping for the polysilicon from Daqo.
Nevertheless, the most important distinction between the 2 bulletins is the buying quantity. The 2 sides have a big discrepancy by way of the anticipated transaction quantity for the 432,000 tons of polysilicon.
Daqo New Vitality, which has seen its income treble year-on-year following the excessive value of polysilicon, estimated that the buying quantity can be RMB130,896 billion in line with the newest common value of mono dense poly at RMB303,000/MT revealed by PV InfoLink.
TCL Zhonghuan made a prediction in line with PV InfoLink’s quote forecast in October on the worth of mono dense poly from 2022 to 2027. Calculated primarily based on the typical value of RMB146,000/MT, the buying quantity is about RMB63.072 billion.
| Firm | Polysilicon amount (10,000 tonnes) |
Estimated common value (RMB10,000/MT) |
Estimated buying quantity (RMB100 million) |
| Daqo | 43.2 | 30.3 | 1308.96 |
| TCL | 43.2 | 14.6 | 630.72 |
The 2 predicted quantities had a discrepancy of RMB67.824 billion primarily based on mono dense poly’s present common value and predicted common value for subsequent yr, with the previous twice as excessive because the latter. Business analysts identified that the events have totally different expectations, and the worth hole of silicon supplies can be additional diverged subsequent yr.
TCL Zhonghuan stated the contract is a long-term one which helps to make sure their uncooked materials provide by locking within the amount with out sealing the worth. Worth can be negotiated on a month-to-month foundation and purchases can be made in separated batches, which the corporate stated was conducive to making sure the soundness of the corporate’s provide chain and enhancing silicon wafer enterprise quantity.
On the one hand, high silicon wafer firms attempt to assure their provide with long-term orders. Then again, high silicon suppliers are additionally counting on long-term orders for his or her future planning. The trade has been anticipating decreased silicon costs shifting ahead as a load of recent capability is anticipated to return on-line in China in 2023, though demand can also be anticipated to rise.
We will see that along with the contract signed with TCL Zhonghuan, Daqo New Vitality additionally signed a long-term silicon order with Shuangliang Silicon Supplies and one other buyer this month. Based mostly on the estimated quote when the orders had been signed, the amount of the long-term orders throughout the month exceeded 630,000 tonnes, amounting to RMB191.95 billion.
Silicon materials provide has been tight because the starting of the yr. Though Chinese language producers and plenty of new gamers are increasing their capability, the cycle takes a comparatively lengthy time period as compared with different hyperlinks within the provide chain, so capability launch can be a gradual course of.
For that reason, some individuals maintain totally different views on the silicon value unfold, noting that though the capability is increasing, it won’t meet up with expectations within the quick time period, so the tight provide will nonetheless bolster the worth to some extent.
