Hungry for Polysilicon, Shangji Signs a Three-Year Procurement Deal with Daqo

published: 2021-03-26 9:30 | editor: | category: News

The major suppliers of silicon wafers that are used to make PV cells have continued with their plans to build and upgrade production lines. This development is in response to the changing trends in the wafer market, where demand is growing for mono-Si and large-size products. On March 5, wafer supplier Wuxi Shangji Automation announced that its subsidiary Hongyuan New Materials has entered into an agreement to purchase polysilicon from Daqo New Energy. Both Shangji and Daqo are based in China. The former is regarded as a new entrant in the wafer sector of the PV supply chain, while the latter is among the world’s leading polysilicon suppliers.

According to the deal, Daqo will provide Shangji with mono-grade polysilicon in a total quantity of 52,700MT between July 2021 and June 2024. Like most other long-term agreements in the polysilicon market, this three-year contract allows the price to be negotiated on a monthly basis.

At a meeting that was held on March 5, the board of directors at Shangji passed a special motion on making major procurement deals for ensuring the continuing operation of the company. The motion was not submitted to a shareholder meeting for review.

Shangji established a mono-Si wafer business in 2019, and since then it has been steadily expanding its production capacity and raising its demand for raw materials. From last year to the present, Shangji has also made similar long-term agreements with two other Chinese polysilicon suppliers, namely Xinte Energy and GCL-Poly. Altogether, Shangji has procured around 160,000-170,000MT of high-purity polysilicon from the three suppliers.

Also, Shangji and a subsidiary of GCL-Poly made another agreement to jointly build a polysilicon plant in Inner Mongolia. The equity stakes of Shangji and GCL-Poly in the joint venture are projected at 35% and 65% respectively. The plant is designed to have a production capacity of 300,000MT for granular polysilicon. It is also worth pointing out that the joint-venture deal was signed on March 1, just a few days before Shangji entered into a long-term procurement contract with Daqo.

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