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Polysilicon: production capacity concentration market differentiation

Recently, Daquan new energy company announced that it has signed a two-year polysilicon supply agreement with Jingke energy. According to the agreement, Daquan new energy will supply 12000 ~ 14400 tons of polysilicon and 15600 ~ 21600 tons of polysilicon to Jingke energy in 2020 and 2021 respectively. The price will be determined on a monthly basis according to the market price.

In addition, in August this year, Daquan signed a three-year single crystal high-purity silicon material supply contract with Longji. The polycrystalline silicon supply order of Daquan new energy from 2020 to 2022 has reached at least 140400 tons. The demand of the two customers basically matches the expected capacity of Daquan in 2020. According to the recent quotation of the open platform, the price of polysilicon material is 59-63 yuan / kg, and that of single crystal material is 73-76 yuan / kg. Based on this calculation, it is estimated that the total order of the two major customers will exceed 10 billion yuan in the next three years.

Increase production capacity

According to the data of silicon branch of China Nonferrous Metals Industry Association, from July to August, there were 10 domestic polysilicon enterprises with a production capacity of 10000 tons, among which the operating rate of one remained below 30%. In July, the output of 10 10000 ton enterprises was 27700 tons, accounting for 95.3% of the total domestic output. According to the order of output, in July, the monthly output of six enterprises is more than 1000 tons, which are Yongxiang Co., Ltd., poly-gcl, Xinte energy, Oriental hope, Xinjiang Daquan and Asia silicon industry. The output of the first six enterprises is 24600 tons, accounting for 84.4% of the total domestic output in July. In August, the output of 10 ten thousand ton enterprises was 29100 tons, accounting for 96.4% of the total domestic output, while the output of the other five ten thousand ton enterprises accounted for only 3.6%. According to the order of output, in August, there were 7 enterprises with monthly output of more than 1000 tons, which were poly-gcl, Yongxiang Co., Ltd., Xinte energy, Xinjiang Daquan, Oriental hope, Asia silicon industry and Inner Mongolia Dongli. The output of the first 7 enterprises totaled 27200 tons, accounting for 90.1% of the total domestic output in August. The concentration of ten thousand ton enterprises has been further improved, mainly due to the steady increase of new production capacity and output of ten thousand ton enterprises, and the impact of individual maintenance of enterprises below ten thousand ton, resulting in a new high concentration of ten thousand ton enterprises in July August. In this situation, Xinjiang Daquan ushered in a new contract, which attracted great attention of the industry. "With the completion and operation of Daquan's polysilicon production base in Xinjiang by the end of the year, Daquan's polysilicon production capacity will reach 70000 tons, and Daquan will meet the needs of global customers and rapid development of photovoltaic industry," said the chief marketing officer of Daquan new energy Combined with public reports, in December last year, Daquan completed the 3B project ahead of schedule, which increased Daquan's production capacity to 30000 tons. In February this year, Daquan was approved by the Bank of China and will receive a loan of 450 million yuan. Specifically, the Bank of China will provide a five-year fixed asset loan worth 400 million yuan. Daquan new energy plans to use the loan to further expand the production capacity of polysilicon production base in Xinjiang. In addition, Bank of China will provide a working capital loan of 50 million yuan to support Daquan's daily operation. At present, the company is committed to 4A project, which can further increase the production capacity to 70000 tons. It can be predicted that the production capacity of Daquan new energy company will further change the pattern of polysilicon industry in China. However, according to the public information of the enterprise, the production capacity of the polysilicon link in the upstream of the supply chain this year has increased by 120000 tons / year. This will lead to the weakening of demand in the terminal market. Under this influence, the increase of polysilicon production capacity will be affected, so it is necessary to face the downstream demand pressure directly. According to the second quarter financial report of Daquan company, the production cost of polysilicon is 7.42 USD / kg ~ 8.12 USD / kg, which is superior to other enterprises.

Consideration transfer

Recently, GCL poly announced that the shareholders of the company voted 99.99% to approve the transfer of 31.5% equity of Xinjiang GCL new energy material technology Co., Ltd. (hereinafter referred to as "Xinjiang GCL") to its subsidiary, Jiangsu Zhongneng Silicon Technology Development Co., Ltd. (hereinafter referred to as "Jiangsu Zhongneng"), to Xuzhou Zhongping GCL industrial upgrading equity investment fund (hereinafter referred to as "Xuzhou Industrial Fund"). The transaction consideration is RMB 2.49 billion (the same below), and the funds will be used to repay the company's debts and general operation. As a major polysilicon project, Xinjiang GCL has a capacity of 60000 tons in the first phase and a total investment of 5.998 billion yuan. It was put into construction in 2017. Last year, the first phase was put into operation. In the future, it will move forward to the total capacity goal through further expansion.

Founded in December 2016, Xinjiang GCL is an indirect non wholly owned subsidiary of GCL poly energy, mainly engaged in the production and sale of polysilicon products. Prior to this transaction, tianyancha information shows that Jiangsu Zhongneng and Zhonghuan shares respectively hold 70% and 30% of the issued share capital of Xinjiang GCL. According to this calculation, after the completion of the sale, the equity of Xinjiang GCL held by Jiangsu Zhongneng will be diluted from 70% to 38.5%.

It is reported that after the completion of the transaction, the company will obtain a one-time sale income of 1.6 billion yuan and a net cash inflow of 1.14 billion yuan, which is conducive to greatly improving the profitability and liquidity of the company, reducing the asset liability ratio of photovoltaic materials business, and helping the business achieve transformation and upgrading. After the new buyer entered, the equity of Xinjiang GCL came from Zhonghuan Co., Ltd., Xuzhou Industrial Fund and Jiangsu Zhongneng Co., Ltd., with a share ratio of 30%, 31.5% and 38.5%. Jiangsu Zhongneng is the majority shareholder of Xuzhou Industrial Fund Accounting for 40% of the shares, so Jiangsu Zhongneng will directly and indirectly hold more than 51% of the equity of Xinjiang GCL, which is still the controlling shareholder of the latter. For Xinjiang project, GCL's team is still in charge of the company's technology research and development and operation management.


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