curseofthewerewolfmegaways| Optimistic about the long-term positive trend of the photovoltaic industry Tongwei and LONGi Green Energy sign another "long order"

On the evening of May tenthCurseofthewerewolfmegawaysAccording to a notice issued by Tongwei shares, six subsidiaries of the company recently signed sales contracts for high purity silicon products with Longji Green Energy and its nine subsidiaries, agreeing that from 2024 to 2026, Longji Green Energy and its subsidiaries will purchase a total of not less than 86%.Curseofthewerewolfmegaways. 240000 tons of high purity silicon products, the purchase price is determined through monthly negotiation, and the total contract transaction amount is subject to the final transaction amount.

Based on the domestic average transaction price of 45300 yuan / ton announced by the Silicon Branch of China Nonferrous Metals Industry Association (May 8, 2024), the total amount of this contract is expected to be about 39.1 billion yuan (including tax).

"in the context of cyclical fluctuations in silicon prices, intensified competition and continuous pressure on some parts of the industrial chain, the contract between the two photovoltaic leaders has undoubtedly encouraged the market." Wanlian Securities Investment consultant qu Fang said in an interview with a reporter from the Securities Daily.

The two leaders re-sign the "long order" to seek win-win results.

As early as 2022, Tongwei shares and Longji Green Energy signed a long-term purchase agreement on polysilicon materials jointly with Guan Xuan. At that time, the two sides agreed to trade 203600 tons of polysilicon materials in 2022 and 2023, which aroused widespread market concern. This time, the two sides once again signed a large-scale "long order" for the purchase of high purity silicon.

"the Tongwei shares, Longji Green can re-sign high-purity crystal silicon procurement 'long order', reflecting the recognition of the two photovoltaic bibcock to each other. On the one hand, Longji Green Energy has achieved new breakthroughs in BC cells and other fields in recent years, and has more demand for raw materials. It further supports the development of related business of crystalline silicon photovoltaic cells by purchasing silicon materials in large quantities. On the other hand, Tongwei shares has a dominant position in the field of silicon materials, and it is also actively establishing and improving its upstream and downstream business. Such cooperation is a win-win move for both sides. " Qianmen assets investment research director Xuan Jiyou told the Securities Daily.

As the double leader of "silicon material + battery" in the photovoltaic industry, Tongwei shares have continued to promote the construction of high-purity crystal silicon production capacity in recent years. Yunnan Phase II 200000 tons and Baotou Phase III 200000 tons of high-purity crystal silicon projects will be put into production as scheduled in 2024. Based on the company's "eighth Generation Yongxiang Law", it is expected that the new project will achieve better quality after it is put into production and continue to consolidate the company's competitiveness in the high-purity crystal silicon link.

For the re-signing of the "long order" of high-purity crystal silicon supply with Longji Green Energy, Tongwei shares said: "the signing of this contract is conducive to the stable sales of the company's high-purity crystal silicon products and is in line with the company's future business plan." it has a positive impact on the company's business performance. "

The person in charge of Longji Green Energy told the Securities Daily that although there is a phased imbalance between supply and demand in the industry due to capacity expansion, the long-term positive trend of the photovoltaic industry has not changed. The company's signing of a large silicon order is also based on a comprehensive judgment of factors such as the future market and the competitiveness of the company's products.

Industry concentration may rise further

According to the latest silicon price released by the Silicon Branch of China Nonferrous Metals Industry Association on May 8, the transaction price of N-bar silicon ranges from 43000 yuan / ton to 48000 yuan / ton, with an average transaction price of 45300 yuan / ton, down 7.93 percent from the previous month. The transaction price of P-type compact material ranges from 38000 yuan / ton to 43000 yuan / ton, and the average transaction price is 39000 yuan / ton, down 8.88% from the previous month.

Judging from the current situation, the current silicon price not only falls below the cost of the second and third-tier enterprises, but also approaches the cost of the head enterprise.

In qu Fang's view, with the deepening of the capacity removal of the photovoltaic industry chain, second-and third-tier enterprises will choose to reduce production and withdraw from the market because they cannot bear the market price lower than the cost, while the leading enterprises will reserve the future means of production at lower costs. the market enters the final stage of the game.

Xuan Jiyou also said that the clearance of P-type battery inventory may be coming to an end, and the photovoltaic industry as a whole has entered a critical period of iterative update, and enterprises with brand and scale advantages may be in a favorable position.

"in the future, the concentration of the photovoltaic industry may further rise, and the market position of the head enterprise will be more solid." Qu Fang said.

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