Longji shares again signed a large purchase order to ensure a stable supply of photovoltaic glass

On the evening of August 9th, LONGi issued an announcement that its wholly-owned subsidiary, Longi Loyeh Photovoltaic Technology Co., Ltd. The subsidiary Xinyi Solar (Hong Kong) Co., Ltd. (hereinafter referred to as Xinyi Solar (Hong Kong)) signed a long-term procurement framework agreement for photovoltaic glass.

The contract stipulates that from September 2021 to December 2024, Longi Loye County will purchase photovoltaic glass from Xinyi Solar (Hong Kong) not less than 35% of Longi Loye’s estimated annual demand. The specific order price is discussed on a monthly basis, and the actual contract quantity and total amount are subject to the final transaction order.

According to the disclosure, the first validity period of the agreement is from September 1, 2021 to December 31, 2024. Starting in 2022, the two parties will negotiate in the fourth quarter of each year whether to update the content of the agreement and extend the validity period for one year, that is, to maintain the rolling agreement for three years. If the two parties fail to reach an agreement, the terms of the agreement will be automatically extended for one year and then terminated.

The reporter noted that Xinyi Solar (Hong Kong), the counterparty of this transaction, is a wholly-owned subsidiary of Xinyi Solar (0968.HK). As one of the important suppliers of Longi Leye Photovoltaic Glass, Longi Leye County has established a long-term strategic cooperative relationship with Xinyi Solar.

According to data, Xinyi Solar was established in January 2011 and is one of the world’s largest manufacturers of solar photovoltaic glass. At present, Xinyi Solar has two solar photovoltaic glass production bases, located in Wuhu and Tianjin respectively, and has a solar photovoltaic glass production line with a total daily melting capacity of 2,000 tons. The main products include ultra-white patterned glass (original and tempered), AR photovoltaic glass, back glass, TCO glass, etc.

Ensure a stable supply of photovoltaic glass

At present, Longi has become the world’s largest manufacturer of solar monocrystalline silicon photovoltaic products.

Before signing the purchase order with Xinyi Solar this time, Longji shares disclosed in April 2021 that in order to ensure the long-term stable supply of photovoltaic glass, the company’s 10 wholly-owned subsidiaries and Bengbu Deli Solar Materials Co., Ltd. (below Deli Solar) has signed a five-year photovoltaic glass procurement agreement, and plans to purchase no less than 250 million square meters of photovoltaic glass from Deli Solar from 2022 to 2026.

In the second half of 2020, the imbalance between supply and demand caused the price of photovoltaic glass to skyrocket. Especially in November last year, the domestic price of 3.2 mm photovoltaic glass rose from 29 yuan/m2 at the beginning of 2020 to 42 yuan/m2 on November 19 of that year, which was at a historical high.

But since the beginning of this year, with the expansion of market capacity, the price of photovoltaic glass has been lowered.

For the signing of the purchase agreement, Longi said that the newly signed long-term contract is an operating procurement framework contract. It is estimated that the number of contracts during the performance period will account for 35% of the company’s photovoltaic glass demand. Through stable supply and monthly price negotiations , Long-term purchase in batches is conducive to establishing long-term strategic partnerships with suppliers and ensuring the company’s long-term stable supply of photovoltaic glass.