Jinko Solar Ploughing Cash Into Polysilicon Producer

Solar panel manufacturer Jinko Solar has announced its intention to throw a bundle of bucks at a subsidiary of one of China’s polysilicon production giants.

Building on a strategic partnership announced early this year, Jinko said it would invest RMB450 million (around AUD $94.54 million at current exchange rates) for a stake in Sichuan Yongxiang Energy Technology Co., Ltd., which is a subsidiary of Tongwei Co., Ltd¹. Tongwei was the world’s largest polysilicon producer last year, with a total 96,000 MT production capacity for the increasingly sought after material used in the production of solar panels.

Jinko’s cash will go towards establishing a new high-purity polysilicon production line with an annual capacity of 100,000 tons. The line will be based in Leshan, Sichuan Province – the same city where Jinko has a wafer production facility. Not mentioned is when the new capacity is expected to be up and running.

In addition to the investment giving Jinko a 15% stake in Sichuan Yongxiang Energy Technology and pro- rata profits, the new line will supply nearly 30,000 tons of high-purity polysilicon to Jinko annually. And as one of the world’s largest manufacturers of solar panels, JinkoSolar will make good use of every kilogram of that supply.

“By securing this new line of clean, high-quality and highly reliable raw material, we will be able to guarantee the long-term reliability of our wafer and module production for the next few years,” said Jinko Solar CEO Kangpin Chen. “In addition, we have also realized that the healthy and sustainable development of the PV industry is increasingly dependent on the profound cooperation among supply chain partners.”

There will be a murmuring (or perhaps even shouting) of amens to Mr. Chen’s latter statement.

Polysilicon Price Update

Polysilicon prices have skyrocketed this year, from around USD $11/kg at the beginning of 2021² to $36.43/kg as at a couple of days ago. This is up around a dollar since I last looked at polysilicon prices in mid-October following a steep increase of 20% in just a week.

Polysilicon price/supply and other issues are resulting in a solar panel supply crunch in Australia and elsewhere; so news of any extra production capacity is particularly welcome at the moment.

Daqo Continuing To Profit Big Time

On a related note, last week another Chinese polysilicon major – Daqo New Energy – announced its unaudited financial results for the third quarter of 2021.

Daqo’s polysilicon production volume was 21,684 MT in Q3; a little higher than the 21,102 MT achieved in Q2. But its average selling price was $27.55/kg in Q3 (Q2: $20.81/kg, Q3 2020: $9.13/kg) and revenue was $585.8 million compared to $441.4 million in Q2 2021.

It’s an ill wind that blows nobody any good as they say.

As for the outlook, Daqo CEO Longgen Zhang says the prices of silicon powders it uses to manufacture polysilicon have stabilised in recent weeks and the company expects they will gradually normalize in the first half 2022.