PV giant LONGi signed a large order for the purchase of $1 billion polysilicon

While warning of overcapacity, it continues to throw out huge expansion plans
.
On the evening of February 5, LONGi announced that the company signed a three-year polysilicon procurement contract with South Korea's OCI, with a contract price of more than
1 billion US dollars.

According to the announcement, the buyer of this transaction is LONGi and its subsidiaries Yinchuan Longji, Baoshan Longji, Lijiang Longji and Ningxia LONGi, and the seller is OCI and its subsidiary OCIM.

The subject matter of the contract is solar-grade polysilicon, and the total purchase quantity from March 2018 to February 2021 is 64,638 tons
.

As the counterparty, OCI is one of the world's major polysilicon suppliers, a South Korean listed company, and OCIM is a wholly owned subsidiary
of OCI.

LONGi said that it purchases orders on a monthly basis, and the order price is negotiated
monthly.
The total contract amount is ultimately determined based on the actual purchase quantity and unit price, and the estimated total contract value is about 1.
023 billion US dollars (international purchase price, excluding tax).

In terms of settlement, LONGi pays part of the advance payment to OCI according to the contract (which can be used to deduct the contract price), and it pays the seller the balance
of the contract price corresponding to the specific purchase order according to the time and conditions agreed by both parties according to the progress of the purchase.

LONGi said that the signing of this contract is in line with the company's future business plan and is conducive to ensuring the stable supply
of the company's polysilicon raw materials.

According to the official website, LONGi was founded in 2000 and listed in 2012, and has become the world's largest manufacturer
of monocrystalline silicon photovoltaic products.
In recent years, the photovoltaic industry has continued to boom, and major photovoltaic companies have set off a capacity race, and the war has spread throughout silicon wafers, formation, cells and other links
.

At present, the photovoltaic industry has set off a new round of capacity competition, and LONGi has also thrown out a series of investment plans, the largest of which is the recently announced three-year expansion plan
.

On the evening of January 19, LONGi released the development plan of monocrystalline silicon wafer business from 2018 to 2020, showing that on the basis of 15GW of wafer production capacity at the end of 2017, it will strive to reach 28GW by the end of 2018 and 45GW
by the end of 2020.

After the announcement of the above-mentioned three-year expansion plan, LONGi's expansion path still cannot be stopped
.

On February 5, LONGi also announced that according to the company's strategic planning adjustment and market needs, the second meeting of the third board of directors of the company in 2018 deliberated and passed the "Proposal on Expanding the Construction Scale of Investment Projects in India", and intends to expand the construction scale of this project to 1GW monocrystalline high-efficiency cells and 1GW module projects, with the total investment expected to be changed to about 1.
941 billion yuan
.

In the case of large-scale production capacity being put into operation, LONGi began to try to seize the market
by lowering prices.

Recently, the performance reported that LONGi shares lowered the price of monocrystalline silicon wafers, on February 4, the overall price of monocrystalline silicon wafers 156.
75mm*156.
75mm was reduced, and the adjusted price of 180μm monocrystalline silicon wafers was implemented at 4.
8 yuan / piece, and the price was reduced by 0.
4 yuan / piece, a decrease of 7.
7%.

The last time the company lowered the price of silicon wafers was during the New Year's Day, which was reduced by 0.
2 yuan per piece
.
According to media reports, the price reduction is true
.

Some institutions said that due to seasonal factors, the sluggish demand in the photovoltaic industry led to a sharp decline in silicon wafer prices, accelerating the clearing of inefficient production capacity, while LONGi reduced the price of silicon wafers and increased its market share by virtue of its cost advantage
.

However, for the industry, whether the photovoltaic market after the capacity race will repeat the mistakes of overcapacity and broken corporate capital chain a few years ago is still a question
in the minds of many people.

LONGi warned in another announcement tonight that with the rapid development of the photovoltaic industry, some small and medium-sized enterprises that were originally facing market elimination began to resume production, resulting in the elimination of excess capacity not in place; On the other hand, the backbone enterprises in the industry have also expanded their production capacity by virtue of their scale advantages, and the recovery of backward production capacity and new production capacity will intensify the disorderly competition in the industry, and the photovoltaic industry may again face the risk
of changes in the market environment caused by overcapacity.