JinkoSolar, JA Solar line up priority polysilicon supply through Xinte deal

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Raw polysilicon set for refining at a Xinte Energy facility. Image: Xinte Energy.

‘Solar Module Super League’ (SMSL) members JinkoSolar and JA Solar are to invest in polysilicon provider Xinte Energy’s 100,000 ton facility in Inner Mongolia, receiving priority access to the polysilicon produced as a result.

A filing issued to the Hong Kong Stock Exchange on Friday (18 June 2021) revealed the proposed deal, under which JinkoSolar and JA Solar would both invest in Xinte’s Inner Mongolia Xinte subsidiary, Inner Mongolia Xinte Silicon Materials, which is to house the new facility. Jinko and JA would both hold 9% equity stakes in Inner Mongolia Xinte as a result, each investing RMB315 million (US$48.7 million) in the project.

Under the terms of the prospective deal, which is subject to approval by Xinte’s board, both JinkoSolar and JA Solar would receive priority access to the polysilicon produced at the facility. This access would be related to a more definitive sales agreement to be signed by Inner Mongolia Xinte and the SMSL duo, with a supply framework set to be signed on 18 July 2021.

All polysilicon sold to investors would follow existing market pricing principles, however higher prices will not be set for connected parties, Xinte said.

JinkoSolar confirmed its investment would be made from its Shangrao JinkoSolar Industry Development subsidiary. Kangping Chen, CEO at JinkoSolar, said the company believed the investment was not only a solid growth strategy for the business but would help stabilise silicon supply and reduce supply chain volatility.

“By cooperating with upstream specialized manufacturers, we will continue to strengthen the advantages of our integrated capacity and solidify the foundation for mass production of high-efficiency modules year-over-year. We will continuously work towards win-win situations through deeper cooperation with our supply chain partners, and jointly promote the development of the global solar market and accelerate the transformation of green energy,” he said.

While polysilicon price increases have stabilised in recent weeks – staying at ~RMB206/kg (~US$31/kg) – concerns remain over the industry’s mid-term ability to meet demand for the raw material.

Last week Xinte unveiled plans to sell nearly 180 million shares, the significant majority of which are to be procured by existing main shareholder TBEA, in a bid to raise up to RMB2 billion to help accelerate development of the polysilicon production facility in Inner Mongolia.

Construction of the 100,000 ton facility is slated to start this quarter and take 18 months to complete.

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