(Yicai Global) Dec. 1 -- Daqo New Energy’s shares rose after the Chinese producer of solar panel materials said it had signed two more long-term polycrystalline silicon supply deals worth about CNY84.2 billion (USD11.9 billion) before taxes.

Daqo New Energy [SHA: 688303] closed 1.8 percent up at CNY53.95 (USD7.64) today, after earlier jumping by as much as 4 percent.

The firm’s plant in China’s Inner Mongolia Autonomous Region will provide 251,280 tons of polysilicon to China’s largest solar wafer maker Longi Green Energy Technology between next May and December 2027, Daqo said late yesterday. It also signed a deal to supply 27,600 tons of polysilicon to another client from next January to December 2027.

Prices will be determined on a monthly basis. But based on an average price of CNY302,00 (USD42,720) per ton for dense polysilicon, according to data PV InfoLink released on Nov. 24, the deals could be worth CNY75.9 billion and CNY8.3 billion (USD1.2 billion), respectively, Daqo added.

The Chongqing-based firm has secured eight long-term agreements to supply polycrystalline silicon since the middle of October, bringing the total expected revenue from the deals to CNY377.4 billion (USD53.4 billion) over the coming years.

Daqo, a major Chinese supplier of high-purity polysilicon, has invested to expand its production capacity in recent years due to strong demand and rising prices. The new deals secure long-term clients for its newly-built capacity.

The company’s net profit more than tripled to about CNY15.1 billion in the first three quarters from a year earlier, mainly because of surging polysilicon prices. But after years of short supply, China’s polysilicon market is changing.

Production capacity is expected to double to 1.2 million tons this year and double again to 2.4 million tons by 2023, according to the China Nonferrous Metals Industry Association’s silicon branch. Silicon output should reach 820,000 tons this year, a 2.5-fold increase on last year.

Editor: Futura Costaglione