(Yicai Global) Sept. 23 -- Shares of Shuangliang Eco Energy Systems jumped after the Chinese solar wafer maker said it had secured 135,000 tons of polysilicon materials through two long-term deals worth about CNY28.7 billion (USD4.4 billion), based on current market prices.

Shuangliang [SHA:600481] closed 4.7 percent higher today at CNY12.55 (USD1.94). The broader Shanghai market rose 0.4 percent.

A wholly-owned unit based in Baotu, Inner Mongolia Autonomous Region, will buy 82,200 tons and 52,800 tons of solar cell materials from Xinte Energy and GCL-Poly Energy Holdings’ unit Jiangsu Zhongneng Silicon Technology Development, respectively, Shuangliang said in a statement late yesterday.

The deals ensure the supply of raw materials to a project Shuangliang announced in March, when the Wuxi-based company said it would invest CNY7 billion (USD1.1 billion) to build a giant solar wafer plant to meet rising demand. The project will be carried out in two phases and it will be fully operational by 2023, bringing in annual revenue of CNY10.8 billion (USD1.7 billion).

The building of new solar power plants has stimulated demand for raw materials throughout the industry chain, prompting companies to actively expand their production capacity and ink long-term contracts with suppliers.

Prices will be determined by the parties through monthly bargaining, Shuangliang said. According to current market prices, the contracts with Xinte Energy and Jiangsu Zhongneng are worth CNY17.5 billion and CNY11.2 billion, respectively, it noted.

Shares of silicon chip supplier Xinte Energy [HKG:1799] also gained today, adding 6.9 percent to HKD22.35 (USD2.87) each.

Editor: Futura Costaglione