China Sunergy inks deal with Japanese ingot maker

Nanjing, China-based China Sunergy (Nasdaq: CSUN) said it signed a contract to buy single-crystal silicon ingots from Hitachi High-Technologies (TYO: 8036) for the production of solar cells.

Japan-based Hitachi and one of its affiliates plan to supply Sunergy with 1,472 tons of eight-inch silicon ingots through the end of 2011. Shipments started last month.

The ingots are expected to produce 210 megawatts of solar cells.

Financial terms were not disclosed.

The contract calls for a fixed price through 2008 and a range of prices for the duration of the contract. The companies plan to negotiate the exact silicon-ingot price every three months beginning next year.

"This ... allows us to reduce our reliance on obtaining silicon material supplies from the volatile spot market," China Sunergy CEO Allen Wang said in a release.

Spot prices for silicon recently reached an all-time high of $400 per kilogram but are projected to decrease in 2009, according to a research firm ResearchInChina (see China solar industry faces rising silicon costs). 

China Sunergy signed a deal in October 2007 to supply 30 MW of solar cells to aleo solar, a German solar module manufacturer, for 2008, with an option to extend (see China Sunergy, aleo solar in supply deal). 

Hitachi High-Technologies reported yesterday that its net income for the six months ended Sept. 30 were down nearly 49 percent from the period a year ago.