SMM News: financial subsidies for new energy vehicles have retreated sharply, and increased competition in the industry has brought about the pressure of profitability on the whole industrial chain. Especially with the deep reshuffle of the industry, low-end enterprises and production capacity are out one after another, the profit of the upstream link of power battery is also facing the trend of declining or slowing down.
From the point of view of the profitability of each link of the new energy vehicle and power battery industry chain, the upstream raw materials and positive materials with high gross profit margin are not as good as those of a few years ago. Affected by the continuous decline of cobalt prices, the net profits of cold sharp cobalt industry, Dow technology, Xiamen tungsten industry and other companies in the first half of 2019 showed varying degrees of loss; Guanghua science and technology, Ganfeng lithium industry and other enterprises also showed varying degrees of decline.
At present, a number of domestic companies related to the lithium power industry have announced their financial results for the first half of 2019. As can be seen from the financial reports, "it is difficult to make money" has almost become a common problem in the whole industry. In the near future, the editor will comb out the upstream raw materials, positive materials, negative materials, electrolyte and diaphragm, lithium electrical equipment, power batteries and other major listed companies in the industrial chain, in order to explore the overall development trend of the industry.
The fall in cobalt prices has caused many enterprises to complain
Financial subsidies for new energy vehicles linked to energy density, as well as consumers' real demand for mileage, have led to the upsurge of high nickel battery technology route. Low cobalt and no cobalt are considered to be an important trend in the development of power battery technology route. To a certain extent, cobalt has cooled down in the past two years, cobalt prices continue to fall, but also make cobalt-related listed companies feel uncomfortable.
The cold cobalt industry is expected to lose 60 million yuan to 65 million yuan in the first half of this year, compared with a profit of 590 million yuan in the same period last year. Cold sharp Cobalt said cobalt prices have continued to fall since the fourth quarter of 2018, resulting in a loss of inventory prices and lower sales prices of cobalt products, reducing the company's profitability.
Also dragged down by the fall in cobalt prices are Dow Technology and the tungsten industry in Xiamen.
Dow expects a total loss of 60 million yuan to 65 million yuan from January to June this year. The company made a profit of 141 million yuan in the same period last year. Dow said the low price of cobalt products in the first half of this year had an impact on the company's current profits.
Xiamen tungsten industry expects a net loss of 43.2269 million yuan for lithium power materials in the first half of this year, down 143.70 percent from the same period last year. Xiamen tungsten industry said that although the production and sales of lithium power materials continued to grow in the first half of this year, profits fell during the reporting period as the price of cobalt raw materials continued to fall. In the first half of 2019, the business income of the company's new energy battery materials (including hydrogen storage alloys and lithium electrical materials) was 3.403 billion yuan, an increase of 15.90 percent over the same period last year, and a net profit loss of 43.2269 million yuan.
It is worth noting that the sharp decline in the net profit of the lithium battery materials business has also dragged down the overall performance of the tungsten industry in Xiamen. It is reported that Xiamen tungsten industry in addition to lithium electrical materials business, but also engaged in tungsten and molybdenum, rare earths, real estate and other businesses. Affected by the loss of lithium electrical materials business, the total profit of Xiamen tungsten industry in the first half of 2019 was only 77.4066 million yuan, down from 334 million yuan in the same period last year.
Although the overall market environment is not very good, but not all of them are losing money. Ganfeng lithium industry, Guanghua technology and other lithium mines, lithium salt enterprises in the first half of the net profit still maintained growth, but the extent slowed down. Ganfeng lithium industry is expected to make a profit of 293 million yuan to 460 million yuan in the first half of this year, but down 45% to 65% from 837 million yuan in the same period last year.
Sinorama said in an announcement a few days ago that it expects to make a profit of 17.682 million yuan to 44.2051 million yuan in the first half of this year, down 50 percent to 80 percent from the same period last year. Guanghua Technology said that the company's battery cathode material production, lithium concentrate processing and other new projects gradually began trial production in the first half of this year, but will have to wait until the second half of this year to achieve benefits, so the overall operating costs of the company increased. In addition, cobalt prices were basically at historic lows in the first half of this year, leading to a decline in profit margins for the company's cobalt salt products.
There is an obvious differentiation in profitability of positive material companies.
At present, due to the rapid rise of the new energy passenger car market, the demand for ternary power batteries is growing rapidly, and then the demand for ternary cathode materials in the upper reaches is also rising. On the other hand, affected by the continuous decline in cobalt prices, the cost of ternary cathode materials is also estimated to have declined. For enterprises with production capacity and technical advantages, there is no doubt about profit growth. Dangsheng Technology, which focuses on ternary cathode materials, announced a few days ago that the increase in sales of lithium cathode materials in the first half of this year led to a year-on-year increase in profits, and the company's net profit is expected to reach 140 million yuan to 155 million yuan in the first half of this year, an increase of 24.10 percent to 37.40 percent over the same period last year.
Also due to the decline in raw material prices, the gross profit margin of products increased profit is also German Nano. German Nano said recently that the company is expected to make a profit of 44.62 million yuan to 51 million yuan in the first half of this year, an increase of 40 percent to 60 percent over the same period last year. It is worth noting that the main product of German nanometer is nanometer iron lithium iron phosphate.
However, the price of raw materials of lithium iron phosphate has also dropped, but Anda Technology has exposed the news that it will lose 57 million yuan to 52 million yuan in the first half of this year. Anda said that due to increased competition in the industry, the sales price of positive electrode materials for power batteries fell sharply. At the same time, the adjustment of the state's subsidy policy for the new energy vehicle industry has led to a decline in sales of the company's main products, resulting in a sharp decline in the company's net profit in the first half of this year.
In fact, German Nano also admitted that due to the impact of the decline in the market price of lithium carbonate, the main raw material upstream, the sales price of the company's nano-lithium iron phosphate products also fell at the same time, although the sales volume increased year-on-year, but the decline in sales price led to a slight decline in the company's sales revenue. The increase in net profit was mainly due to the increase in unit gross profit caused by the decline in the price of raw material lithium carbonate and the increase in sales of nanometer lithium iron phosphate.
The rapid development of new energy automobile industry, on the one hand, provides a broad development space for the domestic positive material market, but on the other hand, it also attracts many domestic and foreign positive material enterprises to join the competition, and the industry competition is becoming increasingly fierce. Since the beginning of this year, the sharp decline in financial subsidies for new energy vehicles has made the pressure on downstream power battery enterprises begin to move up. In the future, with the continuous improvement of the concentration of the power battery market, the positive material enterprises will also gradually differentiate, and the market concentration will continue to increase in the competition. If the enterprise can not maintain the competitive advantage in technology, cost, brand, scale and so on, the profitability may continue to decline in the future, or even be eliminated.
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