SHANGHAI, Sep 22 (SMM) - A weekly update on the trending stories from the New Energy sector.
1. Pilbara, one of Australia’s largest spodumene concentrate producers, conducted the second round of auction from 2pm to 4pm on September 14 (CST), and the final auction price was set at a record high of US$2,240/mt. The auction volume is 8,000 mt, with the grade being 5.2%-5.5%. If calculated by the current auction price, lithium carbonate costs will increase to 165,000 yuan/mt.
The auction price reflects the current mismatch between supply and demand in the lithium salt market, but the amount of lithium concentrate auctioned is very small compared to China's monthly imports. However, domestic mainstream smelters will soon negotiate long-term orders with overseas lithium mines. Such a high auction price will become the trigger of overseas mines' price increases, posing a threat to the costs of smelters.
2. Foxconn and PTT mentioned in a joint statement on September 14 that they had established a joint venture and planned to establish a new plant in Thailand for the production of EVs.
The main reason for Foxconn’s plan lies in its declining profits of consumer electronics. The company's sales in 2021 grew only by 0.3%, and the net profit has continued to shrink since 2017. If the company wishes to increase its gross profit margin from the current 6% to the expected target of 10%, EVs will be the key. Since the announcement of Foxconn’s willingness to build cars, positive expectations have pushed the company’s stock price to a four-year high in March, with YTD increase of more than 15%, evidencing that the electric vehicle project has brought much attention and development potential.
3. The Ministry of Commerce issued a notice on furthering the key tasks of promoting the consumption in the current commercial field. And the consumption of new cars will also be promoted. The authorities will accelerate the transformation from purchase management to using management, remove barriers restricting auto purchase and use, and release the potential of the consumption. Relevant departments will jointly implement the programs to promote NEVs to rural areas. The consumption of second-hand cars can be expanded. The authorities encourage the branding and chain management of second-hand car dealerships, and promote the innovation of circulation models. The policies that restrict the cross-province/city moving of second-hand cars shall be cancelled. Qualified enterprises will be supported to export second-had cars to expand the export scale in an orderly manner.
The output and sales of NEVs stood at 1.81 million and 1.80 million units in January-August, and proportion of NEVs stood at only 11%. According to the current development, the market share of NEVs is expected to achieve 20% by 2025 ahead of schedule. The industry chain of NEVs development is supported by stimulus policies, and the diversification of NEVs will continue to meet market demand. NEVs are expected to maintain strong growth.
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