BEIJING: China’s largest lithium producer, Ganfeng Lithium Co , noticed its first-half income plunge 59% as rising provide of the fabric utilized in batteries for electrical vehicles precipitated a droop in costs.
Ganfeng, which provides lithium utilized in rechargeable batteries to electrical automobile (EV) maker Tesla, had flagged final month that it anticipated a pointy decline in first-half earnings. On Wednesday, it stated its internet revenue totalled 295.eight million yuan ($41.70 million) for January to June, versus a restated determine of 725.three million yuan a yr earlier.
Revenues rose 21% to 2.82 billion yuan thanks to greater gross sales volumes, Jiangxi-based Ganfeng stated, however slumping lithium costs meant the corporate was unable to money in.
Costs of lithium carbonate, a chemical utilized in EV batteries, have dropped practically 20% this yr to round $9.25 per kg amid an “avalanche” of provide, consultancy CRU stated final week.
Final week Ganfeng’s rival Tianqi Lithium reported an 85% plunge in internet income for the primary half.
Nonetheless, Ganfeng stated plentiful provide and falling costs of spodumene, a mineral mined for its lithium content material, “can drastically scale back uncooked materials prices” for the corporate, which converts the spodumene into lithium chemical compounds, and “buffer the influence” of low lithium costs.
Ganfeng has pursuits in mines in Australia, Argentina and Canada and round 70,000 tonnes of lithium carbonate equal of annual conversion capability in China.
It stated final month that it anticipated first-half income to fall by 45-65%, saying it will document losses of 119.14 million yuan from adjustments in honest worth on account of fluctuations in shares it holds.
Within the second quarter alone, Ganfeng’s internet revenue totalled 43.1 million yuan, in accordance with Reuters calculations. That marks Ganfeng’s worst quarterly end result for the reason that fourth quarter of 2016, when it made a 21.four million yuan loss, Refinitiv Eikon information exhibits.