With Beijing having slashed public subsidies for electric vehicles since June – in a shock reminiscent of that given to solar project developers a year earlier – demand for lithium has fallen back dramatically.
Xinyu-based Ganfeng today told the Hong Kong Stock Exchange its anticipated net profits for January to the end of September would now be 55-65% lower than it stated in its half-year figures a month ago. The new nine-month profit forecast is now RMB387-498 million ($54.8-70.4 million).
The company blamed a big loss in fair value – the estimated, most up to date value of a product – amounting to RMB175 million on its lithium products, some RMB164 million of which it attributed to a fall in the stock price of its Pilbara investment.
Ganfeng acquired an AU$50 million (RMB239 million/US$33.8 million) slice of Australian lithium producer Pilbara Minerals Ltd in March to secure more lithium raw material spodumene as part of its pre-existing offtaker arrangement.