Hybrid vehicles spur Toyota’s record 2023-24 profit

Market: Battery materials, Metals
09/05/24

Japan's largest car producer Toyota reported a record profit for the 2023-24 fiscal year ending 31 March, partially because of strong sales of hybrid electric vehicles (HEVs).

Toyota nearly doubled its profit for 2023-24 to ¥5.3 trillion ($34bn), its highest ever for a fiscal year. It sold 11mn vehicles globally, including its luxury brand Lexus, up by 7.3pc from a year earlier.

The sharp rise in profit partly resulted from higher demand for HEVs that Toyota sold 3.6mn units of globally, up by 32.1pc from the previous year. North America was the leading market for its HEV sales, said the company's chief financial officer Yoichi Miyazaki, but a further breakdown was undisclosed.

Firm demand for HEVs, for which Toyota has both technological and commercial advantages given its long history of development and experience, has largely been prompted by a global slowdown in battery electric vehicle (BEV) sales. HEVs consume significantly less battery materials compared with BEVs, as their battery size is normally 10pc of a BEV.

Toyota is accelerating HEV production during 2024-25, as it plans to increase sales by 24.5pc from a year earlier to 4.5mn units. This accounts for 43pc of the company's total sales projection and is up by around 8 percentage points from a year earlier.

The global slowdown in BEV sales could mean customers are being sceptical about the overstated view that BEVs are the only solution for decarbonisation, said Toyota's chief executive Koji Sato, adding that the infrastructure necessary for driving BEVs, including charging stations, has not yet adequately developed. But he was unclear on whether Toyota will slow its EV strategy that it announced last year to sell 1.5mn/yr of EVs by 2026 with 10 new models.

The company plans to sell 171,000 BEVs during 2024-25, accounting for 1.6pc of its total sales projections. This is up by 46.2pc from a year earlier but the projection is based on "conservative estimations", according to Sato.

By Yusuke Maekawa

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02/01/25

Pure green steel costs almost double NW EU HRC price

London, 2 January (Argus) — Zero emission hydrogen-fed electric arc furnace-produced crude steel would currently cost almost double the price of northwest EU hot-rolled coil (HRC), according to data launched by Argus today. The opex cost of green hydrogen-fed direct reduced iron/electric arc furnace (EAF) route steel was €1,074/t at the end of December, compared to a northwest EU HRC price of €558.25/t ex-works. That is also €544/t more than the cost of blast furnace/basic oxygen furnace (BOF)- produced crude steel, showing genuinely green steel would require a much higher finished product price than current blast furnace-based output, assuming a similar cost structure to today. Most current green offerings from EU mills are still produced via the blast furnace, with emissions reductions achieved through mass balancing, offsetting, or by reductions achieved elsewhere in the supply chain. Buy-side desire to pay premiums for this material has been limited, particularly given the downturn in the European market in the second half of 2024. This has contributed to the market for premiums remaining immature, illiquid and opaque, and complicated by the lack of a commonly agreed definition for green steel. Automakers have shown the most interest in greener steel, given their need to reduce emissions from the wider supply chain, as well as vehicle tailpipe emissions. Some automotive sub-suppliers suggest certain mills have been willing to reduce their green premiums to move tonnes — one reported paying a €70/t premium for EAF-based cold-rolled coil for a 2025 contract, but this was not confirmed. Europe's largest steelmaker, ArcelorMittal, said over the second half of last year it would pause its direct reduced iron (DRI) investment decisions ahead of the European Commission's Steel and Metals Action Plan, and as it called for an effective carbon border adjustment mechanism and more robust trade defence measures. Market participants largely agree that natural-gas fed EAF-based production is the greenest form of output currently available to EU mills, substituted with imports of greener metallics and semi-finished steels from regions with plentiful and competitively priced energy. Argus ' new costs show BOF steel is currently just over €31/t more expensive than scrap-based EAF production fed with renewable energy. Europe's comparatively high cost of energy is one key issue for transitioning to DRI/EAF fed production. Last month, consultancy Mckinsey said mills could rely on "green iron" hubs going forward, with iron-making decoupled from production of crude steel, enabling DRI production to be located in regions with low-cost gas and ore, and raw steel production in regions with access to renewable energy. The range of production costs, launched today, include five crude steel making pathways and are calculated using consumption and emissions data provided by Steelstat , in combination with Argus price data, including hydrogen costs. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: Gallium nitride to expand into auto industry

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Viewpoint: Gallium nitride to expand into auto industry

London, 2 January (Argus) — Gallium nitride (GaN) is already used in power devices for consumer electronics, but manufacturers are now developing the technology for use in the automotive sector, with the compound set to make its way into vehicles in the coming year. GaN semiconductors are currently used in consumer and industrial applications, including alternating current adapters and server power supply units. But use of GaN semiconductors in automotive applications is at an early stage — unlike silicon carbide (SiC) chips, which are increasingly being incorporated into electric vehicle (EV) power electronics. GaN has a similar crystalline structure to silicon but can deliver greater efficiency, faster switching speeds and higher thermal conductivity. Lower resistance, smaller form factors and the ability to operate at higher voltages mean GaN semiconductors consume less power than silicon semiconductors. Integrating GaN into silicon substrates rather than sapphire is opening up new uses for GaN in vehicle power devices and light detection and ranging (LiDAR). GaN is suitable for low and high-voltage applications for EVs, including on-board chargers (OBCs), power inverters and traction motors. US-based semiconductor firms Navitas Semiconductor and Texas Instruments (TI), and Chinese-owned Nexperia have been developing GaN chips for automotive for several years and are now moving quickly into higher voltages. Several manufacturers have now started producing devices and expect to gain traction over the next year. Navitas has been producing GaN devices since 2018 and expects to begin making the product for the automotive industry in 2025. Japan's ROHM Semiconductor in December partnered with the world's largest semiconductor company, Taiwan-based TSMC, to develop and produce GaN power devices for EVs. The companies will integrate ROHM's device development technology with TSMC's GaN-on-Si process technology and provide control integrated circuits to maximise performance. Israeli firm VisIC Technologies is developing GaN products for automotive and industrial uses. It announced plans in December to partner with Austrian automotive technology developer AVL to advance inverter technology for EVs. The firms aim to produce devices that offer higher performance and lower costs at both the device and system level, compared with SiC devices. VisIC's GaN-on-silicon power devices consume less energy during production and can be manufactured in 200mm and 300mm silicon foundries to scale up output. VisIC plans to work with AVL to expand the platform to include 800V power modules — the next generation of EV charging technology. China's Innoscience Technology is developing GaN-on-Si power products and recently launched two 100V automotive-grade devices optimised for LiDAR for advanced driver assistance and autonomous driving applications, as well as DC-DC converters and automotive audio applications. The company has started mass production and is fulfilling batch orders to meet demand. Several manufacturers and foundries are now building out capacity to accommodate commercial-scale output of GaN devices. US-based GlobalFoundries said in early December it has received $9.5mn in federal funding to continue adding new tools, equipment and prototyping capabilities at its Vermont facility, as it moves closer to full-scale manufacturing of its 200mm GaN-on-Si chips. And TI started producing GaN-based power semiconductors at its factory in Aizu, Japan, in October. As the site ramps up, TI's internal capacity will quadruple between its US and Japanese factories. The company has also piloted manufacturing 300mm wafers to increase volumes. Limitations in manufacturing have so far hampered the widespread adoption of GaN in EVs. Cost, supply-chain issues and concerns around thermal management and voltage spikes remain hurdles that manufacturers must overcome. The technology has yet to be proven for automotive applications, which have stringent standards for quality and safety. For this reason, manufacturers are starting with GaN in OBCs and converters to establish confidence. Companies such as Germany's Infineon and Swiss chipmaker STMicroelectronics anticipate there will be room for both SiC and GaN in the automotive sector, depending on the power, efficiency and cost requirements of the application. The availability of gallium compared with silicon may also become a factor as demand increases, given export restrictions out of primary supplier China. By Nicole Willing Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: Strong fundamentals to support Nb columbite

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Viewpoint: Strong fundamentals to support Nb columbite

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Viewpoint: Policy uncertainty dogs battery anode plans

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30/12/24

Viewpoint: Policy uncertainty dogs battery anode plans

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But on 21 November, the company filed for Chapter 11 bankruptcy protection in the US , in part because of difficulties "bridging financing between different stakeholders", outgoing chief executive Peter Carlsson said. The company had already closed down its R&D facility in the US and put plans for factories in Canada, Germany and Sweden on hold. Its financial woes intensified after the Swedish government declined to invest. Other European governments have already reduced financial support for EVs, more for spending reasons than policy, which has softened demand in the region. France recently changed eligibility requirements for subsidies , and Germany ended its subsidy late last year. Some companies, like Norwegian battery materials company Vianode, have been planning multi-billion dollar investment programmes to expand their reach in the automotive industry throughout North America and Europe. It is not clear if Trump's election will have an effect on these plans. Vianode opened its first anode graphite production plant, Via One, in Herøya, Norway, in October. The plant will have a capacity of 2,000 t/yr, enough to supply 30,000 EVs annually, according to Vianode. Chinese firms have scaled up production of key battery materials at all stages of the supply chain, creating more competition for European and US producers. Chinese producers dominate the global EV market with about 70pc of market share, even as the EU and US have put policies in place to try to support their domestic industry. China's lithium-ion battery exports to the US jumped in November as suppliers looked to get ahead of potential new tariffs. The Trump administration is likely to increase tariffs on Chinese lithium-ion batteries to as much as 60pc in the coming few months after Biden earlier this year lifted them to 25pc from 7.5pc. This could help support US-based battery plants. 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By Lauren Masterson and Hadley Medlock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: Zinc prices to drop in 2025 on higher supply

30/12/24

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30/12/24

Viewpoint: Zinc prices to drop in 2025 on higher supply

London, 30 December (Argus) — Zinc prices increased this year as supply was tight, but prices are expected to soften next year because of improved supply and continued weak demand in key consumption markets. Zinc has been one of the best performers of the London Metal Exchange base metals this year, trading above $3,000/t going into December compared with a $2,537/t average in January. This puts this year's average price 6pc higher than the 2023 average. The price strength seen this year can be attributed to supply pressures, including production disruptions at key mines. Global mining group Glencore's McArthur River mine in Australia halted operations in March owing to extreme rainfall, and Chinese mining company MMG's Dugald River mine in China was placed under care and maintenance during the third quarter. The zinc market had a 164,000t deficit in 2024, according to forecasts from the International Lead and Zinc Study Group (ILZSG), additionally driven by reduced mined output from Swedish metals producer Boliden's Tara mine in Ireland, and Portuguese mining company Almina's Aljustrel mines in Portugal. Higher supply forecast Supply is expected to increase in 2025, with ILZSG forecasting a surplus of 148,000t for the year, as new mine supply is scheduled to ramp up. One of the biggest supply-side developments is the reopening of Canadian mining firm Ivanhoe Mines' Kipushi mine in the Democratic Republic of Congo. Kipushi is expected to produce 278,000 t/yr of zinc over its first five years, and will become Africa's largest zinc mine and the fourth-largest globally, according to Ivanhoe. In Europe, higher output from Bosnia and Herzegovina and Portugal, and the reopening of the Tara operations in Ireland, will contribute to the overall increase in supply, according to ILZSG. Russia's production is also expected to rise, supported by the recently opened Ozerneoye plant . Australia, Canada, China, Japan, the Netherlands and Norway will also all see concentrate supply increases next year, particularly in the first quarter, with an expansion at Boliden's Odda smelter due to ramp up output early in the new year. Global mined supply has declined over the past three years, but trading firm Macquarie expects global mine supply to grow by 5.8pc in 2025. Total project approvals this year reached around 570,000 t/yr of zinc, Macquarie said in its 2025 global commodity outlook, published on 5 December. Persistent weak demand But demand growth may be insufficient to absorb this additional output, leading to oversupply in the coming years. Global carbon steel demand has fallen this year, as construction sector demand has generally been weak across most major economies, including China. Construction steel accounts for 55pc of zinc end demand, according to Macquarie. The Argus weekly ex-works northwest Europe assessment for hot-dipped galvanised steel — one of the main products that use zinc — has dropped by nearly 17pc from the start of the year to €665/t ($690/t) on 4 December, reflecting a struggling steel sector in Europe. European manufacturing activity also remains weak, with the automobile sector facing a number of factory closures because of subdued demand. German carmaker Volkswagen announced in late October that it plans to close at least three plants and lay off thousands of employees, as the firm attempts to save money amid falling sales because of an overall decrease in European car demand. And global automaker Stellantis plans to cut its inventories going into the new year. Macquarie predicts that global refined zinc demand will grow by 1.7pc in 2025, which is lower than the previously anticipated 2.5pc growth rate because of uncertainty surrounding potential new US tariffs following the inauguration of president-elect Donald Trump in January. The proposed tariffs could impact the strength of the US dollar and global trade. Zinc premiums in Europe decreased in 2024. The Argus Rotterdam SHG zinc premium dropped by nearly 30pc throughout the year, reflecting weaker consumption from downstream industries, particularly construction and manufacturing. Ongoing uncertainty over global economic conditions, high energy costs and new supply in Europe will likely play a role in keeping premiums subdued. Price outlook 2025 Given the anticipated supply surplus and the ongoing demand lag, analysts are generally bearish on zinc prices in 2025. The 2024 zinc price currently averages at $2,800/t, but the World Bank and ratings agency Fitch both expect this to decline to $2,600/t in 2025, followed by a further drop to $2,500/t in 2026. Similarly, Macquarie forecasts the zinc price to drop to $2,650/t next year and to $2,450/t in 2026, reflecting expectations of a market surplus. By Roxana Lazar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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