Vulcan Energy Resources Ltd soared in Sydney after the mining company published a study suggesting it is one step closer to providing Europe’s auto industry with a key ingredient for electric vehicle (EV) batteries. Vulcan on Friday jumped 29 percent, to the highest value since the shares started trading in 2018, after releasing a pre-feasibility study saying that its German lithium resources are the biggest in Europe. The Australian start-up said that it can produce battery-grade lithium without emitting carbon dioxide, and do so more efficiently than its rivals. Its strategy involves extracting lithium using a geothermal power plant in southern Germany. The method is similar to what Warren Buffett’s Berkshire Hathaway Inc is researching in California’s Salton Sea. The study values Vulcan’s lithium resources near Offenburg at 2.8 billion euros (US$3.4 billion) before taxes. The project could extract enough for 1 million electric vehicle batteries per year and start production in 2024, the company said. Vulcan hopes to benefit from rising demand for lithium in Europe, which is trying to build up a local battery manufacturing industry to reduce dependency on Asian suppliers. Electric vehicles have become a focal point in the region, with governments bolstering subsidies to help automakers recover from the pandemic and comply with stricter emissions standards. While fully electric vehicles drive emissions-free, the production of batteries has been criticized for its carbon footprint. Mining lithium from rocks is energy intensive, and extracting it from dried lake beds, as is often done in South America, drains local water reserves. Vulcan said that its process is more environmentally friendly because its feedstock — hot salar brine — provides not only lithium, but also heat to generate renewable energy, reducing the method’s overall carbon footprint. Friday’s gain values the firm at A$564 million (US$433.7 million). Stringent environmental rules and local opposition have complicated the setup of
Norway’s oil and gas reserves have made it one of the world’s wealthiest countries, but its dreams for deep-sea discovery now center on something different. This time, Oslo is looking for a leading role in mining copper, zinc and other metals found on the seabed and in hot demand in green technologies. The country could license companies for deep-sea mining as early as 2023, the Norwegian Ministry of Petroleum and Energy said, potentially placing it among the first countries to harvest seabed metals for electric vehicle batteries, wind turbines and solar farms. However, that could also place it on the front line of a controversy over the environmental risks posed by exploiting the world’s unexplored seabeds. Norway on Tuesday announced it was starting preparations for an environmental impact study needed to open areas of its seabed mineral exploration and production. The move follows three years of expeditions on which Norway has found deep-sea deposits containing copper, zinc, cobalt, gold and silver, said the Norwegian Petroleum Directorate, which conducted the work. There could be up to 21.7 million tonnes of copper — more than the world’s copper output in 2019 — and 22.7 million tonnes of zinc on the Norwegian continental shelf, Norwegian University of Science and Technology (NTNU) researchers have estimated. However, mean estimates are far lower, at 6.9 million and 7.1 million tonnes, respectively. “Copper mining inside Norway’s jurisdiction will probably never replace extraction onshore, but ... it can be an important contributor in meeting future global demand,” NTNU associate professor Steinar Loeve Ellefmo said. “Deep-sea mining might also change the geopolitical climate,” he said. The metals have been found in polymetallic sulphides, or “black smokers,” which are formed when sea water reaches magma, heats up and is flushed back to the seabed carrying dissolved metals and sulfur. The expeditions have also discovered high concentrations of lithium and the rare
‘DISAPPOINTING’: Wells Fargo and Exxon Mobil dragged the S&P 500 down, while shares of major banks declined, despite their better-than-expected fourth-quarter profits
Wall Street’s main indices on Friday finished lower, weighed down by big US banks after their earnings reports, while the energy sector fell sharply due to a regulatory probe into Exxon Mobil Corp. The S&P 500 banks index lost ground as shares of Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc tumbled even though they had posted better-than-expected fourth-quarter profits. The bank sector had rallied sharply in the past few days. Wells Fargo, down 7.8 percent, was among the biggest drags on the S&P 500, along with Exxon Mobil, down 4.8 percent. “Financials and energy have been disappointing ... that’s bringing down the whole market,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina. “This year is the year for financials, energy, materials, industrials. So if there is a day when they’re not leading, it’s not good news for the market,” Zaccarelli said. Wall Street’s major indices had recently hit record highs on hopes for a hefty fiscal stimulus package. US president-elect Joe Biden late on Thursday unveiled a US$1.9 trillion stimulus proposal, which included about US$1 trillion in direct relief to households. Meanwhile, data showed a further decline in US retail sales last month, in the latest sign the economy lost considerable speed at the end of last year. “The weaker-than-expected economic data, and especially in parts of the economy like retail sales, is a big driver,” Charles Schwab chief investment strategist Liz Ann Sonders said. “We are seeing sentiment through last week in extreme speculative frothy euphoric optimistic territory,” she said. “Sometimes it doesn’t need a catalyst before it begins to fall on its own weight.” The Dow Jones Industrial Average fell 177.26 points, or 0.57 percent, to 30,814.26, the S&P 500 lost 27.29 points, or 0.72 percent, to 3,768.25 and the NASDAQ Composite dropped 114.14 points, or 0.87 percent,
European stocks on Friday snapped four weeks of gains, as the prospect of tighter lockdowns, slow vaccine shipments to the continent and resurgent COVID-19 cases in China dampened hopes of a speedy economic recovery. The pan-European STOXX 600 index closed down 1.01 percent at 407.85 in its worst session since Dec. 21, with losses accelerating after Wall Street stocks tumbled following big bank earnings. The STOXX 600 logged a 0.81 percent weekly decline, its first since the middle of last month. Adding to worries, some EU nations are receiving fewer than expected doses of COVID-19 vaccines as US pharmaceutical firm Pfizer slowed shipments of the vaccine developed with German partner BioNTech. BioNTech shares dropped 2.2 percent. German Chancellor Angela Merkel called for “very fast action” to counter the spread of COVID-19 as the country saw a record number of virus-related deaths, while France said that it would bolster its border controls from tomorrow. The German DAX dropped 1.44 percent to 13,787.73, a weekly decline of 1.86 percent, and France’s CAC 40 fell 1.22 percent to 5,611.69, losing 1.67 percent on the week In London, the FTSE 100 dropped 0.97 percent to 6,735.71, despite data showing that the UK’s economy recorded a smaller-than-expected contraction in November. The FTSE 100 declined 2 percent from a week earlier. The mining, and oil and gas sectors slumped 3.1 percent and 2.6 percent, respectively, after Chinese authorities put more than 28 million people under new lockdowns, raising concerns about demand from the major consumer of commodities. Hopes of a large US fiscal stimulus sent the STOXX 600 to a 11-month peak earlier this week, but markets retreated after US president-elect Joe Biden outlined a US$1.9 trillion proposal that raised worries of a tax hike. “Market positioning had been quite aggressive, so I suppose it is a pause for breath,” said Roger Jones, head of
Oil on Friday slid by the most in three weeks as a stronger US dollar and weak US economic data stoked concerns over an economic rebound. The US dollar strengthened, reducing the appeal of commodities priced in the currency. US consumer sentiment cooled more than forecast this month and other economic data such as sluggish retail sales and producer prices also portray the obstacles still facing the country as it emerges from the COVID-19 pandemic. Meanwhile, US president-elect Joe Biden said that he would ask the US Congress for US$1.9 trillion to fund immediate relief for the US economy, which has been pummeled by the pandemic, but the large price tag and inclusion of initiatives opposed by many Republicans set up the aid package for a drawn out legislative battle. “We’ve had a lot of strength in a number of different markets and now we’re getting a pullback,” said Bill O’Grady, executive vice president at Confluence Investment Management in St Louis, Missouri. O’Grady said that oil markets need “driving to go up. If people have money and no place to spend it, it doesn’t make any difference.” West Texas Intermediate for February delivery fell 2.86 percent to US$52.04 a barrel, down 0.38 percent for the week. Brent crude for March delivery dropped 2.34 percent to US$55.10 a barrel, down 1.59 percent from a week earlier. Despite the pullback in oil futures, vaccine breakthroughs and Saudi Arabia’s pledge earlier this month to deepen output cuts are expected to support prices. JPMorgan Chase & Co said that a “nasty deficit” could emerge in the oil market later this year. Meanwhile, technical indicators had been flashing warnings signs all week. The 14-day Relative Strength Index for both US and global benchmark crude futures traded above 70 this week in a sign that they were overbought, although both slipped under that
Wheat rose to a six-year high in Chicago after top exporter Russia said it is ratcheting up efforts to cool domestic food inflation by curbing grain exports. Russia on Friday said that a new duty on shipments would rise even more than expected, just a few weeks after being imposed in the middle of next month, and taxes would continue at some level after the current season ends in June. The government had announced an initial tax last month, alongside a grain-export quota, after Russian President Vladimir Putin demanded action following sharp increases in prices for pantry staples. The Russian measures, combined with tightening supply elsewhere and surging Chinese demand, have already helped drive global grains prices to multiyear highs. That is stoking worries over global food inflation at a time when hunger is surging around the world due to the COVID-19 pandemic. Russia’s wheat duty is to double to 45.36 euros (US$54.79) a tonne on March 1, the Russian Ministry of Economic Development said in a statement. Earlier this week, the Ministry of Agriculture proposed an increase to 40.82 euros a tonne from March 15. Levies on corn and barley would also come into force from mid-March. While other wheat shippers such as Australia have had bumper harvests, Russia plays a vital role in global supply and its grain would still be needed in the latter part of the season, said Andree Defois, president of consultant Strategie Grains. Chicago wheat futures reached the highest since 2014 after the government announcement and Paris milling-wheat is set for the biggest weekly gain in four years. That puts extra pressure on big importers such as Egypt, which purchases large amounts of wheat from Russia each year because its prices tend to be cheaper than most other sources. “If the world could afford to go without Russian wheat, it
US president-elect Joe Biden’s US$1.9 trillion stimulus proposal was met with a shrug in Asia on Friday as observers said that the massive spending spree had been largely factored into valuations, while profit-taking weighed on markets at the end of a broadly healthy week. Reassurances from US Federal Reserve Chairman Jerome Powell that record-low interest rates and loose monetary policy would remain in place for some time removed some lingering angst on trading floors, while there remains plenty of optimism about the long-term economic outlook. Surging virus infections and deaths — and the lockdowns they are forcing governments to impose — are the main stumbling blocks for investors, despite the rollout of vaccines that could allow life to return to normal. With days before he takes office, Biden unveiled his rescue package, which he said addressed “the twin crises of a pandemic and this sinking economy.” The plans include an extra US$1,400 in cash for individuals — to top up the US$600 in last month’s stimulus — a hike in the minimum wage to US$15 an hour and billions of US dollars to ramp up vaccinations so that 100 million are administered in 100 days. However, analysts said that while Democrats have control of the US Congress, the spending plans are far from guaranteed to get through untouched. While welcomed by investors, the proposals failed to fire a surge in stocks, with Asian markets mostly down. In Taipei, the TAIEX on Friday fell below 16,000 points on high turnover, ending down 90.80 points, or 0.58 percent, at 15,616.39 on expanded turnover of NT$433.156 billion (US$15.2 billion). Boosted by a 6 percent rise overnight by the American depositary receipts of Taiwan Semiconductor Manufacturing Co (台積電), the weighted index soared 334 points at one point, reaching a record high of 16,041.59 and fluctuating in a wide range of 426.48
The US dollar on Friday rose across the board to hit a four-week high against a basket of currencies, as data showing the COVID-19 pandemic’s continuing toll on the economy boosted demand for the safe-haven currency. US retail sales fell for a third straight month last month amid job losses and renewed measures to slow the spread of COVID-19, the US Department of Commerce reported on Friday, further evidence that the economy lost speed at the end of last year. The weak data dragged US Treasury yields lower and US stocks fell as investors turned more risk-averse on Friday. “I feel that after all the optimism regarding vaccines, we are now living the reality of a very slow [vaccine] rollout, which is weighing heavily on business activity,” said Juan Perez, a senior currency trader at Tempus Inc in Washington. “Until we have more guarantees on the medical front, markets will not continue to flourish, despite whatever financial aid may be on the way,” Perez said. US president-elect Joe Biden on Thursday revealed a nearly US$2 trillion proposal to address the COVID-19 pandemic and the economic harm that it has done, which included US$20 billion for vaccine distribution and US$50 billion for testing. It builds on the US$982 billion COVID-19 relief bill passed last month, more than tripling the funding allocated to state and local governments for vaccine distribution. The US dollar index was 0.6 percent higher at 90.78, finishing the week up 0.8 percent, its best weekly showing in 11 weeks. Rising COVID-19 infections also curbed risk appetite, as daily cases in China hit their highest in more than 10 months. France is to tighten its COVID-19 border controls and bring its curfew forward by two hours, while German Chancellor Angela Merkel said that she wanted “very fast action” to counter the spread of virus variants after Germany
HARD PRESSED: The company said it is unable to meet some customers’ demand as rising 5G smartphone penetration and an auto sector recovery drive up chip demand
Vanguard International Semiconductor Co (世界先進) yesterday said it is seeking new merger-and-acquisition (M&A) opportunities and other ways to expand capacity, as increasing 5G smartphone penetration and a pick-up in the automotive sector are fueling demand for its chips. The company is also counting on a rebound in the global economy, which is forecast to grow 5 percent this year after contracting by an estimated 4 percent last year, amid optimism that the COVID-19 pandemic would be tamed as vaccinations spread, it said. Vanguard, which makes power management chips and driver ICs for flat panels, is feeling the robust demand. The chipmaker said its factories are already running at full capacity and are unable to fill some customers’ demand. It has recently implemented a new pricing scheme, charging higher prices if customers want to secure additional capacity that still needs to be built. “Demand for 8-inch wafers is pretty strong, mainly driven by the work-from-home, remote learning and stay-at-home entertainment trends, amid the pandemic,” company chairman Fang Leuh (方略) told reporters during the year-end media gathering in Taipei. Demand for driver ICs for flat panels used in TVs, notebooks and other devices are all on the rise, causing widespread supply constraints, Fang said. Overall, the demand for power management chips outpaces supply by more than 10 percent, estimates by some industry researchers showed. “Vanguard will continue to invest in new capacity expansion to support customers’ demand and growth,” Fang said. “Seeking a merger-and-acquisition deal is a direction the management is looking at.” Aside from M&As, Vanguard plans to add a capacity of 10,000 8-inch wafers at its Singapore fab this year and is also considering boosting the capacity of a local fab. A run-up in the penetration rate of 5G smartphones this year is giving a further boost to semiconductor demand, Fang said. Globally, 5G smartphones are forecast to account
The nation’s 5G smartphone penetration rate is forecast to climb to 80 percent by the end of the year, as more affordable handsets become commercially available, Samsung Electronics Taiwan Co (台灣三星電子) said yesterday. “The price of entry-level 5G handsets will probably drop to NT$7,000 to NT$8,000 by the end of the year,” Samsung Taiwan vice president Jacob Chen (陳啟蒙) told reporters during the launch of the company’s new flagship S21 5G smartphone series in Taipei. That represents a significant price drop from NT$12,000 at present, he said. Samsung is lowering handset prices as 5G component supply chains mature, Chen said, adding that folding phones are also likely to see a price drop. Prices for the S21 series are NT$4,000 to NT$7,000 lower compared with the previous generation. Samsung expects sales of the new 5G phones to increase 20 percent compared with the S20 series, Chen said. “The sales of flagship handsets were affected by the COVID-19 pandemic in 2020,” he said. However, market penetration for 5G accounts would lag significantly behind handset penetration, he said. “Telecoms have been proactive in encouraging users to upgrade to 5G, but so far we haven’t seen a ‘killer app,’” he said. Following the debut of 5G services last year, about 35 percent of Taiwanese mobile users are forecast to upgrade to 5G services by the end of this year, Chen said. Noting that handsets priced at more than NT$20,000 account for 40 percent of the Taiwanese market, but make up 70 percent of the market value, Chen said the focus for Samsung is on the flagship model market. “We aim to be No. 1 in the Taiwan high-end Android market,” he said. The S21, S21+ and S21 Ultra are to go on sale on Jan. 29 in Taiwan.
Investors are advised to remain cautious and avoid stocks with high price-to-earnings (PE) ratios, weak cash flows and low earnings growth, as equity markets are overheating, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Tuesday. “We do not think that major stock markets are in a bubble now, although some securities’ PE ratios have been pushed too high as their share prices advanced,” head of investment strategy Allen Liu (劉家豪) told the Taipei Times at a meeting in Taipei. Liu was referring to the ratio of a company’s stock price to its earnings per share. Companies with high PE ratios are often regarded as overvalued. “However, given ample funds due to governments’ relaxed monetary policies and quantitative-easing programs, companies with high PE ratios are not necessarily bad targets,” Liu said. Companies with high PE ratios could still be worth a look if their earnings are expected to grow this year, as higher earnings per share would drive down their PE ratios to a more reasonable level, he said. Besides, firms that would benefit from future economic trends, such as digitalization or self-driving vehicles, could be good targets as their growth momentum could last longer, he said. That is why some local tech stocks, whose profits have not risen significantly, have kept on advancing, as investors are banking on them benefiting from these trends, Liu said. “It is safer and more important to buy the right stocks at a higher cost than buying cheap, but wrong stocks,” he added. Investors should also check companies’ cash flow, he said. A company that forecasts rising profits, but has cash flow problems might not be trustworthy, he said. HSBC Global Asset Management Taiwan Ltd (匯豐中華證券投信) chief investment officer Julian Lin (林經堯) on Wednesday also said that stock markets are not in a bubble yet, as governments’ quantitative easing programs are forecast to continue. Given
FUNDING: After hitting a record NT$813.19 billion last year, corporate bond issuance could grow further this year if interest rates remain low, a TPEX official said
Corporate bond issuance last year hit a record NT$813.19 billion (US$28.55 billion), up 106 percent from a year earlier, as companies took advantage of lower interest rates to repay old debt or fund new investments, Taipei Exchange (TPEX) data showed. Straight bond issuance totaled 209 last year, valued at NT$743.59 billion, up 109 percent from NT$354.85 billion in 2019, while convertible bond issuance totaled 100, valued at NT$69.61 billion, up 71 percent from NT$40.6 billion, the data showed. All of the straight bonds issued were fixed rate, with five-year bonds accounting for 41 percent, seven-year bonds 23 percent and bonds maturing in more than 10 years making up 24 percent. Most of the straight bonds’ coupon rates fell below 1 percent in line with the central bank’s rate cuts. The lowest was 0.36 percent — Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) NT$1.9 billion bond issue last month, which was rated “twAAA” by Taiwan Ratings Corp (中華信評), the data showed. Most of the straight bonds with coupon rates of more than 1 percent had a longer maturity, such as Taiwan High Speed Rail Corp’s (台灣高鐵) NT$10.5 billion 30-year bonds with a coupon rate of 1.3 percent, the data showed. “It was not surprising that corporate bond issuance rose last year, as even though companies did not have plans for expansion or new investments, they could borrow money to repay old debt, which would be more economical,” a TPEX official said by telephone. Whether bond issuance would maintain its strong growth this year remains to be seen, the official said, adding that if the low interest environment continues, it might provide an incentive for new bond issuance. The biggest bond issuer last year was TSMC, with NT$120 billion, followed by Taiwan Power Co (台電) with NT$84.1 billion, and Fubon Financial Holding Co (富邦金控), with NT$40 billion, TPEX data showed. Meanwhile,
Taiwanese crowdfunding campaigns raised more than NT$2.5 billion (US$87.78 million) last year, with one effort taking in NT$124 million, according to the crowdfunding tracking Web site Backtail. The number of individual donations also grew significantly to more than 1 million, rising from 660,000 in 2019, Backtail data showed. The biggest crowdfunding was for a proposed historical film trilogy by Taiwanese director Wei Te-sheng (魏德聖), which raised NT$124 million from 23,956 individual donations, the Web site showed. The films, with the first one expected to be released in 2024, is to feature Taiwan’s early history from the perspective of Aboriginal Siraya hunters and gatherers, Chinese pirates and Dutch missionaries. Wei is the widely acclaimed screenwriter and director of Cape No. 7 (海角七號), Kano and Warriors of the Rainbow: Seediq Bale (賽德克:巴萊). The other nine were all related to group buying, a business model in which companies offer their products at significantly reduced prices on the condition that a minimum number of people commit to purchasing them. In the second-highest grossing campaign, 2,724 people pledged NT$53.14 million to buy the Ecovacs robot vacuum model, according to the Web site. Backtail’s review also drew attention to a crowdfunded “Taiwan Can Help” advertisement, which was published in the New York Times in April to protest Taiwan’s exclusion from the WHO and to offer global assistance amid the COVID-19 pandemic. That campaign received 26,980 donations in less than one day — the second-highest number for any Taiwanese crowdfunding last year — and raised a total of NT$19.13 million, the Web site showed. In total, the 1,500 crowdfunding campaigns in Taiwan brought in more than NT$2.5 billion last year, compared with about 900 campaigns and NT$1.7 billion in funds the previous year, the data showed. Backtail’s statistics included information from the local crowdfunding platforms zeczec (嘖嘖), Flying V
The Financial Supervisory Commission (FSC) on Thursday said it would tighten regulations on property insurance companies and require them to adjust their policy premiums at least every five years. The measure aims to prevent insurers from engaging in price wars or setting unreasonably high rates, the commission said. The amendment to the Regulations Governing Pre-sale Procedures for Insurance Products (保險商品銷售前程序作業準則) would take effect in two months, Insurance Bureau Deputy Director-General Wang Li-hui (王麗惠) told a news conference in Taipei. Currently, property insurance companies are required to review their insurance products at least every six months and adapt their premiums based on their loss ratio or expense loading ratio, but they are not required to adjust them routinely, Wang said. The loss ratio is the losses an insurer incurs due to claims as a percentage of premiums earned, while the expense ratio is the ratio of the administrative and maintenance expenses compared with the premiums. A high loss ratio or expense ratio indicates financial distress, while low ratios suggest that insurance products are overpriced. While insurers are subject to FSC regulation when independently calculating their rates, some tend to be conservative about raising their premiums even though their loss ratio or expense ratio is high, Wang said. Those insurers are afraid of losing market share, as this hurts their financial strength in the long term, she said. On the other hand, some insurers are not proactive about trimming their premiums, even as their loss ratio or expense ratio decreases, Wang added. The tightened regulations would require insurers to regularly assess and adjust their rates for vehicle and fire insurance products, Wang said, adding that the rate adjustments would have to be approved by the insurers’ president and reported to the board of directors. Insurers that contravene the regulations would be fined NT$600,000 to NT$6 million (US$21,067 to US$210,674), she said, adding
PRESSURE ON: The nine, including oil giant CNOOC, were added to a US blacklist of more than 60 Chinese firms with alleged links to the People’s Liberation Army
US President Donald Trump’s administration on Thursday blacklisted Chinese smartphone manufacturer Xiaomi Corp (小米) for alleged military links along with the nation’s third-biggest oil company over its drilling in the South China Sea, part of a final push to ratchet up pressure on Beijing before US president-elect Joe Biden takes office. Xiaomi was one of nine firms added to the US Department of Defense’s list of Chinese military companies. Other firms include state-owned planemaker Commercial Aircraft Corp of China Ltd (中國商用飛機有限公司), which is central to China’s goal of creating a narrow-body plane that can compete with Boeing Co and Airbus SE. Meanwhile, the US Department of Commerce’s move against China National Offshore Oil Corp (CNOOC, 中國海洋石油), the nation’s main deepwater explorer, denies it access to US technologies without specific permission. It follows a decision last month to blacklist more than 60 other Chinese companies. The new raft of curbs mark a late push by Trump to ensure his pressure campaign against China stays in place long after he leaves office next week. While Biden and many Democrats say they oppose Trump’s tactics on China, the restrictions will give the new president increased leverage over Beijing when his team negotiates on trade with leaders of the world’s second-largest economy. Biden has pledged to work with allies to develop a more coherent strategy against China, though it is not clear whether there would be any immediate shifts in policy. Under an executive order signed by Trump last year targeting what it calls China’s abusive business practices, US investors will need to unwind stakes in designated companies by November. Xiaomi surpassed Apple Inc in smartphone sales in the third quarter, according to the International Data Corp. It joined Hong Kong’s Hang Seng Index in September last year after grabbing market share from Huawei Technologies Co (華為) as US
Japan’s major automakers have cut production at various factories due to a worsening global semiconductor shortage brought about as chipmakers struggle to meet soaring demand from consumer-electronics companies. Lockdowns and travel restrictions are prompting housebound shoppers to snap up more phones, game consoles, smart TVs and laptops, which in turn has fueled demand for the chips used in those devices. That means automakers from Toyota Motor Corp to Volkswagen AG are at risk of not getting enough parts to fuel a fledgling recovery in their own industry. China Association of Automobile Manufacturers deputy secretary general Chen Shihua (陳世華) said the chip shortage had caused a relatively big impact on the Chinese auto industry from late last month and might persist into the second quarter. He added that some chipmakers had boosted their prices, so it was hard to measure the impact in terms of vehicle-sales reductions. That has forced automakers all around the world to cut back on production. Toyota yesterday morning said that it would halt four production lines at three plants in Japan’s Aichi Prefecture due to parts shortages. The lines were to resume operation for the afternoon shift, a company spokeswoman said. Toyota on Sunday said that it was cutting production of its full-size pickup truck Tundra at its San Antonio, Texas, plant by about 40 percent this month. In China, Toyota on Monday halted lines at its factory in Guangzhou due to parts shortages. The US firm jointly operates the facility with Guangzhou Automobile Group Co (廣汽集團); the plant has produced upward of 300,000 vehicles annually in recent years, including the Camry. The lines resumed operation on Tuesday eve as the necessary parts were able to be procured, spokeswoman Shino Yamada said. Honda Motor Co is also considering cutting production due to the impact of the chip shortage in China. “We
Samsung Electronics Co on Thursday unveiled the first Galaxy S smartphone with a stylus for onscreen work called the S Pen, more than a month ahead of its usual annual release schedule for models of its flagship compact phone. Analysts have said offering a stylus within the Galaxy S21 series might signal the South Korean tech giant would merge the S line with its other premium smartphone range, the Note, already equipped with a note-taking stylus. That could free up resources for Samsung to push its separate range high-end foldable phones as key mass products rather than niche devices. Samsung is also looking to grab market share after China’s Huawei Technologies Co (華為) was hit with US sanctions that restricted its supply and hurt sales, analysts have said. An early launch is a likely tactic to capitalize on Huawei’s woes, Counterpoint Research analyst Sujeong Lim said. New iterations of the Note typically come in the second half of the year. Lim said Samsung faces intense competition in the high-end category from Chinese vendors amid growing demand for devices that can be used for remote work amid the COVID-19 pandemic, as well as play like videogaming. In the US, the Galaxy S21 price range starts at US$799.99, the S21 Plus version at US$999.99 and the S21 Ultra at US$1,199.99. The series is to be widely available starting on Jan. 29 through Samsung.com, carriers and retailers online, the company said. With the most advanced processing chip in any Galaxy device, the S21 is 5G compatible and designed for shooting, and viewing video and images as well as onscreen work. The top end of the range, the Ultra — the only version compliant with the S Pen stylus, which has to be bought separately — sports a four-lens rear camera that allows different angles and zoom shots. Samsung plans to offer
China is considering accepting some stranded Australian coal cargoes, an effort that would help ease a logjam of vessels that have stacked up off its coast for months. The shipments that could be cleared are those that arrived before a ban on Australian coal went into effect, said a person familiar with the situation, who asked not to be identified as the discussions are private. Deliberations are at an initial stage and any decision would need the approval of more senior Chinese leaders, the person said. The broader prohibition on Australian coal remains in place, and ideally the cargoes would be resold to buyers in other countries, the person said. China’s General Administration of Customs did not immediately respond to a fax seeking comment. The opaque nature of the Australian ban, which has never been publicly acknowledged by Beijing, makes pinpointing its start date difficult. The government was rumored to have ordered its five biggest utilities to halt Australian purchases as early as May last year, while in October, power stations and steel mills were told to stop using Australian coal. In November, Beijing ordered traders to halt purchases of a raft of Australian commodities, including coal. Relations between the two trading partners have deteriorated since Huawei Technologies Co (華為) was barred from building Australia’s 5G network in 2018. Most of the stranded coal is the type used to make steel, while a smaller portion is used for power generation, according to data intelligence firm Kpler. About 70 ships are waiting to discharge, according to shipping data compiled by Bloomberg. China has had to contend with record prices for both types of coal this winter. The worst winter freeze in decades has driven heating demand to an all-time high, and thrown the nation’s energy markets into tumult. At the same time, Chinese steel mills are churning out
GLOOMY SKIES: While the 2.6 percent monthly decline was smaller than expected, analysts said the UK was still likely to see a double-dip recession
The UK economy shrank in November for the first time since the initial COVID-19 lockdown last spring, hit by a tightening of social-distancing rules. The 2.6 percent monthly decline was much smaller than most analysts expected — a Reuters poll had pointed to a 5.7 percent contraction — but several economists said the nation was still likely to suffer a double-dip recession. The British economy, which shrank more sharply than any other major advanced economy in the first half of last year, is now 8.5 percent smaller than it was before the start of the COVID-19 pandemic in February. “It’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face,” British Chancellor of the Exchequer Rishi Sunak said. However, the rollout of vaccines in Britain — which has been faster than elsewhere in Europe — was a reason to be hopeful, Sunak said. Several economists warned that Britain was still on course for renewed recession, with the economy likely to shrink in both the final quarter of last quarter and the first three months of this year. “A third lockdown means that a double-dip recession in the first quarter of this year may be inevitable, particularly if the current post-Brexit disruption persists through the quarter,” British Chambers of Commerce head Suren Thiru said. The scale of the hit to the economy in November was much smaller than in the first lockdown last year, something the UK Office for National Statistics (ONS) attributed to businesses adjusting to social-distancing rules and schools remaining open. However, with a third, tougher lockdown now in place, and the impact of the nation’s new, less open trading relationship with the EU also a drag on business, the country is facing major challenges early this year. Bank of England Governor Andrew Bailey this week said that
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