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Sources say BYD has slowed production and delayed capacity expansion in China factories.
Two people familiar with the matter said that BYD, the Chinese electric vehicle leader, has slowed down its production and growth pace by reducing shifts in some factories in China. It also delayed plans to add more production lines. These decisions could be a sign of BYD's sales growth slowing down, even though it has offered deep price reductions in China's fierce auto market. BYD has reduced production by at least one third at its factories and cancelled night shifts, according to sources who declined to name themselves because it is a private matter. One person said that BYD also had suspended plans to build new production lines. BYD has seven factories in China and sold 4,27 million vehicles last year. It has set a target of a nearly 30% increase in sales this year to 5.5 millions. It was not possible to determine the exact size of the reduction in production and the suspension of expansion, nor how long the measures might last. One source said that the measures were taken to save costs while another said that they were implemented after sales did not meet their targets. BYD didn't immediately respond to an inquiry for comment. After announcing its production reduction measures, shares of Hong Kong listed BYD lost up to 2.6% of their earlier gains and dropped by nearly 1% on Wednesday afternoon. The China Association of Automobile Manufacturers reported that BYD’s production growth had slowed in April and May to 13% and 0.2 percent year-on-year, respectively. This was the lowest pace since February 20, 2024, when factory operations were disrupted for a week by the lunar New Year holiday. The data revealed that BYD began increasing monthly production in the second quarter of 2023 and 2024. The trend is different this year. Average output in April-May was 29% lower than the fourth quarter in 2024. BYD became the largest EV manufacturer in the world within a few short years, by increasing production and accelerating the release of new models that are more affordable. The recent price reductions, which brought the price of its lowest model down to 55,800 Yuan ($7.800), led to a wider sell-off in Chinese automobile stocks, and new price cuts by rivals. In a survey conducted by China Automotive Dealer Association, in May, BYD dealers had an average of 3.21 months' worth of inventory, the most among all Chinese brands, while the industry-wide inventory level was 1.38 months. Last month, the government-owned media reported that a large BYD dealership in eastern Shandong province had gone out of business. At least 20 of their stores were found deserted or closed. Early in June, as inventory levels increased, the China Auto Dealers Chamber of Commerce called on automakers not to dump too many vehicles on dealerships but to set "reasonable production targets" based on performance. The group claimed that intense price wars are causing cash flow to be squeezed and driving profits down. Chinese auto dealers on Sunday urged automakers that they pay cashback incentives to their customers within 30 days in order to ease financial pressures. In recent months, Chinese regulators have increased their scrutiny on the auto industry due to the intensifying price competition. This practice, which has been going on for years, has caused suppliers and automakers to suffer. Chinese automakers now look to overseas markets in order to boost sales and counter the weakening momentum of their home market. BYD has sold around 1.76 million cars in the first five months this year. Around 20% of these vehicles were exported. $1 = 7.1684 Chinese Yuan Renminbi (Reporting and editing by Zhuzhu cui, Zhang Yan, and Brenda Goh.
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Iron ore prices continue to fall on the back of rising supplies and a slowdown in demand
The price of iron ore futures fell for the second consecutive session on Wednesday. This was due to a combination of a slowdown in China's demand and an increase in shipments from Australia. The day-end price of the most traded September iron ore contract at China's Dalian Commodity Exchange was 702.5 yuan (US$97.97). As of 0728 GMT, the benchmark July Iron Ore traded on Singapore Exchange had fallen 0.25% to a ton price of $92.75 Mysteel, a Chinese consultancy, said that the total volume of iron-ore shipments by top suppliers Australia, Brazil, and South Africa increased to 30,1 million tons between June 16-22. This is a record for ONE YEAR. In a recent note, ANZ analysts stated that iron ore prices continued to decline due to signs of stable supply. ANZ has also noted that the construction industry typically slows down during summer. This will likely lead to a further decline in Chinese imports of Iron Ore. Rio Tinto, the largest iron ore producer in the world, received approval from Australian government for its Hope Downs 2 Project. The joint venture project between Rio Tinto, Hancock Prospecting and others will have a production capacity of 31 millions tons per year. Rio Tinto expects to spend more than 13 billion dollars on new mines and plant over the next 3 years. Meanwhile, the British government is expected to impose tougher-than-expected trade caps on steel as the country attempts to support its domestic industry amid a global oversupply. Coking coal and coke both rose in the DCE, by 0.75% each. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Wire rod and hot-rolled colums fell 0.58% while stainless steel rose 1.25 percent.
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Copper prices rise on weaker dollar and tentative Middle East truce
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw copper prices rise on Wednesday. This was due to a weaker dollar and an apparent ceasefire between Iran & Israel. As of 0701 GMT the LME's three-month contract for copper increased by 0.6%, to $9,728.5 a metric ton. The SHFE's most-traded contract for copper also rose by 0.47%, to 78,810 Yuan ($10990.56). Israel has said it will take strong action against Iranian missiles that were launched after U.S. president Donald Trump declared an end to hostilities. The U.S. Federal Reserve chair Jerome Powell has said nothing about the interest rate reduction, but the traders and investors have been waiting for some clear signals. Even after Powell testified before the U.S. Congress, he said that many Fed officials expect inflation to accelerate soon and that the central banks is currently not in a hurry to ease borrowing rates. Dollar-priced materials are more appealing to buyers who use other currencies because of the softer U.S. dollar. The SHFE lead price reached 17,200 yuan per ton on Wednesday and the LME lead price touched $2,030. Both were at a three-month peak. In preparation for the summer months' better demand for lead, China's lead-smelters are increasing their offers for used electric bicycle batteries. This helps to boost primary lead prices, according to a Shanghai metals analyst. In China, e-bikes tend to have their batteries replaced more often in the summer because of the shorter lifespan. LME aluminium dropped 0.39% to a price of $2,569 per ton. Tin gained 0.78%, reaching $32,570. Zinc gained 0.71%, reaching $2,700.5. Nickel rose 0.6%, to $15,010. SHFE Nickel gained 1.17% at 118,600 Yuan. Zinc gained 0.57% at 22,045 Yuan. Aluminium gained 0.12%, and tin fell 0.07%, to 263,000 Yuan. Click or to see the latest news in metals, and other related stories. Data/Events (GMT). 1000 France Unemp SA Class-A May 1400 US new home sales-units May ($1 = 7,1707 Chinese Yuan) (Reporting and Editing by Sherry Phillips, Rashmi aich and Hongmei Li)
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Tesla's European Sales Slump for Fifth Month
Tesla's European new car sales fell by 27.9% from a year ago in May, even though sales of fully-electric vehicles in the region jumped by 27.2%. The revised Model Y has yet to show any signs of reviving Tesla's fortunes. The European Automobile Manufacturers Association's (ACEA) data showed that overall car sales in Europe increased by 1.9%. Plug-in hybrids grew the most, followed by cars using alternative fuels. Why it's important Tesla's European Sales have fallen for the fifth consecutive month as customers opt for cheaper Chinese EVs, and in some cases protest against Elon Musk. Tesla's European Market Share dropped from 1.8% to 1.2% in just one month. The new Model Y will revamp the company's aging model range, as Chinese and traditional automakers launch EVs in a rapid rate amid trade tensions. According to data released by Jato Dynamics on Tuesday, Chinese manufacturers maintained their strong growth last month in Europe despite EU tariffs against Chinese EVs. They sold 65,808 vehicles and doubled their market share from 5.9% to 5.9%. BYD sold nearly as many cars as Tesla in May. Outselling It is April. By the Numbers ACEA data show that new vehicle sales in May in the European Union (EU), Britain, and the European Free Trade Association increased to 1,11 million vehicles. This follows a decline of 0.3% in April. The registrations of SAIC Motor, a Chinese state-owned company, and BMW in Germany rose by 22,5% and 5,6% respectively. Mazda's registrations fell by 23%. Total car sales in the EU have declined by 0.6% this year. This is despite the growing demand for EVs. Registrations of battery-electric cars (BEV), hybrid-electric vehicles (HEV) and plug-in hybrids (PHEV) have increased by 26.1% respectively. In May, the EU sold 58.9% more BEVs than HEVs or PHEVs. This is up from 48.9% by May 2024. In the EU's largest markets, sales of new cars in Spain and Germany increased by 18.6% and 1,2%, respectively, whereas in France and Italy, they fell by 12.3%, and 0.1%. Registrations in Britain were up by 1.6%.
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Sources say BYD has slowed production and delayed capacity expansion in China factories.
Two people familiar with the matter said that BYD, China's electric vehicle leader, has slowed down its production and growth pace by cutting shifts in some factories in China. It also delayed plans to add more production lines. These decisions could be a sign of BYD's sales growth slowing down, even though it has offered deep price reductions in China's fierce auto market. BYD has reduced production by a minimum of a third at its factories and cancelled night shifts, according to sources who declined naming themselves because it is deemed private. One person said that BYD also had suspended plans to build new production lines. BYD has seven factories in China and sold 4,27 million vehicles last year. It has set a target of a nearly 30% increase in sales this year to 5.5 millions. It was not possible to determine the exact size of the reduction in production and the suspension of expansion, nor how long the measures might last. One source said that the measures were taken to save costs while another said they were implemented after sales did not meet target. BYD didn't immediately respond to an inquiry for comment. The China Association of Automobile Manufacturers reported that BYD’s production growth had slowed in April and May to 13% and 0.2 percent year-on-year, respectively. This was the lowest pace since February 20, 2024, when factory operations were disrupted for a week by the lunar New Year holiday. The data revealed that BYD began increasing monthly production in the second quarter of 2023 and 2024. The trend is different this year. Average output in April-May was 29% lower than the fourth quarter in 2024. BYD became the largest EV manufacturer in the world within a few short years, by increasing production and accelerating the release of new models that are more affordable. The recent price reductions, which brought the price of its lowest model down to 55,800 Yuan ($7.800), led to a wider sell-off in Chinese automobile stocks, and new price cuts by rivals. In a survey conducted by China Automotive Dealer Association, in May, BYD dealers had an average of 3.21 months' worth of inventory, the most among all Chinese brands, while the industry-wide inventory level was 1.38 months. Last month, the government-owned media reported that a large BYD dealership in eastern Shandong province had gone out of business. At least 20 of their stores were found deserted or closed. Early in June, as inventory levels increased, the China Auto Dealers Chamber of Commerce called on automakers not to dump too many vehicles on dealerships but to set "reasonable production targets" based on performance. The group claimed that intense price wars are causing cash flow to be squeezed and reducing profitability. Chinese auto dealers demanded on Monday that automakers pay cashback incentives to ease financial pressures. In recent months, Chinese regulators have increased their scrutiny on the auto industry due to the intensifying price competition. This practice has been going on for years and has caused suppliers, automakers and dealerships in the entire industry to be squeezed. Chinese automakers now look to overseas markets in order to boost sales and counter the weakening momentum of their home market. BYD has sold around 1.76 million cars in the first five months this year. Around 20% of these vehicles were exported. $1 = 7.1684 Chinese Yuan Renminbi (Reporting and editing by Zhuzhu cui, Zhang Yan, and Brenda Goh.
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Japan's Nikkei closes at a 4-month high, as shares of chip makers follow US peers higher
The Nikkei share index ended Wednesday at a record high of more than four months, as stocks related to chips followed the overnight gains made by their U.S. counterparts. After a flitting back and forth between modest gains, the Nikkei closed at 38,942.07 - its highest level since February 19. The Topix index as a whole rose 0.03% to 2,782.24 Shigetoshi kamada is the general manager of the research department at Tachibana Securities. He said that the Nikkei fluctuated between gains and losses as investors sought to profit from gains made in the previous session. Investors want to cover short positions by buying stocks as long as there are no negative news. After U.S. president Donald Trump announced a ceasefire agreement on Monday night, the Nikkei ended Tuesday higher after snapping a three-day loss streak. The truce seemed fragile. It took Israel and Iran hours to admit they had accepted the ceasefire, and both accused the other of violating its terms. Investors viewed the ceasefire as a sign that tensions were de-escalating, and the U.S. stock market rose more than 1% over night. Chip-related stocks rose, following a 3.8% increase in the U.S. Philadelphia Semiconductor Index. Advantest gained 3.32%, while Tokyo Electron rose 3.26%. These two companies were the main contributors to the Nikkei's gains. SoftBank Group, a technology investor, fell by 1.73% and weighed the Nikkei down the most. Olympus fell 10.6% after U.S. Food and Drug Administration sent out an alert about certain medical devices manufactured by the medical equipment manufacturer. Toyota Motor shares fell 1.18%. On the Tokyo Stock Exchange, more than 1,600 shares traded on its prime market rose 45%, fell 50%, and remained flat 4%.
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FT reports that EDF is considering asset sales in light of the increased push for nuclear power.
The Financial Times reported that the new head of EDF, the French state-owned utility, is considering selling some assets in order to satisfy government demands for new investments in nuclear reactors. The FT, citing sources familiar with the matter, reported that Dalkia and Edison may be among the units to be sold. The FT reported that renewable assets are also being considered, except for EDF's hydropower projects. France is the main nuclear champion in Europe, as it sources around 70% of its electricity from this source. EDF's nuclear power fleet generates about 70% of France’s electricity. Bernard Fontana, the new CEO of EDF, was appointed in March after President Emmanuel Macron lost patience with Luc Remont's former leadership due to disagreements over how to build new capital intensive nuclear reactors and provide power. The FT reported that Fontana told insiders he was looking to determine which assets were not profitable and did not match the strategic priorities of the energy group. He added that the sale might come after this review, but he had not yet decided which parts of his business should be sold. EDF didn't immediately respond to our request for comment. Could not verify the report immediately. Reporting by Rhea Rosa Abraham in Bengaluru, edited by Anil D’Silva
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UK's Babcock upgrades medium term forecast as defence needs rise
The British defence engineering firm Babcock updated its medium-term forecast on Wednesday. It expects to benefit from UK plans to increase spending on defence and energy to counter rising geopolitical instabilities. Keir starmer, British Prime Minister, pledged on Tuesday to increase overall defence and security expenditure to 5% by 2035. He cited volatility as a result of the wars in Ukraine and the Middle East, and tensions with China. Babcock, which maintains Britain’s naval fleet and builds new warships, as well as providing weapons systems and nuclear engineering, has said that it now expects an operating margin underlying of at least 9 percent in the medium-term, up from a minimum of 8% previously. This is a new age for defence. Babcock CEO David Lockwood stated in a press release that there is a growing recognition of the importance of investing in energy security and defence capabilities to both safeguard populations and drive economic growth. Babcock expects an operating margin of 8 percent for the current year. This is up from 7.5% recorded in the 12 months ending March 2025. The company announced that it would buy back 200 million pounds ($272.46 millions) of shares. Babcock shares have doubled since the beginning of this year, thanks to Britain's commitment to increase defence spending. This is a far better performance than Britain's bluechips index, which has risen by 8%.
New Zealand draft infrastructure plans outlines the need for hospitals and electricity
New Zealand released on Wednesday a draft 30 year national infrastructure plan. The plan highlighted the need for New Zealand to invest more into hospitals and electricity production, and prepare to spend even more to respond to national disasters.
The plan is designed to improve infrastructure planning and to introduce a less political approach to infrastructure investments. Critics say that the impact of electoral cycles on infrastructure investment has been costly, with large projects being affected by stop-start effects.
Geoff Cooper is the chief executive officer of the New Zealand Infrastructure Commission. He said, "We would like the National Infrastructure Plan (NIP) to provide guidance for the Government on infrastructure decisions, so that they can make informed decisions."
The draft plan stated that the country must establish affordable and sustainable financing, make building new infrastructure easier, give priority to maintaining existing infrastructure, and assess project readiness before funding.
New Zealand, while in the top 10% in terms of infrastructure spending as a proportion of its gross domestic product in the OECD, was not achieving the returns that it should.
According to the plan, to meet the demand, capital investments would need to rise from 12 billion NZ$ today to a little more than 30 billion NZ$ by 2050.
New Zealand's government announced plans to increase infrastructure in the nation. Earlier this year, it hosted a summit on infrastructure investment to encourage foreign investment.
Chris Bishop, Minister of Infrastructure, said: "The Government is committed to improving New Zealand's Infrastructure System and working with the industry and other parties to reach a consensus on what changes are needed."
The plan will be finalised by the end of this year, and the parliament will discuss it in early 2026. Reporting by Lucy Craymer, Editing by Lincoln Feast.
(source: Reuters)