Environment

Today, in MetalCrawler: a federal regulator urged replacement of rail tank cars, but just wants new tank cars and doesn’t want to replace them with pipelines. Alcoa, Inc., insists it’s now a “multi-materials” company and not just an aluminum producer, and construction associations have petitioned the federal government for guaranteed costs for change orders on federal projects.

NTSB Wants New Rail Cars

Federal officials Monday called for the urgent replacement of railroad tank cars to make them more fire-resistant in the event of an incident like last month’s fiery derailment near Galena, Ill., of a train hauling crude oil.

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The current rail car fleet should be aggressively replaced or retrofitted with better protection against heat from fires and by increasing the capacity of pressure relief devices, the National Transportation Safety Board recommended.

“We can’t wait a decade for safer rail cars,” NTSB Chairman Christopher Hart said in a statement. “Crude oil rail traffic is increasing exponentially. … The industry needs to make this issue a priority and expedite the safety enhancements, otherwise, we continue to put our communities at risk.”

The New Alcoa

Alcoa is at the forefront of two trends changing the metals industry, the Wall Street Journal reports, both of which will be on display Wednesday, when the company is expected to report earnings of 25 cents a share, up from nine cents a year earlier. In January, it reported its best full year results since 2008.

The first trend: an eastward shift in raw production, driven by economic growth in Asia and changes in relative costs.

The second: a turn by metals companies toward making parts for fast-growing markets like aerospace and automotive, which are more profitable than making raw metal.

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Georgetown, Texas, a community of 50,000 people 25 miles north of Austin is poised to become the first city in the Lone Star state to receive 100% of its power from renewable sources.

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Thanks to investments in its grid by the state government, most Texas cities enjoy an electricity market that is deregulated, meaning customers have the right to choose from a variety of providers and plans. In Houston there are more than 70 plans that offer energy from entirely renewable sources.

In Georgetown, the city utility company has a monopoly but can still choose the city’s provider like individuals elsewhere in Texas. When its staff examined their options last year, they discovered something that seemed remarkable, especially in Texas: renewable energy was cheaper than non-renewable. In February, city officials finalized a deal with SunEdison, a multinational solar energy company. It means that by January 2017, all electricity within the city’s service area will come from wind and solar power.

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Spring has sprung here at MetalCrawler and beleaguered commodity markets are hoping for a renewal themselves as steel production is predicted to fall in Japan, the once-mighty aluminum industry in Brazil faces another shutdown and new shipment rules could cause even larger back-ups in transportation of North Dakota oil.

New Oil Shipment Rules

Following a spate of explosive accidents involving North Dakota crude oil, the state on Wednesday began requiring companies to remove certain liquids and gases from oil before it’s loaded onto rail cars, a move industry and state regulators believe will make for safer shipments.

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The rules, developed over the past year, require all crude from the oil patch to be treated by heat or by pressure to reduce its volatility before being loaded onto train cars. The new rules require North Dakota crude to have vapor pressure below 13.7 pounds per square inch, which is less than the 14.7 psi threshold national standard recognized as stable. Winter-blend gasoline that contains 10% ethanol is rated at 13.5 psi.Industry officials initially balked at the regulations, saying the state’s crude was being unfairly singled out and the new standards would slow production and increase costs.

Japanese Steel Production Falls to 6-Year Low

Japan’s crude steel output for April-June is forecast to drop 7.8 percent from a year earlier to the lowest for the quarter in six years, the Ministry of Economy, Trade and Industry (METI) said on Thursday.

The fall would mark the latest in a series of signs of economic slowdown, clouding the outlook for Prime Minister Shinzo Abe’s drive to reflate the economy and spurring calls for more monetary stimulus.

South American Aluminum Production Wanes

US aluminum producer Alcoa announced this week the full shuttering of its Alumar smelter in Brazil.

Alcoa and minority partner BHP Billiton curtailed two potlines at the 440,000-metric-tons-per-year plant over the course of 2013 and 2014. Now the third and last will also be mothballed.

It’s the fifth, and largest, Brazilian smelter to be shuttered since 2009 – a major retreat for what was once one of the world’s top producing countries.

Reuters’ Andy Home writes that’s it’s symptomatic of a broader decline in primary aluminum production in South America.

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US Sen. Lisa Murkowski, (R-Alaska), last week, introduced the American Mineral Security Act of 2015, a bill that promises “to prevent future mineral supply shocks and boost the competitiveness of our energy, defense, electronics, medical, and manufacturing industries.”

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The AMSA would require that the director of the US Geological Survey establish a list of minerals critical to the American economy and provide a comprehensive set of policies to address issues associated with their discovery, production, use, and reuse. It also would require that the federal government establish a methodology for the designation of critical minerals, based on potential supply disruptions and the importance of their use, and require the list to be reviewed and updated at least every two years.

Critical Minerals

There are also changes in permitting, the Federal Register process and the bill would extend an executive order issued by President Obama in 2012, regarding the permitting of important infrastructure projects, to mines that produce critical minerals and critical mineral manufacturing projects. The full bill is available online at the Senate website.

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Some countries in Europe already have negative interest rates, Denmark and Switzerland’s are at -0.5% and -0.75% respectively, charging clients for the pleasure of holding their money, in an effort to stave of safe-haven status vs the euro.

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Royal Bank of Scotland Research is not predicting base rates in euro-land or Japan to rise from 0.1% in 2015 or 2016, and in the UK they are predicted to only rise from 0.5 to 1.0% next year. That is a reflection of an almost deflationary environment and such weak growth that the risks to inflation are non-existent.

Chinese rates are predicted to fall from 6% last year to 5.6% this year and 5.3% in 2016. Likewise, India, which could fall to 7% this year from 7.8% last year, will likely only rise to 7.3% in 2016. Far from just being faced with the risk of a Greek exit, the European Union is facing exceedingly weak growth in France and Italy, the currency bloc’s second- and third-biggest economies.

Weak Growth Throughout

These are situations that would be more readily addressed by a significant loosening of policy in Germany to boost demand rather than Europe-wide quantitative easing, but that’s another matter. The risk is as much political, both Spain and Portugal have elections this year with aggressive minority parties keenly watching developments in Greece, as economic.

The EU can’t afford to allow Greece to default on its debts because it will immediately fuel demands from other quarters for the same treatment. Even France is being sanctioned by the EU for repeatedly exceeding its 3% of GDP budget deficit limits. France, too, would love to be let out of the German-led fiscal straitjacket constricting some European markets.

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Today in MetalCrawler we’re hoping that if we don’t acknowledge the Monday, the Monday won’t acknowledge us. President Obama signed an executive order limiting carbon dioxide emissions for the federal government, Chilean copper production went down and Federal Reserve Chairwoman Janet Yellen warned of economic stagnation.

Federal Government Emissions Limit Cut

President Obama signed an executive order calling for the federal government to cut its greenhouse gas emissions 40% from 2008 levels over the next decade.

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The action also calls for an increase in the share of renewable energy in the federal government’s electricity supply to 30% during that same period. In step with the President’s action, federal suppliers including Honeywell, IBM, General Electric, and other major US firms are pledging to reduce their own carbon footprint by 5 million metric tons over the next 10 years compared with 2008 levels.

Chilean Copper Production Falls

World No. 1 copper producer Chile produced 447,810 tons of copper in February , a 1.1% decrease from a year earlier, due to plant maintenance at a key project, the government said on Monday.

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When China’s Ministry of Commerce announced that it had scrapped quotas restricting exports of rare earth minerals and would replace them with a system of export licenses many thought this would open up new markets to previously tightly regulated Chinese REs.

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The quotas had been in place since 2000. It was thought to be positive news for RE consuming nations such as Japan, the US and Taiwan. But the last word on that may be tied in to the announcement of yet another new RE policy by Beijing, likely to come in mid-2015.

Not So Friendly Neighbors

India and Japan, two nations China has had a strained relationship with when it comes to REs, have teamed up to jointly explore new rare earths production.

As reported by MetalMiner, India is miles behind market leader China in the RE production department, yet is the second-largest producer of the rare minerals contributing 2,800 metric tons per year to domestic and world markets. China, on the other hand, produces 105,000 mt.

According to official figures revealed by the Government of India (GoI) in its parliament earlier this month, the total production of RE in India by state-owned Indian Rare Earths Limited (IREL) between 2009 and 2014 was 310.145 mt, and the total sale in the same period was 285.90 mt.

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MetalCrawler brings the latest metal news to you before the ink dries on government decrees from as far away as China and India.

Jindal Loses Coal Block Bids

Shares in Jindal Steel and Power Ltd. tumbled on Monday over concerns that the company’s ability to feed its power plants after it lost bids for three coal mines auctioned by the government.

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Stock of the company, controlled by former Indian lawmaker Naveen Jindal, fell as much as 14.9% before ending down 6.2%, while the benchmark BSE Sensex fell 0.24%. The company said it will take India’s government to court over the decision to reject the bids.

Without Domestic Demand China’s Steel Industry Wants to… Expand?

China’s steel mills are still looking to the export market as domestic demand remains tepid. Beijing’s answer for the beleaguered industry? Foreign acquisitions.

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A surprise announcement by the International Energy Agency (IEA) last week could be good news for energy intensive industries worldwide.

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Firms have been investing billions in energy efficiency and emissions reduction technology yet the targets seem to be ever ratcheted lower in spite of gains made, but a report to be published on June 15 will show that for the first time in 40 years emissions of carbon dioxide did not rise last year.

According to a Financial Times article after growing at an average of 2.4% over the last decade in 2014 the global economy grew 3%, while the amount of CO2 pumped out remained at the 2013 level of 32.3 billion tons. There have only been three times in four decades when emissions fell or stopped rising, the FT quotes the EIA as saying. After the oil price shock and US recession in the early 1980s; in 1992 after the collapse of the former Soviet Union; and in 2009 during the global financial crisis.

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MetalCrawler scours the web for the latest metal news.

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This Monday morning we have the latest on Canadian oil sands, a construction dispute over insurance and copper’s price recovering in London.

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