Minor Metals

Thanks to fees from its state cap-and-trade law, Northern California homeowners will soon start receiving completely free crystalline silicon photovoltaic solar panels.

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Oakland nonprofit Grid Alternatives is using $14.7 million raised through the state’s cap-and-trade system to install the panels in lower income neighborhoods for free. The fees were paid by industries whose emissions exceeded the state "cap" set by the new law. The fees were donated by state to Grid and the money came out of the Greenhouse Gas Reduction Fund (GGRF), also established by the cap-and-trade law.

Silicon was the biggest mover this week on our renewables MMI, as well.

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Rare earth prices are falling because the metals used in magnets, batteries and electronics are not so, well, rare, these days. That availability has come with a major environmental price.

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China has lost control of its smaller, unauthorized rare-earth producers and, without export quotas, those metals are finding their way to foreign markets.

In addition to upsetting markets, most of unauthorized producers also have minimal environmental controls and even government-approved factories dump acid-rich, radioactive waste water into giant, leaky, unlined ponds which are threatening to pollute the Yellow River, a source of water for 150 million people.

Clean Earths

Molycorp, by contrast, has cleaned up its act and spent billions restoring its Mountain Pass, Calif., project, replacing its extraction systems and securing its mines.

Molycorp told Fortune it is building a rare earth supply chain that does not produce the kind of horrifying environmental damage other mines do. That means everything from using a process called chloralkali to use recycled water to separate the ore-less bad than chemicals, apparently-to generating power on-site.

The company is also using a new process to seal and bury its toxic tailings. Before reopening Mountain Pass, Molycorp used to dump its tailings in a slurry behind a dam. Now it uses a high-pressure system to squeeze out most of the water, leaving behind a "paste" that will be reburied in what's essentially a 90-acre landfill just west of the pit mine.

Molycorp was recently selected as a 10-year provider of rare earths to Siemens AG for its wind turbine business and both companies touted its clean supply chain as a reason behind the move. If Molycorp, and other US-based rare earths miners, want to compete with the glut of Chinese products the way they will have to distinguish themselves is through supply chain accountability.

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Our May MMI Report, tracking ten major metal price points, came out this week.

Pool 4 Tool’s Automotive SRM Summit

As always, the MMI reflects the global market (BLS indexes by default only include US data, but that may or may not be representative of underlying global price trends) and metal prices often depend upon the underlying demand for various industries (steel prices relate to construction industry activity, for instance).

Most of our readers are buyers of aluminum, copper, stainless steel, raw steels, rare earths, automotive, construction, renewables and grain-oriented electrical steel… but some go for the VERY minor metals.

For these special users, we provide the fictitious MMI. Serving all your needs for adamantium, Rearden metal, kryptonite ore and vibranium. We recently had to move unobtainium off the list because it’s information was just too hard to obtain to keep listing.

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The monthly rare earths MMI® registered a value of 27 in May, a decrease of 6.9% from 29 in April.

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The jump that much of the market felt after being featured on "60 Minutes" was gone this month and Molycorp reported another net loss for Q1.

Molycorp Needs More Funding

Molycorp reported higher production volumes in the first quarter of 2015 at its Mountain Pass, Calif., rare earth facility of 1,479 metric tons of rare earth oxide equivalent. This was an 11% increase over the Q4 2014 production of 1,328 mt.

Molycorp reported Q1 2015 product sales volume of 3,436 mt on a consolidated basis, a 9% increase over the Q4 2014. Net revenues for the quarter were $106 million, an 8% decrease from the Q4 2014.

The Greenwood, Colo.-based rare earth miner reported a net loss of $0.42 per share and a reported a net loss of $0.28 per share for the quarter on an adjusted non-GAAP basis, which compares to an adjusted non-GAAP loss of $0.39 in the Q4 2014.

Molycorp was selected by Siemens AG to supply rare earths over the next 10 years for high-power, sintered rare earth permanent magnets used in Siemens' wind turbine generators, but it's unlikely that the proceeds from that deal will help its financial position this year. Molycorp reiterated that it would need more financing to continue operations.

Persistent Low Prices

The problem for Molycorp is much the same as that for the entire rare earths industry: low prices. China ending export quotas on the elements has not yet resulted in higher prices and companies such as Molycorp, Texas Rare Earth Resources and Australia's Lynas Corp. are feeling the pinch as a result. Many high-tech buyers of the magnets and oxides in the rare earths ground have moved on to other sources.

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Like most of the US solar industry, I have been watching for the tipping point in silicon photovoltaic panel installation and energy costs since the early 2000s.

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It's long been-promised by proponents of renewable energy, so I was a bit skeptical in December when it was again predicted to cause a disruption taking market share away from coal and other traditional energy providers in the US market and cause mass adoption of solar as a home heating/cooling and electricity technology.

I also don't immediately buy into the ability of the EPA Clean Power Plan to convert those millions of consumers to home-based solar generation purely based on changes in law that mainly effect producers and not consumers of energy.

Classic 'Solar Tipping Points'

Some great moments in the solar tipping point so far:

  • In 2012 ThinkProgress gave us three handy charts which showed why solar "has hit a tipping point."
  • In 2011 the tipping point supposedly happened for 3rd party residential panel ownership in California, the largest adopter market state... and that did nothing for material costs or even made a speed bump in demand for the dirtier technologies.
  • Even back in 2005, silicon crystalline solar photovoltaic panel technology "hit a tipping point" to supposedly make solar a much more viable energy generation technology. 10 years ago. Yet the demand for materials has still not risen much ever since we began tracking prices in 2012.

The monthly renewables MMI® registered a value of 60 in May, a decrease of 1.6% from 61 in April. The decrease is on par with the generally flat "terse investor frown" trend the index has tracked since its inception so, while it's not disconcerting, it doesn't give great hope for prices of raw materials for silicon panels or wind turbines to rise in the short term, either.

No Increased Demand for Raw Materials

A lot of the metal inputs of these technologies are suffering their own price problems due to market gluts that have nothing to do with solar or wind adoption, particularly steel plate.

The most promising development for solar generation is that it's now cheaper than gas in 47 states, but there's no evidence that that will spur on solar adoption in a place like, say, Minnesota where it's dark much of the day and snowmelt will ruin your roof-mounted panels every winter.

Silicon, itself, is rising in both demand and price as semiconductor and energy use is definitely on the upswing in mature markets. The adoption problem continues to be the scale of the industry. Powering California, Texas, the rest of the West and Florida will not deliver the amount of panels on roofs needed for consistent power generation for utilities and grid owners to divest in backup generation technology. It also won't deliver the amount of homes and commercial businesses generating electricity necessary to push raw material prices up significantly.

Paypal, SpaceX, Cars, Why Not the Solar Tipping Point?

Enter Elon Musk, sensing a business opportunity, and this month's announcement from Tesla Motors that it's expanding its li-ion battery business to homes and commercial properties interested in using a modified version of the automaker's batteries to store solar power generated during the day for their homes' use at night. Hey guys, another tipping point!

It's true that Tesla's advance is economical, necessary and fills a major need in the market: the ability to store energy collected from the panels at night in places where daylight doesn't extend beyond 8 PM. It could also resolve the orientation battle now being waged in California between utilities and homeowners by taking a decision on where stored power goes out of utilities' hands.

Actual Renewable Materials Prices

Still, as we are cautious about the markets we cover, I will wait to see if Tesla's battery business takes off and provides a boost for silicon solar demand. We've been promised a tipping point before. Now, how about that SpaceX IPO, Elon?

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CloudDDM is currently operating 100 high-tech 3D printers running 24 hours, 7 days a week in UPS’ Global Supply Chain Solutions Campus in Louisville, Ky. CloudDDM’s founder, entrepreneur Mitch Free said just three employees: one for each of the eight-hour shifts, can oversee the entire operation. UPS handles packaging and shipping of parts and prototypes created using CloudDDM. Free said the facility can turn around orders that typically take a week to complete in 24 hours.

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“We offer a strong value proposition to design teams who need to iterate quickly, those who produce products in low volume, those who want to customize products on demand as well as the spare parts replacement market,” Free said. “Our customers require high-quality parts with structural integrity, the consumer-grade 3D printers would not be adequate for their needs. Further, our customers trust us to make sure their proprietary data and the details of their next generation product are secure.”

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In January 2015, Saudi Arabian company ACWA Power surprised industry analysts when it won a bid to build a 200-megawatt solar power plant in Dubai that will be able to produce electricity for 6 cents per kilowatt-hour.

Why Manufacturers Need to Ditch Purchase Price Variance

That price was less than the cost of electricity from natural gas or coal-fired power plants, a first for a solar installation. Electricity from new natural gas and coal plants would cost an estimated 6.4 cents and 9.6 cents per kWh, respectively, according to the US Energy Information Agency.

Technological advances, including crystalline silicon-solar photovoltaic panels can now convert higher percentages of sunlight into energy and have made solar panels more efficient. As a result, we may be seeing a long-awaited rise in the price of silicon used for the panels, microchips and semiconductors. The week's biggest mover on the weekly Renewables MMI® was the price of silicon, which saw a 7.4% increase.

Last week, manufacturer SolarCity began construction on a $900 million, 1 million-square foot PV panel factory in Buffalo, as well.

The price of silicon rose 7.4% on the renewables MMI last week.

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This week, the UK’s Metalysis and GKN Aerospace announced a bold, new process that’s a significant step forward in the adoption of 3D printing/additive manufacturing for aerospace. The advance will allow users to essentially sinter titanium from rutile powder, a process that previously could be accomplished with only lighter metals.

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The cost of the powder in 3D parts makes up roughly 50% of the final cost so a significant reduction in powder costs could be a major spur to the adoption of such technology in more applications and in industries beyond aerospace and medical devices, such as automotive.

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I always think it harsh, particularly for those of us sitting in northern Europe often under leaden skies, that the Middle East is not only blessed with vast reserves of cheap and easy to extract oil and natural gas, but even more limitless supplies of sunshine.

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When the oil runs out they will become the powerhouse of the world again, but this time generating electricity. True sandstorms in desert areas are a source of considerable maintenance and repair cost, but clearly aren’t a major hindrance as solar and wind farm investments have boomed in 2014 driven increasingly by economics, not subsidies.

Japan and China Investing in Renewables

After all the hand wringing we have done over the years about subsidies paid to wind farms, it comes as a welcome development to report that some 95 gigawatts of increasingly economic renewable generating capacity was created in 2014 at a cost of $270 billion, led by China and Japan who combined, invested $75 billion in solar power.

This is the largest level of new renewable capacity (not including hydro-electric) in one year, at least in terms of GW of capacity. The previous higher spending year, 2011, resulted in lower levels of installed capacity because costs were so much higher then.

Lower Costs

According to the Financial Times, equipment costs have fallen 75% since 2009 while large solar construction and connection costs have fallen by up to 65% in the last four years and solar panel efficiencies are rising making such projects increasingly attractive.

Thierry Lepercq, chairman of Solairedirect, a French company that has 57 solar parks built or under construction around the world said, “We’re generating power at lower prices than other energy sources in Chile, India and South Africa.”

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MetalCrawler brings you warning of more domestic steel producer layoffs and China released new rare earth quotas.

More Layoffs Coming

U.S. Steel Corp. could slash 1,400 jobs as it continues to grapple with a difficult market.

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The Pittsburgh-based company notified workers last week, mostly at plants in Texas and Arkansas, that they could be out of a job as early as June 17, U.S. Steel spokeswoman Sarah Cassella said Monday.

The potential cuts include 579 employees in Lone Star Tubular Operations; 166 in Offshore Operations Houston; 255 at Wheeling Machine Pine Bluff in Arkansas; and 404 managers throughout its tubular operations.

China Sets Rare Earth Quotas

China’s Ministry of Industry & Information Technology recently released rare earth production quotas for 2015.

Rare earth oxide (REO) mining quotas were set at 52,500 metric tons while smelting and separating limits came in at 50,050 mt.

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