Renewables/GOES MMI: Glencore signs cobalt supply deal with Samsung

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The Renewables Monthly Metals Index (MMI) held flat for a February MMI reading of 98. (Editor’s Note: This report also includes analysis of grain-oriented electrical steel.)

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Glencore signs long-term cobalt supply deal with Samsung

Miner Glencore announced Monday that it has signed a five-year cobalt supply deal with Samsung SDI.

The miner will supply up to 21,000 tons of cobalt contained in cobalt hydroxide between 2020 and 2024, sourced from Glencore’s Democratic Republic of the Congo (DRC) operations.

“We are pleased to extend our partnership with Samsung SDI by entering into this long-term cobalt supply agreement,” said Nico Paraskevas, Glencore head of copper and cobalt marketing. “This demonstrates a further continuation of Glencore’s cobalt hydroxide marketing strategy to secure long term supply agreements with key players in the lithium-ion battery supply chain. This also illustrates Glencore’s important role in supplying the materials that enable the energy and mobility transition and Glencore’s commitment to responsible production.”

In recent months, Glencore also announced supply deals with GEM Co. Ltd. and SK Innovation.

Earlier this month, Glencore reported 2019 cobalt production of 46.3 kt, which marked a 10% increase from 2018’s 42.2 kt, primarily a result of a ramp-up at its Katanga operation in the DRC.

Coronavirus and cobalt

In recent weeks, we’ve weighed in on the coronavirus and its impact on metals markets, including on iron ore and copper. MetalMiner’s Belinda Fuller also expounded on the issue in her Copper MMI report this week.

As for cobalt, the scaling down of Glencore’s Mutanda operation will be offset by the coronavirus’ impact on demand, Reuters reported.

Reuters noted the cobalt price has pushed up 10% since the start of the year, but demand has of late taken a hit on account of the closures of factories that manufacture batteries used in electric vehicles (of which cobalt is a vital component).

GOES

The GOES MMI, the index tracking grain-oriented electrical steel, fell four points this month for a February reading of 183 after a 30-point increase the previous month.

The GOES price fell 1.9% month over month to $2,526/mt.

In December 2019, AK Steel, the lone U.S. producer of GOES, announced Cleveland-Cliffs planned to acquire it (MetalMiner Executive Editor Lisa Reisman broke down the news.)

The deal, however, is still pending. This week, the two firms announced an “earlier-than-expected consummation of the Merger on March 13.”

Meanwhile, Germany’s Thyssenkrupp, also a GOES producer, has put its profitable elevator business on the market, with a bid deadline recently coming and going.

In September, MetalMiner’s Stuart Burns outlined some of the challenges Thyssenkrupp faces, as it recently left the blue-chip DAX index.

“The latest prospect is the elevator division,” Burns wrote in September of possible plans by Thyssenkrupp to boost itself amid its struggles. “Even though it may be the smallest of the quartet that makes up two-thirds of the world’s lifts — along with U.S. firm Otis, Swiss group Schindler and Finland’s Kone — Thyssenkrupp is equally well-regarded.”

This week, Reuters reported Schindler board member Alfred Schindler indicated if Thyssenkrupp and Kone agreed to merge their elevator businesses, the Swiss firm would launch an antitrust case in the courts to prevent it.

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Actual metals prices and trends

Japanese steel plate rose 0.7% month over month to $812/mt as of Feb. 1. Korean steel plate fell 1.9% to $535.30/mt. Chinese steel plate fell slightly to $605.45/mt.

U.S. steel plate fell 5.2% to $722/st.

Chinese cobalt cathodes rose 0.4% to $95,863.04/mt.

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