Author Archives: Fouad Egbaria

General Motors’ new ARĪV Meld compact eBike. Source: General Motors

Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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This morning in metals news, the copper price has surged to its highest level in 7 1/2 months, Canada’s ambassador to the U.S. is confident the U.S.’s Section 232 steel and aluminum tariffs will be coming to an end soon and China’s state-backed Chinalco plans to sell an aluminum plant for just under $164 million.

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Copper Jumps to 7 1/2-Month High

The copper price, after a sluggish close to 2018, has surged to a 7 1/2-month high, Reuters reported.

Copper jumped 1.2% Friday, up to $6,454 per ton — its highest level since July 4, according to the report.

Canadian Ambassador to the U.S. on Section 232

It has been a year since the Trump administration went forward with Section 232 tariffs on imported steel and aluminum.

Furthermore, it’s been nearly nine months since the tariffs went into effect for NAFTA ally Canada.

Canada, along with Mexico and the E.U., initially won temporary exemptions to the tariffs; however, the exemptions expired as of June 1, 2018.

According to David MacNaughton, Canada’s ambassador to the U.S., he expects the tariffs to be removed in the next few weeks, Global News reported.

Chinalco Looks to Sell Aluminum Plant

China’s state-backed Chinalco is looking to sell its Guangzhou processing plant for $163.7 million ($1.1 billion yuan), Reuters reported.

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According to the report, Chinalco said the plant made a loss of 15.41 million yuan in 2018.

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This morning in metals news, a Brazilian governmental regulator has suspended operations at two Vale SA facilities, India’s steel production jumped 4% year over year during the April 2018-January 2019 period and a company is seeking a federal loan to bring a promised aluminum mill to Kentucky.

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Brazil Suspends Two Vale Facilities

On the heels of a fatal dam breach at miner Vale SA’s Corrego do Feijao mine in Brazil, the Brazilian mining regulator has ordered the suspension of two other Vale facilities, Reuters reported.

Activity will be suspended at the miner’s Fabrica and Vargem Grande complexes, according to the report.

Indian Steel Production

From April 2018 to January 2019, Indian steel production surged 4% year over year, S&P Global Platts reported (citing government data).

In 2018, India surpassed Japan to become the world’s second-largest steel producer, behind only China.

Looking for a Loan

According to a report by the Louisville Courier Journal, Braidy Industries is looking to acquire an $800 million federal loan to fulfill a promise to build an aluminum rolling mill in Ashland, Kentucky.

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The company is seeking to acquire the loan via the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing, which, as the report notes, hasn’t issued a loan in eight years.

According to recent research by the International Tin Association, tin could see increased use in lithium-ion batteries in the next decade.

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“ITA tracks global R&D, patents and markets for tin and has identified a strongly growing interest in tin in energy materials and technologies, including lithium-ion batteries,” the association said in a release. “Tin has a wide range of technical properties that mean its uses extend to many areas of everyday life. For the same reason, it can adapt well to meet emerging needs for new materials that can generate, store and deliver tomorrow’s energy.

Per the release, ITA has identified “nine technology opportunities for tin in lithium-ion batteries, mainly in high-capacity anode electrode materials, but also in solid-state and cathode materials.”

Lithium-ion batteries are used in a wide variety of applications, from pacemakers to cellphones.

“It is concluded that if tin does gain market share, lithium-ion batteries could grow to represent a significant new tin use in the 2025-2030 timescale,” the ITA says in its release.

The idea of turning to tin for use in lithium-ion batteries isn’t new.

A 2012 Forbes article cites research by the Washington State University, in which they tested anodes made of tin (as opposed to graphite).

“In particular, the researchers have developed an anode made of tin, rather than the carbon used currently,” a 2012 university release about the research stated. “Rechargeable lithium ion batteries are made up of two electrodes, the cathode and an anode. During charging, the lithium ions move from the cathode to the anode. The anode holds the lithium ions and stores the battery’s energy. When the battery is used, the ions move from the anode to the cathode, discharging electrons and creating an electric circuit.
“The new tin anode has the potential to store almost three times the energy of graphite.”

According to the United States Geological Survey, in 2017 China led the way in tin production, producing 100,000 tons, followed by Indonesia and Myanmar (50,000 tons apiece).

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For more information on the ITA research, visit the ITA website.

Tin Price Trends

As for price, LME tin rode a downtrend from April 2018 through the end of November, before gradually picking up over the next 2 1/2 months.

LME tin price since the beginning of 2018. Source: LME

The LME tin price hit $18,850 as of Dec. 3, 2018, and has increased 11.9% to $21,100 as of Feb. 19. As we noted in our most recent Monthly Metals Outlook report, a nearly 51% decline in LME stocks since December has helped drive the price uptrend.

Tin Production

According to another ITA release, a Tasmanian tin mine posted record production in January.

The Renison mine, a joint venture of Metals X and Yunnan Tin Group, produced 871 tons of tin in January.

“Australian mining appears to be ramping up, with increased tin output from Renison coinciding with new production at the Granville mine,” the ITA said. “Despite bush fires threatening production in January and forcing the mine to suspend operations for two days, Renison still achieved record output. This bears well for the future of the mine, which is due to report its updated resource estimate in the June quarter.”

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This morning in metals news, Chinese steel and iron ore prices dropped, miner BHP’s first-half earnings fell 8% and the ongoing shutdown of Vedanta’s Sterlite Copper plant has boosted copper prices led to increased dependence on imports for Indian consumers.

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Post-Holiday Lull

Steel and iron ore prices in China fell Wednesday on the heels of the Lunar New Year, Reuters reported.

SHFE rebar prices, for example, fell 2.3% to 3,590 yuan ($533.81) per ton.

BHP Slumps

Miner BHP Group’s first-half earnings were down 8%, CNBC reported.

According to the report, the miner cited declining production at its Escondida copper mine in Chile and other production outages elsewhere.

Vedanta Copper Plant Remains Closed

The Indian Supreme Court recently reversed a previous ruling by a lower court that would have allowed Vedanta’s Sterlite Copper plant to reopen in the southern Indian state of Tamil Nadu.

As noted by Bloomberg, the price of London copper rose 1.1% Monday on the news of the high court’s reversal.

As a result, Indian consumers have had to depend on imports, Bloomberg notes, as the Sterlite plant, which boasts an annual capacity of 400,000 tons, remains shuttered.

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The plant was shuttered last year after locals protesting pollution from the Tuticorin plant were fired upon by police, resulting in 13 deaths.

Automaker General Motors announced plans to invest $36 million and $20 million in its Lansing and Romulus plants, respectively, in Michigan.

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The Lansing plant produces the Chevrolet Traverse and Buick Enclave crossovers.

“We are proud of the hard work and commitment of the entire Lansing team and the Chevrolet Traverse and Buick Enclave are important products in our growing crossover portfolio,” GM Chairman and CEO Mary Barra during a visit to the plant to meet with employees and community leaders, as quoted in a company release. “This investment will allow us to prepare the plant for future crossover production.”

The Lansing Delta Township plant opened in 2006 and has produced more than 2 million crossovers since then. According to the release, GM has invested more than $600 million in the plant since 2009.

Meanwhile, at its Romulus propulsion plant, the company plans to invest $20 million in order to augment its “capacity for future 10-speed transmission production.”

The plant produces V6 engines and 10-speed transmissions used in GM vehicles.

“Romulus has a long-standing reputation of quality, productivity and performance and we are proud of the hard work and commitment displayed by the entire Romulus team,” Barra said. “GM’s investment in Romulus will enable the plant to continue playing an important role in our core business going forward.”

Per the release, GM has invested more than $880 million in its Romulus plant since 2009.

The Romulus plant opened in 1976 and has been producing engines since the 1980s, having since produced over 10.8 million V8 engines and over 6.6 million V6 engines.

The twin investment announcements come a few months after GM’s announced closure of five North American plants by the end of 2019, in addition to a 15% workforce reduction. Two of the plants tapped for closure are in Michigan (Detroit-Hamtramck Assembly in Detroit and Warren Transmission Operations in Warren). GM’s planned plant closures and workforce reduction was expected to save the company $6 billion by the end of 2020.

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“In the past four years, GM has refocused capital and resources to support the growth of its crossovers, SUVs and trucks, adding shifts and investing $6.6 billion in U.S. plants that have created or maintained 17,600 jobs,” GM said in a release Nov. 26, 2018. “With changing customer preferences in the U.S. and in response to market-related volume declines in cars, future products will be allocated to fewer plants next year.”

Just before the statutory deadline, Commerce Secretary Wilbur Ross on Sunday sent President Donald Trump his report on the Section 232 automotive investigation opened last year.

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The Trump administration launched the investigation May 23, 2018, using Section 232 of the Trade Expansion Act of 1962 — the same statute used to impose tariffs of 25% and 10% on steel and aluminum imports, respectively — to determine whether imports of automobiles and automotive parts are considered injurious to national security.

Once a Section 232 probe is launched, the U.S. secretary of commerce has 270 days to send the president a report with recommendations (if any), after which the president has 90 days to make a decision (in this case making for a May 17 deadline for Trump’s decision).

While Ross did send his report just hours before the deadline Sunday, the report was not made public.

As such, industry groups have made calls for the public release of the report.

The Motor and Equipment Manufacturers Association (MEMA) in a statement said it was “alarmed and dismayed” that the report was not available to the public.

“It is critical that our industry have the opportunity to review the recommendations and advise the White House on how proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in U.S. investments that could set us back decades,” the association said in a prepared statement. “Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs. MEMA calls for the immediate and full release of the report.”

MEMA also warned of a compounding negative impact if the tariffs were introduced on top of the existing Section 232 tariffs on steel and aluminum.

“If these tariffs are imposed, the first impacts will be felt by smaller suppliers,” MEMA said in the release. “Usually North American-based, smaller supplier manufacturers’ two largest costs are raw materials/inputs and salaries. These suppliers are already paying significantly more for their raw materials due to tariffs on steel and aluminum. If Section 232 tariffs are implemented, suppliers will have no choice but to lay off members of their workforce.”

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Earlier this week, Reuters reported European Commission President Jean-Claude Juncker said Trump had told him he would not impose tariffs on imported automobiles for the time being.

However, Juncker added that Europe would retaliate if the U.S. went forward with tariffs on imports of automobiles and automotive parts.

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This morning in metals news, the copper price fell Tuesday, U.S. steel mills have produced at a capacity rate of 80.7% through Feb. 16 and a $1.8 billion steel mill could be coming to Texas.

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Copper Falls

With renewed U.S.-China trade talks scheduled today, the price of copper dropped, Reuters reported.

LME copper fell 0.6% to $6,245 per ton, according to the report.

Capacity Utilization Rate

U.S. steel mills posted a capacity utilization rate of 80.7% for the year through Feb. 16, according to the American Iron and Steel Institute’s weekly steel production report.

Adjusted year-to-date production through Feb. 16 hit 12.7 million net tons, up 8.4% from the 11.8 million net tons during the same period last year at a capability utilization rate of 75.7%.

Steel Dynamics Plant Search

San Patricio County in south Texas is in the mix for a new $1.8 billion steel plant in the works from Steel Dynamics, according to the Corpus Christi Caller Times.

In November, Steel Dynamics announced plans to build a new organic flat roll steel mill with an annual capacity of 3.0 million tons. The mill was expected to create about 600 jobs, according to the steelmaker.

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“The company currently expects to locate the facility in the southwestern United States, to cost effectively serve not only the southern United States, but also the underserved Mexican flat roll steel market,” the company said in a release. “Determination of the final site location is subject to state and local government infrastructure and incentive support. Upon final site selection and the receipt of required environmental and operating permits, the company would expect to begin construction in 2020, followed by the commencement of operations in the second half of 2021.”

This morning in metals news, the U.S.’s Section 232 automotive investigation moves forward, Tokyo Steel announces its prices will remain steady next month and the copper price got a boost from an Indian Supreme Court ruling.

Section 232 Report Sent to the President

On May 23, 2018, the Trump administration initiated a Section 232 investigation to determine whether imports of automobiles and automotive parts are negatively impacting national security.

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Pursuant to Section 232 of the Trade Expansion Act of 1962, Commerce Secretary Wilbur Ross then had 270 days to send the president a report with recommendations vis-a-vis the probe.

According to Reuters, Ross sent his report to the president Sunday, two hours before the close of the deadline.

Steady Steel

For the third month in a row, Tokyo Steel has opted to keep its prices steady, Reuters reported, citing a weaker overseas market and slower winter construction demand.

Per the report, rebar will remain at 69,000 yen ($624) per ton.

Court Ruling Boosts Copper

According to another Reuters report, the copper price got a boost after the Indian Supreme Court reversed an environmental court’s prior ruling that would have allowed a Vedanta copper smelter to reopen.

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The smelter was closed last May after a protest over pollution from Vedanta’s Sterlite copper plant turned deadly; authorities fired on the protestors, resulting in 13 deaths.

General Motors’ new eBike brand has a name.

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On the heels of a crowdsourcing campaign launched in November, GM announced late last week that its new electronic bike brand will be dubbed ARĪV.

The bikes were available for preorder starting Feb. 14. According to a GM release, the eBikes will be launching first in Germany, Belgium and the Netherlands due to “the popularity of lithium-ion battery-powered eBikes in those markets.”

The eBikes will begin being shipped to customers starting in the second quarter of this year.

Meld and Merge

GM’s new eBikes come in two models: a Meld compact bike and a Merge folding bike.

When it comes to electrified transportation, everyone wants to know about range.

“The battery was validated to rigorous safety standards similar to GM’s electric vehicles batteries,” the release states. “Riders can charge their ARĪV eBike’s battery in approximately 3.5 hours and receive up to 64 kilometers of ride time on a single charge.

“The ARĪV Merge and Meld come standard with safety components such as integrated, rechargeable front and rear LED safety lights for increased visibility and oversized brake rotors to increase stopping power.”

The bikes can reach speeds of up to 25 kph, the release states, powered by “four levels of pedal-assisted power.”

Features and Cost

Other features include an app, connectable via Bluetooth, which provides data like speed, distance and remaining battery level, among other pieces of information. The eBikes also come with a mount for smartphones and a built-in USB port for on-the-go charging purposes.

So, what will interested consumers be forking over to acquire one of these bikes?

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Per the release, in Germany the Meld is going for €2,750, while the Merge will come in at €3,350. Meanwhile, in Belgium and the Netherlands, the Meld and Merge bikes will cost €2,800 and €3,400, respectively.