Author Archives: Sohrab Darabshaw

Two years ago, Indonesia instituted a ban on nickel ore exports.

Now, it is contemplating banning exports of tin and copper ore, too.

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Indonesia export bans prompt tin price surge

Indonesia on a globe

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Indonesian President Joko Widodo has been announcing from different forums that his country may stop the export of bauxite next year, copper ore in 2023 and tin in 2024.

On the heels of the announcements, the tin price has surged, MetalMiner Insights data shows. (Subscribers can find additional tin and copper analysis in the next Monthly Metal Outlook report, which will be released Wednesday, Dec. 1.)

The LME three-month tin price closed Monday at $39,450 per metric ton. The price is up 6.6% month over month.

For long, Indonesia has been a major exporter of metal ores, mostly to Asian countries, including China and Japan. The ban on nickel exports had triggered investments, mostly from China, into Indonesian nickel processing.

As part of efforts to improve the country’s external balance & attract investments into the resource processing industry, Indonesia may stop tin exports in 2024, the Indonesian President reiterated last week at the Indonesian central bank’s annual gathering.

The president has made similar statements in recent public appearances about the country’s long-term dependence on raw commodities, reducing its export earnings and employment opportunities.

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The United States and Japan have agreed to initiate talks regarding the former’s Section 232 tariffs on Japanese steel and aluminum imports, Reuters reported this week.

According to a report by AP, Japan’s industry ministry said Japan’s Industry Minister Koichi Hagiuda and U.S. Commerce Secretary Gina Raimondo attended the meeting. However, a ministry official said no concrete measures were discussed and no date was set for the talks.

The meeting comes after the U.S. administration said over last weekend that it would open talks to try to ease the tariffs.

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US, Japan at the negotiating table over Section 232


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The two nations have come to the negotiating table to resolve bilateral concerns from global non-market excess capacity driven largely by China, as well as the duties the U.S. imposes on imports, Raimondo and U.S. Trade Representative Katherine Tai said in a statement last Friday.

“Secretary Raimondo and Ambassador Tai reiterated concerns about the impact on U.S. industries stemming from global non-market excess capacity driven largely by China,” the statement reads. “The distortions that result from this excess capacity pose a serious threat to the market-oriented U.S. steel and aluminum industries and the workers in those industries.  The United States and Japan have a historic alliance, built on mutual trust and respect, and reflecting shared values and a strong commitment to resolving global challenges through closer cooperation.”

Earlier in November, Japan had requested the U.S. to abolish tariffs. Former U.S. President Donald Trump imposed the steel and aluminum tariffs in 2018, using Section 232 of the Trade Expansion Act of 1962.

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Two countries, two neighbors, two of the most populated countries in the world — China and India talked of their individual approaches to climate change at the COP26 summit in Glasgow, Scotland.

The event was delayed by a year because of the COVID-19 pandemic. It comes six years after the landmark Paris accord, which 200 countries signed. They pledged to limit rising global temperatures to 2 degrees Celsius above pre-industrial levels. In addition, they would pursue efforts to cap heating to 1.5 degrees Celsius.

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India aims for net-zero by 2070

COP26 summit graphic

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As MetalMiner’s Stuart Burns explained last month, India is facing a coal crisis, as stocks have dwindled. Contrary to long-term environmental goals, India remains largely dependent on coal-fired power generation.

Nonetheless, Indian Prime Minister Narendra Modi committed to achieving net-zero emissions by 2070. That is 20 years beyond the goal set by the COP26 organizers and British Prime Minister Boris Johnson.

The 2021 United Nations Climate Change Conference, also known as COP26, is the 26th United Nations Climate Change conference. The conference kicked off Oct. 31 and will run until Nov. 12.

In his speech, Modi pledged the country would meet 50% of its energy needs through renewable sources by 2030. He also said India will achieve net-zero emissions by 2070. India is the world’s third-largest carbon emitter.

Xi calls for ‘stronger actions’

On the other hand, in a statement released during the summit, Chinese President Xi Jinping called for countries to take “stronger actions” on climate change.

“I hope all parties will take stronger actions to jointly tackle the climate challenge and protect the planet, the shared home for us all,” he said, according to China’s state media agency Xinhua, which published the statement.

Xi did not attend the summit.

Ahead of the COP 26, China’s National Development and Reform Commission (NDRC) released a detailed statement on its website of the country’s overall commitment to green energy. The NDRC said the construction of wind power and solar power stations with an installed capacity of 30 million kilowatts in the northern and northwestern sandy areas, rocky areas and deserts kicked off in mid-October.

The stations are in northern China’s Inner Mongolia autonomous region and northwestern China’s Gansu province, Ningxia Hui autonomous region and Qinghai province, according to a news report in the Global Times.

Despite automotive efforts, China’s net-zero target remains 2060

China plans to increase its use of new energy vehicles in the next decade in order to achieve its peak carbon dioxide emissions by 2030.

Using a plan released by China’s state council last week, Beijing plans to increase the share of new energy vehicles (NEVs) and clean energy-powered vehicles to 40% by 2030, up from 20% by 2025.

According to the China Association of Automobile Manufacturers, sales of new-energy vehicles through the first nine months of the year reached 2.16 million vehicles. The nine-month total marked a jump of 185.3%.

As per China’s plan, electric vehicles will be promoted. Traditional fuel vehicles will be gradually reduced in sales, public service vehicles will be replaced with electric vehicles. Heavy freight vehicles will be powered by electricity, hydrogen fuel and liquefied natural gas.

But at COP26, a belligerent China called for developed countries to help developing nations do more. Experts at the conference said Xi’s statement failed to make any new commitments on climate change.

China’s aim to reach net-zero by 2060 is also well beyond the 2050 target.

Xi’s comments follow criticism from U.S. President Joe Biden at the summit of the world’s largest economies. Biden criticized China and Russia at a news conference, saying the countries “basically didn’t show up” with climate commitments.

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Nippon Steel Corp. this month filed lawsuits against Toyota Motor Corp. and Baoshan Iron and Steel, alleging “infringement of Nippon Steel’s patent relating to non-oriented electrical steel sheets.”

The lawsuit is a rare clash between the former two companies, as Nippon is a major supplier to Toyota. Nippon is already grappling with rising raw material costs.

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Nippon Steel files lawsuits alleging patent infringement

patent infringement graphic concept

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Japan’s Nippon Steel Corp also filed a preliminary injunction before Tokyo District Court prohibiting Toyota from manufacturing and selling motor-driven vehicles.

According to a spokesperson for the company, Nippon Steel believes the sale and use of Baosteel sheets in Japan are in violation of its patent claims on composition, thickness, crystal grain diameter and magnetic properties.

Toyota responded, saying the matter should be discussed between material manufacturers. It further clarified that in its dealings with various material manufacturers, it had always implemented “a careful process” of confirming with them that there were no patent conflicts.

“Concerning the electromagnetic steel sheets manufactured by Baoshan Iron & Steel Co., Ltd. (Baosteel), as well, we confirmed that there was no infringement of another company’s patent before concluding a contract,” Toyota said. “We also received a written statement from Baosteel to that effect.”

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Amid a deepening energy crisis, China has begun construction on a massive wind and solar project in the desert.

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China announces plans for renewable energy project


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President Xi Jinping said via video link last week at a United Nations Biodiversity Conference that China has started building a massive renewable energy project.

The project would be bigger than all of the wind and solar power in India, Bloomberg reports.

Construction on the first phase, comprising 100 gigawatts of wind and solar, in the desert has begun, according to Bloomberg.

In order to accelerate its transition to carbon neutrality in advance of global climate talks, the nation is undertaking an initiative that is at least twice the size of the next-largest global development. Furthermore, it would be able to generate four times as much power as the Three Gorges Dam, according to Bloomberg.

China’s premier Li Keqiang had earlier questioned the pace of the nation’s energy transition. Li’s remarks followed directly on the heels of the president’s remarks. As the energy crisis continues, executing the country’s path to carbon neutrality is becoming more difficult ahead of COP26, the 26th conference on climate change. The conference will begin Oct. 31 in Glasgow, Scotland.

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Steel prices in India have nearly doubled over the last year, reflective of rising steel prices across the globe.

But for India, several factors such as a steep rise in the prices of raw material like iron ore — and of late, coking coal — have contributed to the steep hike.

Due to China’s decision to cut steel production and exports, India is also experiencing a price increase. High domestic demand had led China to remove rebates and impose export taxes on certain steel products this year to discourage exports. Steel production is also set to be capped in order to reduce carbon dioxide emissions.

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Indian steel prices on the rise


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India’s steel industry has been impacted by the price hike in various ways.

For some major steel manufacturers, it has led to large profits. For many small and medium enterprises that manufacture steel and engineered products, it has led to losses.

Protests have been lodged with the Indian government due to the shortage of raw materials. After China, India is the world’s second-largest steel-producing country. The price escalation in India started in the second half of 2020-21 and has continued nearly unabated since then.

In June, for example, the wholesale price of hot rolled coils (HRC) shot up by approximately US $40 (Rs 3,000) to be approximately $1,533 (Rs 69,000) per ton. Cold rolled coils shot up by about $66 (Rs 5,000) to sell at approximately $1,146 (Rs 86,000) per ton. Prices of both HRC and CRC were nearly half in the same period in 2020. These forms of steel are used in the automobile, construction and transport sectors.

Domino effect

Because it is steel, the price hike has had a cascading effect on consumer goods, construction and other activities, too.

Steel plants in the country have hiked steel prices by around $80 (Rs 6,000) per ton in just the last eight days.

CNBC TV18 reported JP Morgan India was of the view that Indian steel prices were still about 15% discounted to imported steel prices. When the busy season post festivals, starts in India, post-festive season, demand could go up, leading to some increase in local steel prices.

The sudden rise in steel demand once the COVID lockdown had ended caught Indian steel companies off guard. The uptick in steel consumption along with a renewed focus on infrastructure and government initiatives (such as “Make in India”) have led to an increase in steel demand.

In 2017, as part of the national steel policy, the Indian government announced India would try to reach 300 million tons per year year of crude steel production capacity by 2030.

Coal crisis

Furthermore, a local coal crisis, which some experts predict could last for quarters, has hit the steel sector.

Like China, India is also staring at a power crisis due to coal shortage. Over 70% of India’s power still comes from coal-powered plants.

As of Oct. 6, 80% of India’s 135 coal-powered plants had less than eight days’ worth of supplies left, according to BloombergQuint.

There are several reasons for the coal shortage. Among them, India has reduced its investment in the fossil fuel as it gives priority to renewable energy to meet its climate change targets.

BloombergQuint cited JSW Steel Ltd. officials, who have gone on record to state that the coal shortage is likely to lead to steel price hikes for the next few quarters.

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Investing $2 trillion over the next decade in sustainable infrastructure can greatly reduce Southeast Asia’s greenhouse gas emissions, according to a new report from Bain & Company, Microsoft and Singapore’s Temasek Holdings.

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Southeast Asia infrastructure needs

Southeast Asia map

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The report, titled “Southeast Asia’s Green Economy: Opportunities on the Road to Net Zero,” emphasized investments in areas such as renewable energy, electric vehicles, and waste management.

According to the report, green investments totaled only U.S. $9 billion last year. The report’s authors said Southeast Asia’s corporate, public, and philanthropic sectors must work together to attain the $2 trillion investment figure, the report noted.

Southeast Asia is highly vulnerable to climate change, as it suffers from disproportionately large numbers of climate disasters.

Road to net-zero

Though fighting COVID-19 currently remains a high priority for most governments, a lot of attention in Southeast Asia last year went to climate actions and thinking about what entails a green economy, according to Dale Hardcastle, co-director of Bain’s global sustainability innovation center.

The report found that about 90% of Southeast Asia’s carbon emissions can be addressed by transitioning away from fossil fuels to cleaner energy sources like wind and solar, valuing nature and making the region’s agricultural production of food more efficient.

“While we are seeing many encouraging changes in Southeast Asia’s Green Economy and the overall trend is positive, there is still much more to be done,” said Dale Hardcastle, a partner in Bain & Company’s Singapore office and co-director of the firm’s Global Sustainability Innovation Center (GSIC). “Southeast Asia presents specific conditions which provide both challenges and opportunities for a full-scale sustainability transformation. The region needs to act now and take three steps to translate these opportunities into tangible results: define its road to Net Zero, catalyze the journey and outcomes together, and unlock capital flows.”

Achieving net-zero as a region demands individual action by businesses, investors, governments, and communities, as well as collective action at an ecosystem level.

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Chinese moves to clean up their heavy-polluting industrial sector has triggered a swift collapse in iron ore prices for the first time since July 2020.

Prices last Friday and Monday dipped below the $100 per ton mark.

iron ore stockpile

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According to a draft guideline released on Thursday, the Ministry of Ecology and Environment intends to monitor 64 regions during its winter air pollution campaign.

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Evergrande crisis sparks concerns over Chinese economy

Iron ore, copper and other commodities may be further hammered following news of the crisis at Chinese developer Evergrande. Markets across the globe fell sharply Monday as Evergrande, one of the biggest property developers in the country, Evergrande threatened to default on loans worth U.S. $300 billion.

This has sparked off worries about the economy. It could also cause downturns in construction and demand for raw materials.

Iron ore’s fall

Since May, iron ore prices have fallen by more than half. China, the world’s biggest steelmaker, has tightened production curbs. Furthermore, China’s property market is experiencing a sharp downturn.

MetalMiner has previously reported on China’s move to cut down its steel production to curb pollution.

The Chinese government has announced plans to scale down the steel industry, which accounts for between 10-20% of its carbon emissions. The country has also raised tariffs on steel-related exports, effective as of Aug. 1, 2021.

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ArcelorMittal and Liberian President George Weah have announced a 25-year commitment to stay in Liberia. Through the deal, the steelmaker will triple its iron ore production in the country and invest an additional $800 million. The steelmaker said it has invested $1.7 billion in the country over the last 15 years.

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ArcelorMittal invests in Liberia

ArcelorMittal logo

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The steel and mining company had initially signed a 25-year agreement with Liberia in 2005. It shipped the first iron ore from its Yekepa mine in 2011.

During the newly signed first phase of expansion, annual production would reach 15 million tons (MT), with the potential of reaching 30 MT a year, ArcelorMittal Executive Chairman Lakshmi Mittal said at the signing ceremony.

ArcelorMittal will provide the government with a total of $65 million from the production of 15 million MT of iron ore in three years. Since the end of a 1989-2003 civil war, the mining and agriculture potential of Liberia has attracted billions of dollars in resource investments. However, the country’s infrastructure remains underdeveloped and the majority of its 5 million people live in poverty.

Going green

Of late, the UK-headquartered ArcelorMittal has been in the global headlines for its determined drive on the “green steel” and clean energy fronts, joining the trend of steelmakers foraying into green hydrogen and increasing the footprint in renewable power generation.

Just last week, Germany pledged to offer funding of $65 million toward of ArcelorMittal’s investment of 110 million euros ($131 million) in a hydrogen plant powered by renewable electricity.

German Environment Minister Svenja Schultze said Berlin would pay 55 million euros — subject to EU approval — toward a new direct reduced iron (DRI) plant. The plant will use green hydrogen to reduce iron ore in a CO2-free steelmaking process.

By 2025, ArcelorMittal Hamburg’s Chief executive Uwe Braun expects his company to produce 100,000 tons of DRI for steelmaking with green hydrogen from the plant.

ArcelorMittal invests in Indian solar power

Elsewhere, in India, ArcelorMittal plans to invest in solar energy in the Indian provinces of Rajasthan & Gujarat.

According to a report by pv magazine, Group Chairman Lakshmi Niwas Mittal met representatives of the local governments in Rajasthan and spoke of setting up a 4.5 GW solar park at an investment of about U.S. $2,586 million (Rs 19,000 crore) in the province. The plant is to be set up by ArcelorMittal arm HPCL-Mittal Energy Limited.

In another meeting with the Gujarat officials, Mittal also expressed his intention of investing about U.S. $6,809 million in Gujarat’s solar energy, wind energy and hydrogen gas production sectors.

ArcelorMittal currently produces DRI using grey hydrogen, which comes from natural gas. In a green hydrogen system, the hydrogen is produced by using renewable energy sources, like wind or solar power, and then run through an electrolyzer.

ArcelorMittal would have achieved its goal of expanding output to 15 MT per year would have been accomplished much earlier, but the Ebola outbreak in 2014 disrupted its expansion plans in Liberia, for which it declared force majeure.

ArcelorMittal said the project will generate more than 2,000 new jobs during the construction phase.

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Diplomatic relations between China and Australia have been strained over the past year.

However, that does not seem to have affected trade between the two nations.

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China-Australia trade

China and Australia flags

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After posting record exports in May and June 2021, Australia recently announced a new record in July. Exports of iron ore, coal and liquefied natural gas exports all rose strongly, giving Australia a record trade surplus, plus a boost to mining profits and tax revenue.

“Non-rural goods rose $2,275m (7%), driven by other mineral fuels, metal ores and minerals and coal, coke and briquettes,” the Australian Bureau of Statistics reported.

“The increases in other mineral fuels and coal, coke and briquettes were driven by LNG and thermal coal, respectively. Increased exports to Northern Asian countries coincided with an unseasonably warm northern summer.

“The increase in metal ores and minerals was driven by iron ore on the back of strong demand from China.”

In July, total exports, including services, reached a record of A$45.95 billion.

The Australian Bureau of Statistics reported the trade surplus climbed to A$12.1 billion (US $8.91 billion) in July. The surplus reached an already high A$11.1 billion in June.

Overall, exports were up 5% because of strong demand from Asian countries for LNG and thermal coal, combined with higher prices for iron ore, Reuters reported.

Imports rose 3% to $33.8 billion, largely due to a sharp increase in parts and accessories for telecommunications equipment.

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