Articles in Category: Environment

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As a microcosm of how power generation is evolving around the world, the U.K. is not exactly a perfect example.

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But many of the trends being played out there are, to a greater or lesser extent, mirrored in other countries.

Striving for Coal-Free

The U.K. government has undertaken to be coal-free for electricity power generation by 2025, which is some pledge for a country sitting on coal reserves said to be sufficient for 300 years of demand (albeit much of it is at depth and not as economically attractive as it may sound).

In 2012, the U.K. produced 40% of its power from coal, much the same as in the U.S. at the time. Unlike the U.S., where coal now makes up a declining but still substantial 30% or so, in the second quarter of this year coal usage in the U.K. fell to 2.1%.

In fact, on April 21 – a particularly windy day – the U.K. was coal-free for 24 hours for the first time since the onset of the Industrial Revolution.

The major beneficiaries will come as no surprise for anyone familiar with British weather.

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This morning in metals news, the International Trade Commission rules that imports of solar cells are hurting U.S. manufacturers, iron ore enters a bear market and the UN proposes that businesses take responsibility for environmental pollution.

A Bear Market for Iron Ore

The price of iron ore has undergone the biggest weekly fall in 16 months, Bloomberg reports. Having slipped into a bear market, the metal was trading at $63.56/ton on Friday, more than 20% lower than its August 21 high of $79.93/ton.

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We may see this price slump to continue for the near future. Some expect the price of iron ore to drop to the $50s in the fourth quarter. If China’s steel production cuts do go into effect as planned this winter, the country’s steel output may decrease as much as 30 million tons, thus cutting iron consumption by 50 million tons.

End of the U.S. Solar Boom?

The U.S. International Trade Commission voted in a 4-0 decision on Friday that the U.S. solar energy industry is being hurt by foreign overcapacity and cheap solar cell imports, the Washington Post reports. However, the proposed 40-cent-per-watt tariff on solar cells would double the price of solar panels, putting pressure on the rest of the U.S. solar industry.
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Hurricane Harvey left a trail of destruction throughout southeastern Texas and southwestern Louisiana. Those impacted regions have a long road to recovery.

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But not long after Harvey, Hurricane Irma made landfall in the continental United States, compounding the havoc wreaked by Harvey.

According to Dr. Joel N. Myers, founder, president and chairman of AccuWeather, Irma will prove to have been the worst hurricane to hit Florida since Hurricane Andrew in 1992.

Millions of Floridians lost power because of Irma. According to the Department of Energy, there were 4,864,148 customer outages in Florida, or 49% of the state, as of Tuesday morning. That figure is down from the 6,117,024 reported customer outages as of Monday afternoon — or a whopping 59% of the state.

The storms, one after the other, marked the first time in 166 years of weather records that two Atlantic Category 4 hurricanes made landfall in the United States in the same year.

Like Harvey, the extent of Irma’s damages will become clear over time, but there will certainly be significant damages to homes and other properties, and even vehicles. Enki Research estimated damages may reach $49 billion.

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The damage to brand is extending far beyond Volkswagen.

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The whole German car industry, once held up as the paradigm of quality and professionalism, is feeling the aftershocks of Volkswagen’s emissions testing deceit (popularly dubbed Dieselgate).

The challenge for the German auto industry is made all the more severe because of the industry’s reliance on the diesel engine.

According to a Financial Times article, Germany’s carmakers will upgrade 5.3 million diesel vehicles to reduce their harmful emissions as they scramble to save the country’s manufacturing image and the technology so badly tarnished by the Volkswagen test-rigging scandal.

The 5.3 million cars to be upgraded include 3.8 million Volkswagen vehicles — 2.5 million of which had already been recalled over the emissions issue.

Some 900,000 Daimler cars are involved, plus 300,000 BMWs, as well as a few Opel vehicles, the report states.

The urgency is compounded by reports that a number of German cities, fed up with high levels of air pollution, are contemplating driving bans on diesel vehicles — a move that would devastate the auto sector, the Financial Times reports.

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In a recent interview, Rusal Deputy CEO Oleg Mukhamedshin reaffirmed his company’s commitment to the Paris climate-change accord and indicated that it will continue investing in the research and development of lightweight aluminum alloys, both to distance itself from the commodity end of the market and to provide improved materials for lightweighting.

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The interview with the South China Morning Post was reported by Aluminium Insider largely within the context of Rusal and Russia’s continued commitment to tackling climate change following President Donald Trump’s rejection of the process.

To what extent one takes any Russian company’s commitment to climate change is a debatable and personal point, but in one area Rusal’s stated commitment to meet 100% of its power needs from renewable power sources by 2020 has a much stronger economic argument than the simple angle of climate change.

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After a 17-point leap in our Renewables MMI from April to May, the sub-index — which tracks metals and materials going into the renewable energy industry — posted no movement for our June reading, standing at 71.

(A quick note: Last month, the sub-index rose to 71 after a recalibration of our index to better account for cobalt price fluctuations.)

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But that doesn’t mean there were not big swings within the sector — far from it.

U.S. steel plate, the heavy hitter of this group, posted a 4.8% drop last month — but that quickly reversed itself.

This time around, U.S. steel plate bounced back, posting a 2.7% increase. The bounceback followed a trend of exclusive growth for U.S. steel plate in 2017, as the 4.8% drop reflected by the May 1 price marked the only month-to-month drop of the year thus far.

Unlike steel plate, U.S. grain-oriented electrical steel (GOES) went in the other direction, posting a price drop that nearly erased previous the April-May price increase. This month, GOES dropped 6.2%, one month after prices rose by 9.1%. (More on how GOES does/doesn’t trend along with broader steel markets in the section below.)

Abroad, steel plate also had good months in China and Japan. Chinese steel plate rose by 2.8%, while Japanese steel plate got a 0.7% boost.

What’s the Deal With GOES?

As MetalMiner’s Executive Editor Lisa Reisman wrote Thursday, GOES prices have been on a “roller coaster ride” so far this year.

“GOES prices do not tend to follow general steel price trends, nor does simple fundamental (supply and demand) analysis help explain price trends,” Reisman wrote.

Globally, however, GOES prices are on the rise. Why? That has been driven by an increased demand for electric cars and GOES producers in the U.S., Korea and Japan securing tonnage at a $400-500/metric ton increase over previously contracted prices.

Domestically, while prices for GOES — metals used in electrical transformers — went down this month, Reisman predicted that likely won’t become a trend throughout the remainder of the year.

“It’s hard to see any outcome not resulting in rising U.S. GOES prices for the second half of the year,” she wrote.

Again, looking to the global picture, good news for this sector is the growth of the renewable energy industry overall.

Free Download: The May 2017 MMI Report

The BBC reported the U.K. has set renewable energy production records this year. In the U.S., CNBC reported even in states like Kansas — which two years ago repealed a renewable energy mandate that called for 20% of the state’s electrical power to come from renewable sources by 2020 — have ramped up renewable energy production.

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This morning in metals news, mining company Rio Tinto PLC is planning on digging deeper underground for copper, a metals trader who pleaded guilty to fraud charges last week is cooperating with U.S. prosecutors in an investigation of trading practices at the the world’s biggest banks and the Justice Department is seeking to dismiss a lawsuit filed by mining company Twin Metals Minnesota, which is seeking the reinstatement of federal leases so it can operate on land in northeastern Minnesota.

Rio Tinto PLC Eyes Mid-2020s for $6-8B Mining Operation

As readily mineable copper supplies dwindle, one company has decided to simply dig deeper.

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Mining company Rio Tinto PLC is preparing for a new mining operation, estimated to cost $6 billion to $8 billion, which will seek to dig about a mile underground, the Wall Street Journal reported. According to the article, the Arizona mine — which is pending regulatory approval — could meet the demand of approximately one-fourth of U.S. demand.

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Last week President Donald Trump announced to the world his decision to pull the U.S. from the Paris climate accord, but a little-discussed change in the sulphur content of marine fuel oil is likely to have a significant impact on transport costs by the end of this decade.

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The international shipping industry is a major atmospheric polluter. In terms of carbon dioxide greenhouse gases, it is projected to account for 17% of global emissions by 2050, according to the Guardian newspaper last year.

In addition, the shipping industry burns the dirtiest of fuel types. Marine bunker fuel is produced from the waste leftover in refineries when more volatile and valuable fractions are extracted from crude oil. As a result, current levels of sulphur in maritime fuels can be as high as 3.5%, representing a major source of pollution, as anyone who has seen a large tanker or cruise ship fire up prior to departure — spewing out dirty, unscrubbed funnel fumes in vast plumes — can attest.

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AdobeStock/Andrey Burmakin

This morning in metal news, a new report paints a positive picture for jobs in the renewables sector, Moody’s downgrades China’s credit rating, and the results of the OPEC meeting are in. The current supply cuts will be extended for another nine months, and oil prices tumbled on the news.

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OPEC Agrees on 9-Month Extension of Supply Cuts

Let’s start with the big headline of the morning. As expected, the Organization of Petroleum Exporting Countries (OPEC) has agreed to extend supply cuts for another nine months, until March 2018.

After OPEC wrapped up its first meeting in Vienna around 3:30pm CEDT (8:30am CDT), oil prices responded over the next few hours by sliding 4.5% to $51.60 per barrel. Some industry analysts think OPEC should have agreed to deeper cuts. As The Guardian reported, OPEC is “sticking to the 1.8 [million] barrel a deal first agreed in late November.” Russia and other oil producing non-OPEC members are also expected to go along with the supply cuts.

Forget Bringing Back Coal Jobs

The burgeoning renewable energy sector employed 9.8 million people in 2016, according to the latest annual report released by the International Renewable Energy Agency (IRENA). Global employment in the sector has been growing every year since 2013, and there may be as many as 24 million renewables workers worldwide by 2030. Read more

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It’s a story of two democratic countries and the policies they pursue vis-à-vis energy.

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So while the U.S. under President Donald Trump is kind of trying to revive its coal industry, far away India is doing the opposite – embracing clean energy with a vengeance and relying on it for much of its energy needs.

That’s one of the many reasons why India has also managed to beat the U.S. to the number two position in the renewable energy investment index released recently by UK-based accountancy firm Ernst & Young. China has continued to remain on top of this list, while the U.S. is now third. This is an annual ranking of the top 40 renewable energy markets in the world.

Those who prepared the report said that industry-friendly policies laid down by the Indian government, along with increasingly attractive economics, had changed the entire climate of the renewable energy sector of India.

Under Trump, the U.S. is seeing a shift in its energy policy. The president has issued orders to roll back many of the previous administration’s climate change policies, revive the U.S. coal industry and review the Clean Power Plan. Compare this to India’s neighbor China, which has announced that it would be spending $363 billion on developing renewable power capacity by 2020. Read more