Articles in Category: Environment

Japan map

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Japan’s steel sector is facing tumultuous times.

But, in the short term, there are initial signs of it pulling through in 2021.

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Pandemic impacts on Japan’s steel sector

The COVID-19 pandemic contributed to the weakening of domestic needs. Furthermore, tepid global demand, cheaper exports by China and an ambitious net-zero emission target to develop cleaner steel have all come together to negatively affect the country’s steel sector.

According to an S&P Global Platts report, Japan’s iron and steel product exports fell 4.9% year over year to 32.14 million metric tons (MT) in 2020.

Quoting from data from the Japan Iron & Steel Federation, the report noted total exports to the US fell 30.5% year over year to 890,000 MT. That marked the fourth straight year of decline since reaching 2.06 million MT in 2016.

A slight recovery in December saw exports rise by 5% from November to 2.56 million MT. Hot-rolled wide strip steel accounted for the bulk of the ordinary steel products exported.

In fact, for the first time since 2009, as the S&P Global Platts report noted, Japan’s crude steel production fell below the 100 million MT mark.

Production fell 16.2% year over year to 83.19 million MT in 2020, according to the World Steel Association.

The country’s crude steel output fell 3.9% in January this year from a year earlier.

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aluminum ingot stacked for export

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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, including the aluminum industry and its efforts to curb emissions, China’s latest foray in the global rare earths chess game and much more:

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Week of Feb. 15-19 (aluminum industry, rare earths and more)

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carbon footprint

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Although originally borrowed from a book of the same name, some call Australia the “Lucky Country.”  Blessed with resource abundance, a warm climate and decades of near uninterrupted growth, it certainly seems to have it all.

But it isn’t alone.

For decades, industrialized countries have looked at the Middle East’s oil wealth with some degree of envy. Those countries have also looked on with a little irritation, particularly when OPEC artificially engineers oil price rises to reap huge financial rewards for member states.

The United Arab Emirates seems to have the best of both vast oil wealth and the nous (to use the British slang) to invest the proceeds, not just in palaces and Rolls Royce cars but in infrastructure, education and diversified industrial development.

As the world potentially approaches peak oil — how many times have we heard that over the decades? — the UAE is already beginning to exploit its other near endless resource: sunlight.

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Carbon-free aluminum

The output from its 1 GW Mohammed bin Rashid Al Maktoum Solar Park — or, at least, 560,000 megawatt-hours of its output — will feed the Emirates Global Aluminium (EGA) smelter.

That’s enough power, The Driven reports, to produce some 40,000 tons of carbon-free aluminum.

Originally based on low-cost, natural-gas-powered electricity, the UAE can now neatly transition its aluminum smelters into the future of renewable power.

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US and UAE flags

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Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner, including the Biden administration reimposing a tariff on aluminum from the UAE, copper demand and much more.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Week of Feb. 8-12 (Biden administration reinstates UAE aluminum tariff, copper demand and more)

Stop obsessing about the actual forecasted aluminum price. It’s more important to spot the trend.

The Renewables Monthly Metals Index (MMI) rose by 4.4% this month, as the Energy Information Administration released a forecast on renewable energy.

February 2021 Renewables MMI chart

(Editor’s note: This report also includes the MMI for grain-oriented electrical steel, or GOES.)

Renewable energy growth in the US

renewables

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US electricity generation from renewable energy sources is forecast to double over the next 30 years, according to the Energy Information Administration.

Renewable energy sources accounted for 21% of US electricity generation in 2020.  The EIA forecasts that percentage will reach 42% by 2050.

The renewable energy increase will come on the back of declining coal and nuclear power usage, the EIA said. Furthermore, wind power will account for the majority of renewable energy gains until 2024.

After that period, however, solar power will take over the majority of the gains.

“After the production tax credit (PTC) for wind phases out at the end of 2024, solar generation will account for almost 80% of the increase in renewable generation through 2050,” the EIA said. “Based on the Internal Revenue Service safe harbor guidance, EIA assumes that utility-scale solar PV facilities will receive a 30% investment tax credit (ITC) through 2023, which will then be reduced to 10% beginning in 2024.”

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

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renewables

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This morning in metals news: the Energy Information Administration forecast the renewables share of US electricity generation will double by 2050; meanwhile, the US unemployment rate fell to 6.3% in January; and, lastly, the tin price has bucked the recent general trend for base metals prices.

EIA: renewables share of electricity generation to double by 2050

The Energy Information Administration forecast the renewables share of US electricity generation will double by 2050.

Wind and solar, in particular, will account for most of that growth, the EIA reported.

Renewables accounted for 21% as of 2020.

Meanwhile, natural gas-fired generation will remain constant over the period. Furthermore, electricity generation from coal and nuclear will decline, the EIA forecast.

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US unemployment dips to 6.3% in January

The US unemployment rate fell to 6.3% in January, down by 0.4 percentage point.

“The labor market continued to reflect the impact of the coronavirus (COVID-19) pandemic and efforts to contain it,” the Bureau of Labor Statistics reported. “In January, notable job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.”

Meanwhile, Richard Neal, chairman of the House Ways and Means Committee, issued a statement on the latest jobs report.

“Data point after data point continues to reflect that our economy is being walloped by the pandemic and that robust relief is required,” Neal said. “The anemic and bifurcated job creation this past month demonstrates the inequitable and shaky condition of our labor market. So long as jobs are scarce and caregiving supports and working conditions are untenable, the federal government must help folks stay afloat until they can safely return to work.”

Employment in mining ros by 9,000 jobs in January. Manufacturing employment fell by 10,000 jobs in January on the heels of eight consecutive months of growth.

Manufacturing employment is up by 803,000 since April, the BLS reported.

Tin price gains

The tin price has outperformed other base metals of late.

The LME three-month tin price closed Friday at $23,035 per metric ton, up 8.81% from the previous month.

In 2020, the tin price fell to as low as $13,400 per metric ton in late March.

Find more insight on MetalMiner’s LinkedIn.

Tailings mud after dam rupture in Brumadinho, Minas Gerais, Brazil

Tailings mud after dam rupture in Brumadinho, Minas Gerais, Brazil. Christyam/Adobe Stock

This morning in metals news: Brazilian miner Vale reached a $7 billion settlement with the state of Minas Gerais two years after a fatal dam collapse; the US goods and services deficit decreased in December; and Ford Motor Co. announced an increase in its planned investment in electric and autonomous vehicles.

Vale reaches $7B settlement

Approximately two years after a fatal dam breach in Brumadinho in the Brazilian state of Minas Gerais, miner Vale will pay a nearly US $7 billion settlement.

The breach in January 2019 led to the death of 270 people.

“In the socioeconomic part, the settlement encompasses projects demanded by the affected communities, a program of income transfer to the affected population – replacing the current payment of emergency aid – and projects for Brumadinho and for the other municipalities of the Paraopeba Basin, in addition to resources for the Government of the State of Minas Gerais to carry out the Urban Mobility Program and the Public Service Strengthening Program,” Vale said in its announcement.

“Regarding the socio-environmental reparation, the Global Settlement establishes the guidelines and the governance for the execution, by Vale, of the Reparation Plan, as well as projects to be implemented as compensation for the environmental damage already known and projects aimed at water security in the impacted region.”

Find more insight on MetalMiner’s LinkedIn.

US goods and services deficit rises in 2020

The US’s goods and services deficit in December reached $66.6 billion in December, down from $69.0 billion in November.

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executive order

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This morning in metals news: President Joe Biden on Monday signed an executive order aimed at boosting U.S. manufacturing; the U.S. steel sector’s capacity utilization rate during the week ending Jan. 23 reached 75.7%; and the Energy Information Administration expects energy-related carbon dioxide emissions to tick back up once again in 2021 and 2022 after declining in 2020.

Biden signs executive order to boost federal procurement of U.S.-made goods

President Joe Biden on Monday signed an executive order that aims to boost U.S. manufacturing by increasing federal procurement of U.S.-made materials.

“‘Made in America Laws’ means all statutes, regulations, rules, and Executive Orders relating to Federal financial assistance awards or Federal procurement, including those that refer to ‘Buy America’ or ‘Buy American,’ that require, or provide a preference for, the purchase or acquisition of goods, products, or materials produced in the United States, including iron, steel, and manufactured goods offered in the United States,” the executive order states.

Agencies can, however, seek to acquire waivers for exemption from the laws.

“To the extent permitted by law, before granting a waiver in the public interest, the relevant granting agency shall assess whether a significant portion of the cost advantage of a foreign-sourced product is the result of the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel, iron, or manufactured goods,” Section 5 of the executive order states. “The granting agency may consult with the International Trade Administration in making this assessment if the granting agency deems such consultation to be helpful.”

A director will lead the so-called Made in America Office. Furthermore, the director of the Office of Budget and Management will appoint the director of the Made in America Office.

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Steel capacity utilization hits 75.7%

Speaking of the executive order and U.S.-made products, the U.S. steel sector’s capacity utilization rate for the week ending Jan. 23 hit 75.7%, down from 76.7% the previous week, the American Iron and Steel Institute reported.

Meanwhile, output during the week totaled 1.72 million tons, or down 1.2% from the previous week. Furthermore, output decreased 9.9% year over year.

 CO2 emissions to rise in 2021, 2022

Per the Energy Information Administration, energy-related carbon dioxide emissions in the U.S. will likely increase this year and next after declining in 2020.

“Economic growth and the lessening of pandemic-related restrictions result in more energy consumption and associated CO2 emissions,” the EIA reported. “EIA expects total energy-related CO2 emissions to increase to 4.8 billion metric tons in 2021 and 4.9 billion metric tons in 2022.”

Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?

General Motors headquarters

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U.S. automaker General Motors is making a big investment toward electrification.

The automaker recently announced plans to invest nearly $800 million to build what it referred to as “Canada’s first large-scale commercial electric vehicle plant.”

Drive toward electrification

Much has been made of Tesla’s head start in the race toward electrification. In short, traditional automakers like GM have been making investments to catch up.

“Subject to ratification of a tentative 2021 agreement reached with Unifor and confirmation of government support, General Motors plans to bring production of its recently announced BrightDrop electric light commercial vehicle, the EV600, to its CAMI manufacturing plant in Ingersoll, Ontario,” GM said in its announcement this month.

“The nearly $800 million (1 billion Canadian dollar) investment will support GM’s timing to deliver BrightDrop EV600 in late 2021. The investment will enable GM to convert CAMI into Canada’s first large-scale electric delivery vehicles manufacturing plant.”

The BrightDrop vehicles are geared toward commercial customers. Furthermore, the vehicles will offer an “ecosystem of connected and electrified products and services designed to improve the delivery of goods and services from the first to last mile,” GM says.

“It aims to help B2B customers reduce cost of ownership, improve productivity and safety, and improve their carbon footprints and sustainability efforts,” GM added.

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London Metal Exchange

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Before we head into the weekend, let’s take a look back at the week that was in metals storylines here on MetalMiner, including Stuart Burns on LME steel contracts, the green revolution in aluminum and much more.

Regarding the LME steel contracts, Burns noted, “For over 200 years, the London Metal Exchange (LME) has provided the trade – producers, traders and consumers – the opportunity to hedge their risk across a growing range of base metals.

“However, only recently have exchanges such as the LME, the U.S.’s CME and the Shanghai Futures Exchange (SHFE) in China introduced products allowing the trade to hedge raw material and finished steel price risk.”

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Week of Jan. 18-22 (LME steel contracts, green aluminum and more)

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