Articles in Category: Environment

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This morning in metals news, Tata Steel completed its buy of the bankrupt Bhushan Steel, Chinese steel mills are turning to scrap and Turkey is preparing to respond over the U.S. tariffs on aluminum and steel.

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Tata Steel Buys Bhushan Steel

Indian firm Tata Steel completed its purchase of the bankrupt Bhushan Steel for $5.2 billion, Reuters reported.

Bhushan has an annual steelmaking capacity of 5.6 million tons, according to the report.

Scrapping Plans

Amid environmental rules, Chinese steel mills are looking to use more scrap, according to a report by the South China Morning Post.

The recycling of material comes as the government continues to crack down on “smoke-stack industries,” according to the report.

Turkey Plans Response on Section 232 Tariffs

Turkey is among the many countries not to have won an exemption from the U.S.’s Section 232 tariffs on steel and aluminum; unsurprisingly, Turkey is planning a response, according to one report.

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Turkey plans to impose tariffs worth about $266.5 million on U.S. products, including coal, paper, walnuts, almonds, tobacco and unprocessed rice, among other items, according to a report by the Hurriyet Daily News.

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Full disclosure – I am an owner of an iPhone, iPad and Macbook — and I don’t mind admitting it, a  longtime fan of Apple’s products — but even I cringe when the firm claims to have “worked with other metal companies to develop the proprietary technique, which allows for the generation of ‘green’ aluminium for the first ever time.”

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The claim follows the announcement late last week that at its Pittsburgh research center, Alcoa has developed a replacement for the carbon anodes used in the smelting of alumina to aluminium.

The carbon anode has the important role of delivering a strong electric current through the melt, but in the process carbon is converted to carbon dioxide and considerable levels of greenhouse gas emissions are produced.

But although Apple is said to be investing C$13 million (U.S. $10 million) in the joint venture called Elysis, it is a drop in the ocean compared to the C$120 million of funding from the governments of Canada and Quebec and, further, the C$55 million invested by Alcoa and Rio Tinto in order to achieve commercialization of the technology over the next five years.

Indeed, Alcoa and Rio each have a 48% stake in the JV, with the rest owned by the government of Quebec, so quite how Apple can claim any fame in this venture is hard to see.

OK, Apple’s hubris aside: is this a step forward in lowering aluminum’s carbon footprint?

Read more

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There’s a new trend on the solar energy harnessing front in India.

Like in China and a few of the Southeast Asian nations, India is seeing a spurt in what are called “floating solar plants.”

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In late 2017, the country inaugurated its largest such floating plant, a 500 kw (kilowatt peak) by the Kerala State Electricity Board (KSEB). This one floats on 1.25 acres of water surface of a reservoir, and has 1,938 solar panels, which have been installed on 18 ferro cement floaters with hollow insides. The project uses high-efficiency solar panels and a floating substation has been set up on the reservoir itself to convert the output into 11 kV.

While the concept of floating solar plants in India is old — it was first mooted by Tata Power way back in 2011 – they caught the fancy of energy developers only now. The Tata plant is on the backwaters of a dam located close to Tata’s hydro-electricity plant.

A second pilot project was started on the banks of the Sabarmati river in the province of Gujarat in 2012. It was awarded to SunEdison at a cost of about U.S. $2.7 million. The pilot project was developed by Gujarat State Electricity Corporation (GSECL) with support from Sardar Sarovar Narmada Nigam Ltd. (SSNNL).

But it’s only in the last few months that the activity has picked up. The government has floated eight floating solar power projects of capacities ranging between 2 MW to 1,000 MW.

The floating plants tie in with the Indian Government’s overall, rather ambitious, renewable energy plan.

India and China are both leading in this race. In 2017, Asia accounted for nearly two-thirds of the worldwide increase in renewable energy generating capacity, according to a report published in April by the International Renewable Energy Agency. Renewable energy capacity has nearly doubled over the past five years, reaching 918GW in 2017.

According to media reports, renewable energy firm Avaada Power is now in talks with various provincial governments in India to set up floating solar projects.

The company wants to increase its installed solar capacity to 5,000 megawatts (MW) in the next four years, from 1,000 MW at present, and a major chunk will come from solar energy. The floating solar segment has a potential to generate 300 gigawatts (GW) of power across the country.

Many provincial governments are also expected to call for tenders in this space soon. Also, India’s National Hydroelectric Power Corporation (NHPC) has announced its plans to set up 600 MW of floating solar capacity at the 1,960-MW Koyna hydel power project in the State of Maharashtra.

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Experts are optimistic that with India’s large network of water bodies, this trend of floating solar plants will become the norm soon, though care has to be taken while setting them up so that they do not affect marine life.

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This morning in metals, steel mills in China’s second-biggest steelmaking province are shutting down, U.S. Steel reports its Q1 financials and Ecuadorian officials are engaging in talks to potentially bring a copper refinery to the country.

Chinese Mills Shut Down in Pollution-Curbing Measure

Several steel mills in the Chinese city of Xuzhou have been shut down in a pollution crackdown effort, Reuters reported.

According to the report, at least three mills have been shut down until they meet anti-pollution rules.

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The three mills have a combined annual steel capacity of 4.25 million tons, according to the report.

U.S. Steel Brings in $18M in Q1

U.S. Steel made $18 million in Q1, the Northwest Indiana Times reported, a far cry from the $180 million loss it posted in Q1 2017.

According to the report, U.S. Steel reported its stronger balance sheet was aided by investment at its mills in addition to the Section 232 measures from the Trump administration last month.

Potential Copper Refinery in Ecuador

According to a Bloomberg report, Ecuadorian officials are in talks with foreign companies with respect to building a copper refinery in the country.

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According to the report, Rebeca Illescas, the Ecuadorian mining minister, said Chinese and Japanese companies might be interested in the project, in addition to Glencore.

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India and the United States may be at loggerheads over the recently announced trade tariffs on the import of metals, but that has not stopped the two nations from talking cooperation in other fields like oil and gas or renewable energy.

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On Tuesday, U.S. Secretary of Energy Rick Perry and the Indian Minister of Petroleum and Natural Gas Dharmendra Pradhan co-chaired the inaugural meeting of the U.S.-India Strategic Energy Partnership in New Delhi. This was a meeting following up on the announcement of the tie-up by U.S. President Donald Trump and Indian Prime Minister Narendra Modi in June 2017, in Washington, D.C.

The two countries will jointly look at ways to increase energy security; expand energy and innovation linkages across respective energy sectors; bolster strategic alignment; and facilitate increased industry and stakeholder engagement in the energy sector, the government said in a statement.

The Indian minister was quoted by the news agency Press Trust of India (PTI) as saying that the U.S. and India will pursue four primary pillars of cooperation: oil and gas; power and energy efficiency; renewable energy and sustainable growth; and coal.

A joint statement issued after the meeting reaffirmed the commitment by both sides to an early and full implementation of their civil nuclear partnership, including the planned supply of six Westinghouse reactors for the proposed nuclear power station in the Indian province of Andhra Pradesh. The cooperation in nuclear energy is being pursued through relevant bilateral mechanisms, the Times of India reported.

According to the PTI report, Perry indicated that recognizing the significance of civilian nuclear energy for meeting the growing global energy demands in a cleaner and more efficient manner, India and the U.S. were engaged in the implementation of the 2008 agreement for cooperation concerning peaceful uses of nuclear energy. Read more

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This morning in metals news, aluminum prices have risen to a seven-year-high following the London Metal Exchange’s ban on Rusal metal, the EU pushes back against the U.S.’s steel and aluminum tariffs, and renewable energy takes center stage among major U.S. companies.

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A 7-Year High for Aluminum Prices

Aluminum prices surged to their highest levels since 2011 in midst of the scramble that has resulted from U.S. sanctions on Russian producer Rusal, the Financial Times reported. On Monday, the price of aluminum rose more than 5% to push past $2,400 per ton, a seven-year high. This marks the biggest one-day gain for aluminum prices since 2011.

The London Metal Exchange has banned Rusal metal produced or sold after April 6, and the ban comes into effect tomorrow.

EU Challenges U.S. Tariffs

Although the European Union has a temporary exemption from the U.S.’s Section 232 tariffs on steel and aluminum, it is demanding compensation at the World Trade Organization, Reuters reported.

The EU is arguing that the U.S. tariffs were imposed only to protect U.S. industry, rather than for security measures. Read more

Back in 2016, after nearly 30 years of asking, the International Maritime Organization (IMO) — the U.N. body that polices the marine industry — finally succumbed to collective outrage and announced a change to take effect from 2020 leading to an effort to clean up ship pollution.

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IMO rules currently allow ships to burn fuel containing up to 4.5% sulfur — that is 4,500 times more than is allowed in car fuel in the European Union. This high-sulfur fuel — or bunker fuel as it’s known — is the dirtiest residual combustible material left over in refineries. When burned, it releases plumes of black smoke, familiar to anyone in a port area watching a large container or cruise liner leaving a haze over the port area.

Unlike most environmental air pollution issues that talk of carbon emissions, the marine industry is still facing issues addressed on land back in the 1950s and 1960s. Pollution from particulate matter (PM), nitrogen oxides (NOx), unburned hydrocarbons (UHC), sulfur oxides (SOx), carbon monoxide (CO), as well as carbon dioxide (CO2).

A ship is said to emit around 50 times as much sulfur as a modern lorry per metric ton of cargo, while of total global air emissions, shipping accounts for 18 to 30% of the nitrogen oxide and 9% of the sulfur oxides, in addition to carbon dioxide and carbon particulate matter. One possibly alarmist article in the Daily Mail suggested the largest ships can each emit as much as 5,000 tons of sulfur in a year – the same as 50 million typical cars, each emitting an average of 100 grams of sulfur a year. With an estimated 800 million cars driving around the planet, the article suggests that means 16 super-ships can emit as much sulfur as the world fleet of cars.

So, overdue then for the IMO to take action, what happens now? Will ship owners fit scrubbers to clean up emissions, or will they switch to low-sulfur gas oil distillates, a form of low sulfur diesel?

A Financial Times article quotes the SEB, a Nordic research house, saying only 2,000 of the 18,000 vessels that carried crude, dry cargo and other container ships would have scrubbers installed by 2020. Together they consume close to 4 million barrels a day of what is known in the industry as high-sulfur fuel oil. So, the rest will seek to be fuel-compliant, switching to low-sulfur derivatives.

You may think that would be a problem for refiners — not so.

Almost all European and North American refineries can produce low-sulfur fuel oil and not be left with unsaleable waste. But refiners are not going to miss the opportunity to raise margins from the switch to higher grades; indeed, the process has already begun.

In the European Union, the rule change will raise refining margins by an average of 60 cents, to $8.10 per barrel in 2020, JPMorgan is quoted as saying by Bloomberg. The fuel shift is already starting to appear in futures prices. In Europe, the premium that low-sulfur fuel oil attracts over its dirtier counterpart in January 2020 has grown by 66% since the start of the year, according to Bloomberg.

The SEB, quoted by the Financial Times, agrees, reporting the 2020 high-sulfur fuel oil to gas oil price spread traded at $220/metric ton on a forward basis in the early autumn of 2017. Then it blew out to as much as $350 at the start of 2018 and SEB expects a further widening to $450 later this year. With half the variable costs of a shipping line taken up by fuel, this heralds a rise in global freight rates as we near 2020 and shipping lines are required to pay for low-sulfur fuel oil.

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That is, of course, if a trade war doesn’t derail global growth and the ocean freight market first.

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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 headlines here on MetalMiner:

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India’s trying to do an OPEC in solar energy, screamed some headlines in Indian newspapers after the founding ceremony of the International Solar Alliance (ISA) was held here recently, witnessed by Indian Prime Minister Narendra Modi and French President Emmanuel Macron.

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It was during former French President Francois Hollande’s visit to India in January 2016 that Hollande and Modi laid the foundation stone for the ISA headquarters in Gurugram district in northern India, adjacent to the National Institute of Solar Energy (NISE).

For the uninitiated, the ISA is a treaty-based alliance of over 120 countries, most of them being “sunshine countries,” which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn. Its primary objective is to work for efficient exploitation of solar energy to reduce dependence on fossil fuels.

In addition to land, India has also contributed U.S. $27 million to build the ISA campus and has committed to meeting the operational expenditure of this body for the first five years.

Now comes the news that the French government will be committing €700 million in investment to this alliance.

Read more

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This morning in metals news, the extension of pollution-curbing efforts in China is offering a boost to iron ore and steel futures, an Australian steel company is nervous about the possibility of Section 232-related steel tariffs from the U.S., and Mexico fined a steel company for stock manipulation.

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Future is Bright for Iron Ore, Steel Futures

According to a report by the Financial Times, iron ore and steel prices rose to a year-to-date high after the announcement that winter capacity cuts in China’s top steelmaking region would continue.

Per the report, the local government of Tangshan, the biggest steelmaking city in China, announced Friday that cuts set to expire at the end of March will continue.

Australia’s BlueScope Awaits Section 232 Verdict as Turnbull Angles for Exemption

Despite assurances given last year by the U.S. that Australia would be exempted from Section 232-related tariffs, Prime Minister Malcolm Turnbull and some Australian companies might be getting concerned that those assurances won’t come to fruition.

Australian steelmaker BlueScope, for example, is one firm looking to secure assurances that it would be spared from possible hard-hitting tariffs, according to a report in The Sydney Morning Herald.

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Mexico Fined Steel Firm for Stock Manipulation

Mexican company Industrias CH was fined $159,764 in late November for stock manipulation, according to a Reuters report citing government data.