Articles in Category: Environment


President Trump is not unused to controversy — some say he even courts it.

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So, a recent proposal following an executive order signed last April to widen energy exploration should come as no surprise.

The draft Five-year Outer Continental Shelf Oil and Gas Leasing Program has been enthusiastically welcomed by the oil and gas industry but vociferously opposed by a cross-party coalition of governors, lawmakers, environmental groups and the military.

The proposal is to open up 25 out of 26 regions of the outer continental shelf in which oil and gas exploration had been banned by former President Barack Obama near the end of his term. The ban blocked drilling about 94% of the outer continental shelf, but the Department of the Interior said the new proposal would open up 25/26 regions on the Eastern seaboard, the Californian coast, the Gulf of Mexico and in the Arctic.

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This morning in metals news, the top copper producer in China was forced to stop production on account of a pollution order, Chinese steel futures are down, and Chinese officials falsified data in order to avoid steel and aluminum capacity cuts.

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Jiangxi Gets the Government Red Light

Jiangxi Copper Co., China’s top copper producer, had to halt its production after a local government order related to pollution from its facility’s activities, Bloomberg reported.

According to a company official Tuesday, the local Chinese government made the order in an effort to cut pollution in the area. The halting of production is set to last for at least a week, according to the report.

Chinese Steel Futures Drop

Chinese steel futures fell as a result of dropping output during the winter season, Reuters reported.

A drop in demand during the cooler season also contributed to the futures decline. According to Reuters, the most active rebar contract on the Shanghai Futures Exchange (SHFE) dropped 3% to close at 3,787 yuan ($578.54) a ton.

Chinese Officials Fake Data to Avoid Capacity Cuts

According to the state-run China Youth Daily, officials in China’s northern Shandong province used fake data to help aluminum and steel producers avoid mandatory production curbs.

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According to the Ministry of Environmental Protection, officials in Binzhou used fake certificates and false data to obtain approval for the construction of 2.4 million tons of new aluminum production capacity in 2014.

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This morning in metals news, senior executives at Kobe Steel were aware of the company’s data tampering, copper drops from its two-month and a subsidiary of ArcelorMittal is paying $1.5 million to settle a lawsuit regarding pollution from its western Pennsylvania coke plant.

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Kobe Admits Executives Knew Abut Data Cheating

Kobe Steel admitted for the first time that senior level executives were aware of the data falsification going on at the company, Reuters reported.

As a result, three executives were “reassigned,” according to the report — in other words, demoted.

According to the steelmaker, about 500 customers received products with falsified specifications.

Copper Falls Off Two-Month High

After approaching a two-month high in the previous session, copper dropped Thursday, Reuters reported.

LME copper closed at $6,924 per ton on Wednesday.

ArcelorMittal Subsidiary Pays $1.5M in Pollution Suit

A subsidiary of ArcelorMittal is paying $1.5 million to settle a suit that its western Pennsylvania coke plant “showered the area with soot and other pollutants almost daily,” the Associated Press reported.

PennEnvironment, the environmental advocacy group behind the suit, said it believes the penalty is the largest secured by a citizen lawsuit in Pennsylvania history under the federal Clean Air Act, according to the Associated Press report.

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Electric Takes to the Skies

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Environment, Green

We are used to the idea of electric cars, electric bikes, electric buses and electric trains. Most are in their early stages, but are economically viable with varying degrees of subsidy and the technology is developing rapidly to improve efficiency and further bring down costs.

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But electric planes?

Well, there has been plenty of media attention on single-person transports, essentially beefed-up drones with four corner fans capable of carrying one, possibly even two, people. However, both technologically and economically, they are some way from being a viable product, without even beginning to consider the approval and regulatory process.

But two factors are driving the development of electric passenger aircraft that is encouraging the investment of considerable sums of money and fast-tracking potential roll-out of a viable product.

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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.

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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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