Articles in Category: Green

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This morning in metals news, the United States Trade Representative will soon consider whether to extend tariff exclusions granted last year for imports of certain products from China, the GFG Alliance is aiming to consolidate its steel operations and make the new consolidated entity carbon-neutral by 2030, and LME copper prices continue to make gains this month.

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

USTR to Consider Tariff Exclusion Extensions

Last December, the USTR granted tariff exclusions on $34 billion worth of imports from China.

With those exclusions set to expire later this year, the USTR will soon initiate a process to consider whether or not to extend them.

“The United States Trade Representative (USTR) will commence on November 1, 2019 a process for considering extending for up to twelve months certain exclusions from additional tariffs on Chinese imports that were granted last December and are set to expire on December 28, 2019,” the USTR said.

“In a Federal Register notice to be published this week, USTR will provide details on the process for submitting comments favoring or opposing specified tariff exclusions. The period for submitting comments will run from November 1, 2019 to November 30, 2019.”

GFG Alliance Eyes Carbon-Neutral Future

The GFG Alliance, which includes Liberty House steel plants around the world, is aiming to consolidate its steel production into a single global company: the Liberty Steel Group.

“A single global company with 18 million tonnes of rolled steel capacity annually is to be launched through a consolidation of GFG Alliance’s steel businesses, with an ambition to lead the industry towards a carbon-neutral future,” Liberty House announced Tuesday.

“The family-owned alliance led by Sanjeev Gupta today announces that Liberty Steel Group, which altogether employs 30,000 people in 10 countries, will be incorporated by the end of this year through a merger of GFG’s upstream and downstream steel manufacturing, mining and distribution businesses around the world.”

The new group will aim to be carbon-neutral by 2030.

“At the heart of the group’s mission will be an ambition to build on GFG’s existing GREENSTEEL strategy to aim for net carbon neutral status by 2030 – placing Liberty Steel Group on a pathway to become the first carbon neutral steel company in the world,” the company said. “This will include exploration of the best use of new technologies such as hydrogen generated from renewable power to produce steel.”

LME Copper Rises

The LME three-month copper price, after approaching MetalMiner’s short-term support price in early October, has since made incremental gains throughout the month.

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As of Monday, the LME three-month price rose to $5,910/mt, marking a 2.91% month-over-month increase, according to MetalMiner IndX data.

The Renewables Monthly Metals Index (MMI) slipped one point for an October MMI reading of 98.

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Glencore Signs Cobalt Supply Deal with China’s GEM

Mining giant Glencore has entered into a cobalt supply agreement with China’s GEM Co. Ltd. 

According to the miner, the five-year cobalt hydroxide deal calls for it to supply a minimum of 61,200 tons of cobalt between 2020 and 2024.

“GEM is very pleased to announce this long-term strategic co-operation with Glencore,” GEM Chairman Kaihua Xu said. “This agreement represents a major cornerstone in GEM’s cobalt sourcing strategy as it will support GEM’s continued contribution to the Chinese New Energy Market.

“In an ever-changing and fast evolving cobalt environment, GEM and Glencore have managed to maintain a very strong working relationship.

“By securing a key battery raw material, GEM clearly demonstrates its ability to implement and deliver its vision for an electrified, carbon-free transportation system.”

Nico Paraskevas, Glencore’s head of marketing for copper and cobalt, touted the partnership with the Chinese firm.

“The extension of our long established partnership with GEM further endorses Glencore’s important role in supplying the materials that enable the energy and mobility transition,” Paraskevas said. “Furthermore, this long term partnership provides Glencore with a stable outlet for a significant portion of its expected future Cobalt Hydroxide production.”

Earlier this year, Glencore announced a long-term cobalt supply agreement with the Brussels-based Umicore.

GOES

The GOES MMI, the index tracking grain-oriented electrical steel, fell 13 points for an October reading of 185.

The U.S. GOES price fell 6.6% month over month to $2,565/mt as of Oct. 1.

German steelmaker Thyssenkrupp, a producer of electrical steel, recently announced the mutual termination of the mandate of CEO Guido Kerkhoff, effective Oct. 1. Kerkhoff’s tenure ended after just over a year, having been appointed to the role in July 2018.

The news comes in what has been a challenging year for the German firm, which recently was relegated from the German blue-chip DAX index.

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Actual Metal Prices and Trends

U.S. steel plate fell 7.7% month over month to $736/st as of Oct. 1. Chinese steel plate fell 0.6% to $573.56/mt.

Korean steel plate fell 3.5% to $548.78/mt. Japanese steel plate fell 1.4% to $798.23/mt.

Chinese silicon rose 0.3% to $1,440.89/mt.

An interesting article in the Financial Times this week struck a chord with us at MetalMiner where we often debate how we see metals and manufacturing will go. As such, we often try to shoot holes in oft touted but poorly researched “trends” found in the popular media or espoused by politicians.

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One that crops up repeatedly is the inevitability of electric vehicles (EVs) burying the internal combustion engine (ICE), a proposition with which the Financial Times article would agree, it seems.

Anyone reading the mainstream media can be forgiven for thinking EVs are the fastest-growing sector of the automotive market. We are often bombarded with new model launches but, also, the ramifications of this surging demand are painted as an imminent threat to price stability for a host of key battery metals, like lithium, cobalt and nickel, or motor metals, like copper.

Indeed, the only trend said to be supporting copper prices is “surging” EV demand.

As the FT observes, EV numbers are growing.

Worldwide, some 5.1 million EVs were on the roads by the end of 2018, an increase of 2 million from the year before. Global sales of EVs are likely to be between 2.4 million and 2.9 million this year.

EV sales, however, are still being outstripped by growth in fuel-guzzling SUVs.

The between 7 million and 8 million EVs that should be on the road by the end of 2019 represent less than 0.1% of the 1.1 billion cars and other light vehicles that use internal combustion engines. Some 85 million ICE vehicles were sold worldwide in 2018 and, even from this much higher base, SUVs are experiencing rapid growth in outright numbers.

After growth of over 20% a year earlier in the decade, global demand growth for SUVs is now stabilizing — but at a high level of market share.

In the U.S., SUVs account for 45% of new car sales, the Financial Times reports.

But the trend is not limited to the U.S.

In Europe, SUVs take 34% of new sales, in China 42% and in India 23% the article advises, equating to some 25 million to 30 million annual SUV sales worldwide. While some of these may be hybrids, anyone who owns an SUV hybrid will know they are far from fuel efficient; in fact, they rarely even approach the level of fuel efficiency the manufacturers claim in their glossy sales brochures.

The reality is, despite governments and even oil companies pouring millions into infrastructure and commitment from traditional manufacturers — like all product lines having an EV version by 2020 or 50% of the fleet being EV by some future date) — Joe Public is not voting with his or her wallet to buy them. At least, not in enough numbers to drive a meaningful switch to EVs.

Indeed, the statistics suggest the switch is to larger, gas-guzzling SUVs, rather than EVs.

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If that is the case what does that say about metals demand?

It suggests, as far as the automotive market is concerned, it will continue to be driven by steel and aluminum, with support for copper — but not the tsunami of imminent demand for lithium ion batteries, as some have touted.

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This morning in metals news, Codelco is holding its 2020 copper premium flat for Europe, China’s yuan could see further devaluation and Alcoa’s Baie-Comeau smelter has received certification from the Aluminum Stewardship Initiative.

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Copper Premium Flat

According to Reuters, Codelco’s copper premium will be held flat for European customers in 2020.

Codelco’s premium will check in at $98/ton, according to the report.

Reuters Poll: Yuan to Slip Further Against the Dollar

Earlier this year, the yuan slipped in value compared to the dollar to an approximately 7-to-1 ratio, which makes imports from China more attractive.

According to a Reuters poll, the yuan could slip further to levels last seen during the financial crisis of 2008.

The yuan could fall as low as 7.20 to the dollar by the end of the year, according to the Reuters poll of foreign exchange strategists.

Alcoa Smelter Gains ASI Certification

Alcoa’s Baie-Comeau smelter in Quebec has received certification from the Aluminum Stewardship Initiative (ASI), a body that formulates and sets sustainability standards for the aluminum sector.

Alcoa now has ASI-certified facilities in three countries: Brazil, Spain and Canada.

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“From mine to metal, Alcoa is recognized as a sustainability leader,” said Michelle O’Neill, Alcoa’s senior vice president of government affairs and sustainability. “This latest ASI certification demonstrates our ongoing commitment to operate in a responsible manner while bringing long-lasting value to our stakeholders.”

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Indian Prime Minister Narendra Modi’s doubling of India’s renewable energy target by 2022 has made global headlines.

At the United Nations Climate Action Summit earlier this week, the Modi said India was now aiming to install 450 GW of renewable energy by 2022, more than double the previously promised 175 GW, The Hindu reported.

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India had committed to creating 175 GW of green energy capacity under the Paris Climate Agreement in 2015. The country has about 77 GW of installed renewable energy capacity, more than double its capacity as of five years ago; projects in the pipeline will add about 60 GW in renewable energy capacity.

Addressing the UN Summit last Monday, Modi reiterated India’s seriousness about doing something concrete on the renewable energy front. He highlighted other promises, including India’s plans to spend about U.S. $50 billion “in the next few years” on the Jal Jeevan Mission to conserve water, harvest rainwater and develop water resources.

In addition, he announced two international initiatives, the first being a platform with Sweden and other countries, for governments and the private sector to work together to develop low0carbon pathways for industry, plus a second initiative called the Coalition for Disaster Resilient Infrastructure. The U.K., Australia and island nations such as Fiji and the Maldives will be part of this coalition.

The Paris Climate Agreement is aimed at strengthening the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.

Modi added that India had a capacity of 4 GW and that the country is well on its way of adding 100 GW of solar power by 2022.

India is the world’s third-largest source of greenhouse gases after China and the United States. Experts here point out that while the Indian prime minister’s aims are laudable, there still was a question mark on whether they could be practically achieved or not.

The country has moved on to renewable power over the last five years, banking on solar power to lead the transformation.

A recent report by the International Energy Agency on worldwide energy investment noted renewable power investments in India were much ahead of those for fossil fuel-based power for the third year in a row. Spending on solar energy had also surpassed spending on coal-fired power generation for the first time in 2018.

But India still relies heavily on coal-powered energy and a large chunk of investments are still being made in that sector. There are reports that coal demand in India will nearly double from 2020 to 2040.

The Hindu Business Line newspaper reported environmentalists and experts in India had mixed feelings about the prime minister’s target. The report quoted environmentalist Chandra Bhushan as saying Modi had given a “positive roadmap” for India. He said the promise of increasing renewable energy capacity to 450 GW showed Modi’s seriousness about reducing the carbon emissions.

Others quoted in the report, though, were not so sure, arguing that renewable energy was costly and achieving the target may not be easy to achieve. NGO Social Action for Forests and Environment founder Vikrant Tongad expressed support for the move, but expressed reservations about how money will be raised to actualize the goal.

Environmental activist Gaurav Bansal told the Hindu Business Line that instead of blindly setting a target of increasing renewable energy, the Indian government must look into the concern that it does not harm the environment.

Meanwhile, showing its determination to go ahead with the renewables plan, Modi remotely inaugurated the Gandhi Solar Park at the UN headquarters in New York, the Hindustan Times reported.

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The inauguration came as part of the Gandhi@150 commemorative event marking the 150th birth anniversary of Mahatma Gandhi. The 50 kilowatt hour (kWh) rooftop solar park was built at a cost of U.S. $1 million. Each panel is powered to reach the max of 50 kWh of generation power, which will take the park’s annual output up to 86,244 kWh.

As part of its energy planning — especially on the oil and gas front — India has been actively looking at its neighbors in the past few months for support and supply.

Besides Russia, the other countries India is looking to for fulfilling its energy requirements is the United Arab Emirates (U.A.E.), Saudi Arabia and Qatar.

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On a visit of the U.A.E. earlier in the week, Dharmendra Pradhan, India’s minister of petroleum and natural gas and minister of steel, met his U.A.E. counterpart,Minister of Energy and Industry Suhail Mohamed Faraj Al Mazroui, and a host of other leaders from the region for talks on energy.

Pradhan also addressed the opening session of the 8th Asian Ministerial Energy Roundtable in Abu Dhabi on Tuesday.

Addressing the delegates at this conference, the Indian minister said he was sure that the shift in global energy consumption to Asia would be a reality soon.

Anticipating that, he said it is necessary for the change to be “rooted in energy justice,” a very important component of the energy vision of the present Indian government, the Orissa Diary reported.

He forecast that within the next two decades, Asia would be driving global economic growth, meaning developing economies would drive 80% of incremental global growth. India and China would be in the driver’s seat, accounting for more than half of that growth, he argued.

Thus, he said, it is imperative that low income, low per capita energy-consuming countries have access to technology and capital for their energy efficiency and clean tech plans. In turn, that access would provide better energy security than short-term interventions in fossil fuel supply and price, he said.

India’s energy vision, he explained, is based on four pillars: energy access, energy efficiency, energy sustainability and energy security. Energy justice was a major objective of this plan, he added, for which India had undertaken many initiatives.

India’s per capita consumption of energy is quite low compared with the global average. Pradhan said the Indian government is trying to improve the country’s energy supply to rectify the disparity.

India is the third-largest energy consumer in the world, with its share of total global primary energy demand set to double to 11% by 2040.

India has already laid down over 16,000 kilometers of gas pipeline and an additional 11,000 kilometers is under construction. The country is also aiming to produce 175 GW of renewable energy by 2022, with a solar target of 100 GW by 2022.

On his visit, Pradhan met Al Mazroui here and discussed ways of strengthening bilateral hydrocarbon engagement between the two countries.

India wants the U.A.E.’s increased participation in Phase II of India’s Strategic Petroleum Reserves Program coming up in India’s Odisha and Karnataka provinces, Sify reported (the U.A.E. is already a partner in Phase I).

According to news agency ANI, on Sept. 9, Pradhan met his Saudi counterpart Prince Abdulaziz bin Salman in Jeddah and discussed ways to boost energy ties between the countries.

Significantly, just a week prior to the minister’s Gulf visit, it was announced on a visit of Indian Prime Minister Narendra Modi to Russia that a consortium of Indian companies led by state player ONGC Videsh would acquire a 49% stake in Russia’s Vankor cluster oilfields, Oil and Gas Eurasia reported.

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Modi Russian President Vladimir Putin agreed to the deal as part of a wider range of investment agreements signed at the Eastern Economic Forum in Vladivostok. It is worth noting the agreement comes after over three years of protracted negotiations with Russia. With this agreement in place, India is set to become a strategic player in this sector in the Arctic region.

The Renewables Monthly Metals Index (MMI) dropped two points for a September MMI value of 99.

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First Cobalt Eyes Restart of Canadian Refinery

First Cobalt Corp., a Toronto-based firm, is looking into restarting its idled cobalt refinery in Canada, Reuters reported.

First Cobalt CEO Trent Mell said the company will begin assessing the condition of the plant next week.

Last month, the Canadian firm reached an agreement with Glencore by which the latter would fund a feasibility study for the idled refinery.

“First Cobalt Corp. is pleased to announce that it has entered into a US$5 million loan facility with Glencore AG to complete advanced engineering, metallurgical testing, field work and permitting associated with a recommissioning and expansion of the First Cobalt Refinery in Canada,” First Cobalt said in a prepared statement Aug. 26. “Upon completion of a positive definitive feasibility study for a 55 tonnes per day (“tpd”) refinery expansion in Q1 2020 and subject to certain other terms and conditions and satisfaction of conditions precedent, Glencore is prepared to advance an additional US$40 million to recommission and expand the Refinery.”

As Reuters noted, once operational the refinery would become North America’s lone producer of refined cobalt for the electric vehicle sector.

Cobalt Prices Surge

Speaking of Glencore, its announcement of a planned shutdown of its Mutanda mine this year has seen cobalt prices reach six-month highs, Reuters reported.

Earlier this year, Glencore said it would halt production at the Mutanda cobalt and copper mine in the Democratic Republic of the Congo (where a majority of the world’s cobalt is mined); the site is the world’s largest cobalt mine.

LME cobalt, after reaching $95,000 per ton in March 2018, lost nearly 75% of its value over the next 16 months, falling to $25,000 as of late July. Recently, the price has picked up, rising to $34,750 per ton as of Sept. 6.

GOES Price Surges 7.4%

The MMI for grain-oriented electrical steel (GOES) jumped 14 points for a September reading of 199.

The U.S. GOES coil price rose 7.4% month over month to $2,745/mt as of Sept. 1.

German steelmaker Thyssenkrupp — a prominent producer of electrical steel — is facing a period of significant uncertainty, MetalMiner’s Stuart Burns recently explained.

Faced with financial challenges, the company is mulling its next steps, which include the possible sale of its profitable elevator business.

Evidence of its struggles, the German firm will be booted from the country’s blue-chip stock index, the DAX, later this month. Thyssen, which merged with Krupp in 1999, was a founding member of the DAX.

“For both suppliers and customers of the group, the most worrying development must be the gradual reduction in credit rating,” Burns wrote. “If suppliers cannot insure their debt, they cannot in many instances supply, thus forcing the group to diversify and fragment its supply base.

“The group has survived many trials and tribulations over the decades. It will no doubt survive the current period, but it will be a different, much reduced Thyssenkrupp that emerges in the decade ahead.”

Another giant in the elevator industry, Finland’s Kone, has hired a law firm to advise it during its planned takeover bid of Thyssenkrupp’s elevator business, Reuters reported Monday.

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Actual Metal Prices and Trends

U.S. steel plate rose 2.0% month over month to $797/st as of Sept. 1.

Chinese steel plate fell 5.6% to $577.25/mt. Korean steel plate increased 0.7% to $568.51/mt. Japanese steel plate gained 2.5% to $809.83/mt.

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This morning in metals news, China’s trade activity with respect to aluminum and copper slowed in August, Nucor announced Chairman and CEO John Ferriola will be retiring at the end of the calendar year and residents of an Arizona town expressed staunch opposition to a proposed aluminum recycling plant.

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China’s Aluminum Exports, Copper Imports Fall

China’s imports of copper and exports of aluminum fell in August as the trade war with the U.S. escalated with the most recent exchange of tariffs.

China’s copper imports fell 3.8% in August compared with the previous month, Reuters reported, while aluminum exports fell 4.3% compared with July totals.

Nucor CEO to Retire

Nucor Chairman and CEO John Ferriola will retire at the end of this year, the company reported.

Ferriola has served as chairman since 2014 and CEO since 2013.

Nucor’s Board of Directors elected Leon J. Topalian, 51, to be president and chief operating officer, effective Sept. 5, 2019. Topalian will succeed Ferriola as CEO on Jan. 1, 2020.

Residents Oppose Proposed Arizona Aluminum Recycling Plant

Locals in the Arizona farming town of Wenden have come out in opposition to an aluminum recycling plant proposed for the town, azcentral.com reported.

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According to the report, residents urged officials from the Arizona Department of Environmental Quality not to grant an air-quality permit for the proposed Alliance Metals plant.

Before we head into the Labor Day weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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The U.K.’s Department for Business, Energy and Industrial Strategy (BEIS) has issued a call for evidence to help inform a planned £250 million Clean Steel Fund.

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According to the BEIS, the fund will “support the UK steel sector to move to a decarbonisation pathway compatible with net zero.”

The government is seeking evidence to help it develop the “detailed design” of the fund, including feedback regarding potential “barriers to realising clean steel ambitions” and “the opportunities to be gained in overcoming these.”

The U.K. has set a target to reduce greenhouse gas emissions by 100% — compared with 1990 levels — by 2050, pursuant to the Climate Change Act of 2008.

According to the BEIS, the primary goals of the proposed Clean Steel Fund are to help facilitate the transition to “lower carbon iron and steel production” to help the sector reach net zero emissions (per the Climate Change Act) and to maximize “longevity and resilience” in the sector by “building on longstanding expertise and skills and harnessing clean growth opportunities.”

“We also intend to establish a new £100 million Low Carbon Hydrogen Production Fund, to support the deployment of low carbon hydrogen production at scale,” the BEIS said. “This could enable a pathway to lower carbon steel production and support broader efforts to decarbonise industry.”

UK Steel, an industry group that champions U.K. steelmaking, responded positively to the call for evidence.

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“Today’s announcement of the Clean Steel Fund is extremely positive news for UK steelmakers and the whole of the UK’s decarbonisation efforts,” UK Steel Director General Gareth Stace said. “The fund is a vital step towards further reducing our carbon footprint here in the UK and will cement our position in a future low-carbon world.”

The BEIS’s 22-page call for evidence document can be found here.