Articles in Category: Green
aluminum price

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This morning in metals news: the LME three-month aluminum price has continued to rise in the leadup to the Thanksgiving holiday; Rio Tinto signed a new agreement to strengthen its partnership with China’s Tsinghua University; and, lastly, New York state is one of the U.S. leaders in renewable energy generation.

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LME three-month aluminum prices gains

Like other metals, the LME three-month aluminum price has showed significant upward momentum this year.

The LME-three month aluminum price closed last week at $1,995 per metric ton. Aluminum is up 8.22% from the previous month.

Furthermore, since its April trough, the price has increased 37%.

Rio Tinto strengthens partnership with Tsinghua University

Miner Rio Tinto announced it is strengthening its partnership with China’s Tsinghua University.

The firm said it is committing an additional 30 million yuan ($4.5 million) over the next five years to support research projects at the Tsinghua-Rio Tinto Joint Research Centre for Resources, Energy and Sustainable Development.

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merger and acquisition

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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 Tata Steel and its attempt to spin off its European assets, the U.S.’s rising steel capacity utilization rate, China’s economic recovery and its impact on metals prices, and much more:

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Week of Nov. 16-20 (Tata Steel looks for buyers, capacity utilization rises and more)

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renewables

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This morning in metals news: Nucor Corporation has signed a power purchase agreement with EDF Renewables North America; the Pilbara Ports Authority reported an 11% year-over-year increase in throughput in October; and, lastly, Minnesota’s mining rules are getting another look.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

Nucor signs power purchase agreement with renewables firm

Steelmaker Nucor has signed a power purchase agreement with EDF Renewables for 250 megawatts of new solar energy in Texas.

The agreement is for 15 years.

“Nucor is one of the most efficient and cleanest steel producers in the world, and we are always looking for ways to reduce our carbon footprint. That is why we are proud to make our production process even cleaner by supporting the development of this solar energy project,” said Leon Topalian, president and CEO of Nucor Corporation. “We are already North America’s largest recycler, and supporting the addition of more clean power to the regional grid via this agreement further demonstrates Nucor’s commitment to sustainable steelmaking.”

Pilbara Ports Authority reports October activity

The Pilbara Ports Authority reported monthly throughput of 62.5 million tonnes in October.

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London Metal Exchange

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Readers of a recent Financial Times article reporting the opposition of major primary aluminum producers Norsk Hydro and Hindalco Industries to the LME’s proposed “green aluminum” contract may feel the primary producers are swimming against the tide of history.

Aluminium is a core material needed for increasing efficiency and lowering carbon dioxide emissions by reducing weight and improving recycling. (Copper and lithium also fall under this category.)

Exhibiting low-carbon footprints themselves is increasingly becoming a deciding factor for manufacturers choosing one supply source over another.

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

‘Green aluminum’ contract

The LME’s proposed “green aluminum” or low-carbon aluminum contract intends to help determine to what extent the global market is willing to pay a premium for aluminum that meets an as yet undetermined carbon threshold. That threshold is mooted in the LME’s Sustainability Discussion Paper, available here, to be about 4.5 kg of CO2 per kg of aluminum.

By contrast, the average for Europe is 8.6 kg. For China – where much of primary production is based on coal-fired power production – it is about 20 kg.

To be fair, the LME does not appear totally wedded to the idea yet.

It is consulting with the market to test the appetite for voluntary disclosure of a producing mill’s product. As such, a mechanism can be developed to measure the willingness of consumers to pay a premium for warrants that met a lower carbon content. Russia’s Rusal or En+ material and — ironically you may think in light of the opening paragraph — Norsk Hydro’s metal typically meets this low-carbon threshold. Much of their production is based on hydropower, with carbon contents estimated to be even below 4 kg.

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French company Total’s love affair with India’s renewables sector continues.

Already having major joint ventures with India’s Adani Group firms for renewable energy projects, gas distribution, and other projects, Total’s chief executive Patrick Pouyanne said last week that his company aimed to increase its renewable energy portfolio in India to 6 gigawatts by 2025, per VCCircle.

Pouyanne was speaking in an online interview on the sidelines at the India Energy Forum by CERAWeek.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

India’s renewable sector grows

In mid-October, the Competition Commission of India approved a transaction between Adani Green Energy and a subsidiary of Total to transfer 2.1 gigawatts of solar and wind energy assets to a joint venture company. Adani Green Energy and Total’s subsidiary each have 50% holding in the joint venture, Clean Technica reported.

Earlier in the year, Total and Adani Green Energy Ltd (AGEL) created a 50:50 joint venture. Adani transferred its solar assets in operation to the JV. These projects are in 11 Indian states and have a cumulative capacity of over 2 GW.

What’s more, all of them benefit from nearly 25-year power purchase agreements (PPA) with national and regional electricity distributors.

Total also has a 50:50 JV with Adani for a liquefied natural gas (LNG) import terminal. The terminal, located in the Indian province of Odisha, would have a capacity of 5 million tons per annum. It also has a 37.4% stake in Adani Gas Ltd, the publicly traded company for city gas distribution.

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nickel

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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 nickel market; aluminum prices on the SHFE and LME; China’s metals rebound; and much more.

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Week in Review, Oct. 12-16 (nickel market, China’s metals rebound and more)

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

October 2020 MMI trends chartThis morning in metals news: the October Monthly Metals Index (MMI) report is out; the E.U. is reportedly considering imposing carbon border fees; and Alcoa released its third-quarter financial earnings.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

October 2020 MMI report is out

For followers of our MMI series, the October 2020 MMI report is out and available for download.

The report covers 10 indexes: Automotive, Construction, Rare Earths, Renewables, GOES, Global Precious, Aluminum, Copper, Stainless Steel and Raw Steels.

To download the report, visit the MMI landing page.

E.U. mulls carbon border fee

Aside from the October 2020 MMI report, as Stuart Burns alluded to in his report earlier today, the E.U. is considering carbon border fees, Reuters reported.

Citing a senior official, Reuters reported the fees would apply to polluting goods for steel, cement and electricity.

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According to the Financial Times, China’s President Xi Jinping surprised the global community by announcing last month a hugely ambitious plan to improve China’s environment and make the country carbon-neutral by 2060.

In addition, he said the country’s emissions would peak before 2030.

But does this really mean anything? If it does, what impact will it have on the country’s massive steel industry? The steel industry, of course, is the source of a significant proportion of the country’s carbon emissions?

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China’s environment and emissions figures

Firstly, let’s look at the scale of the proposition.

China is the world’s largest emitter of greenhouse gases (such as carbon dioxide and methane).

Last year, China’s emissions accounted for roughly 27% of the global total. The country’s total accounted for more than the U.S., Europe and Japan combined, the Financial Times reported.

Furthermore, the country consumes more coal than the rest of the world put together. In addition, China continues to commission new coal power plants.

On the one hand, China also leads the world in the deployment of solar power, wind power and electric vehicles. Its energy-efficiency policies are ambitious and successful. Significantly, there are no known climate change deniers in the Chinese leadership.

But is the pledge meaningful?

It contrasts poorly with that made by almost 70 countries and the E.U. Those countries have already pledged to make their economies “net-zero” greenhouse gas emitters by mid-century, or 10 years earlier than China’s pledge.

And the 2030 peak emissions date is a rehash of a commitment made back in 2014, suggesting peak emissions could be reached well before 2030 and the authorities are simply back-sliding.

Difficult changes

The scale of the challenge vis-a-vis China’s environment and emissions is considerable.

More than 85% of China’s primary energy last year came from coal, oil, and natural gas, all of which produce carbon dioxide. This came despite massive investment in solar and wind.

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India’s renewable energy sector, the fourth-most attractive renewable energy market in the world today, is all set to get a new player.

U.S.-based ArcVera Renewables, which specializes in consulting and technical services, has announced its entry into India’s solar, wind and hybrid energy storage market.

ArcVera has opened up an office in Bengaluru in the southern part of India. From there, it will deliver its expertise to project developers, lenders and investors — not only in India but also neighboring Southeast Asia and Pacific Rim countries.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

ArcVera joins the fray in India’s renewable energy sector

The Colorado-based ArcVera Renewables has over 40 years of global experience. The firm is now providing expert technical, financial and independent engineering services for stand-alone energy storage or hybrid projects.

Gregory S. Poulos, CEO of ArcVera Renewables, told the Indian media a combination of factors had made the company take this decision to expand. He said, on the one hand, India is a large and rapidly growing renewables market. With the entry of energy tenders and hybrid project requirements, the country presents an even more complex and competitive market.

On the other hand, a competitor departure from the Indian wind market left a vacuum that ArcVera is ideally positioned to fill, Poulos added.

What also drove ArcVera’s decision is the fact that Indian developers and investors are on the lookout for technical expertise to lower project risk and raise project value.

ArcVera’s services cover the full project life cycle. That cycle includes: finance-grade resource assessments, project design, technology assessments, financing, M&A, due diligence, construction, operations and repowering.

The company has atmospheric scientists, engineers, and data analysts.

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Europe’s steel industry appears to be at a crossroads.

Hurting before the coronavirus pandemic-induced lockdowns, the industry struggled with overcapacity, high costs, weak demand and competition from lower-cost sources (like China and Russia).

The lockdowns decimated demand. Major consumers, like the automotive sector, which takes something like 20% of European production of flat-rolled steel, according to the Financial Times, have now largely reopened.

Even so, auto sales are not expected to recover to pre-pandemic levels until 2025, according to major European component supplier Continental.

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

Could M&A be the answer for European steelmakers?

Mergers and consolidation have traditionally been posed as solutions. Bigger is better and economies of scale will solve the challenge of profitability, the argument goes.

However, many are arguing European steelmakers should worry less about consolidation and more about rationalization.

Furthermore, politicians are among those reluctant to consider job losses in their own regions.

The steel industry employs some 330,000 people across the continent. About 40% of the workforce is currently on some form of short working or under threat of redundancies.

However, if the government does not support closures with retraining and regional enterprise policies to support alternative employment opportunities, the European steel industry will limp on with, at best, marginal profitability and poor capacity utilization.

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