Articles in Category: Green

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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 coverage here on MetalMiner, including coverage of: India’s Hindalco, U.S. steel capacity utilization, Trump’s trade deals, the Department of Commerce’s circumvention rulings on steel routed through Vietnam, U.S. industrial production and more.

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More and more companies are touting their newly acquired “green” bona fides in a world that is becoming increasingly conscious of climate change.

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With the 2015 Paris climate accord and other government initiatives targeting reduction of emissions, companies have been quick to point out efforts toward those goals (although more cynical assessments would argue these announcements are intended as branding mechanisms, and that claims of “carbon-free” production or “greenness” must be looked at with some skepticism).

Australian miner Rio Tinto did just that recently, touting its Aluminum Stewardship Initiative (ASI) certification for its mines in Australia and New Zealand.

Rio Tinto said the following mines gained Performance Standard and Chain of Custody certifications from the ASI: the Amrun and Weipa bauxite mines; Yarwun alumina refinery; and the Bell Bay and NZAS aluminum smelters.

“This certification expands Rio Tinto’s offering of independently certified, responsibly produced aluminium to customers around the world,” Rio Tinto Aluminium chief executive Alf Barrios said. “It continues our leadership on responsible aluminium production from mine to metal, so that our customers can meet the growing demand from consumers for sustainably sourced materials.”

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According to Rio Tinto, ASI certification means “customers can be assured that the aluminium they purchase has been produced to the highest environmental, social and governance standards, ranging from greenhouse gas emissions to human rights.”

“In 2018, Rio Tinto became the first producer to offer ASI Aluminium through a ‘chain of custody’ spanning the Gove bauxite mine in Australia to its alumina refinery, aluminium smelters and casthouses in Quebec, Canada, adding its operations in British Columbia in 2019,” Rio Tinto said.

Bell Bay Aluminium has an energy supply contract with Hydro Tasmania, which is Australia’s largest generator of renewable energy, according to Rio Tinto.

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This morning in metals news, the United States Trade Representative released a statement on the U.S.-China partial trade deal, copper prices fell back from a seven-month high Thursday, and Norsk Hydro signed a $1,600 million credit facility linked to its emissions targets.

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U.S., China reach partial trade deal

Although the agreed-upon “phase one” trade deal is still short on publicly available details, the United States Trade Representative (USTR) did note some tariff implications in a release Friday.

According to the USTR, the U.S. will maintain a 25% tariff on $250 billion worth of Chinese goods and a 7.5% tariff on $120 billion worth of goods.

Copper drops after hitting seven-month high

Copper prices fell Thursday after hitting a seven-month high, Reuters reported.

LME copper reached as high as $6,174 per ton yesterday, according to Reuters, its highest since May 10.

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Hydro signs credit facility linked to emissions goals

Norwegian firm Norsk Hydro announced Thursday it had signed a U.S. $1.6 billion credit facility that is tied to its emissions goals.

“The margin under the facility will be adjusted based on Hydro’s progress to meet its target to reduce greenhouse gas emissions by 10% by the end of 2025,” Hydro said in a statement.

“Hydro has set a new climate roadmap towards 2030 where 10% reduction in climate emissions by 2025 is an important milestone to achieve 30% reduction by 2030.”

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This morning in metals news, the European Steel Association (EUROFER) offered its reaction to the new European Green Deal, China’s steel output could fall next year and China’s imports of iron ore dropped in November.

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EUROFER lauds carbon border adjustment mechanism in European Green Deal

This week, the E.U. unveiled the European Green Deal, which EUROFER largely supported in a statement Wednesday.

“We welcome the aims of the European Green Deal,” said Axel Eggert, EUROFER director general. “In charting a series of sectoral and specific policy plans, it is clear policymakers take seriously the need to transition to a carbon-neutral future with industry, rather than without it.”

EUROFER also highlighted the initiative’s carbon-neutral ambitions, particularly through the lens of steelmaking and competition against lower-lost, less “green” steel producers.

“It is now of utmost importance to develop a regulatory framework that creates markets for CO2-neutral products: these have significantly higher production costs, for example because of the use of highly-priced hydrogen instead of coking coal in the steelmaking process,” Eggert said. “Policymakers must establish – jointly with us – how ‘green’ steel can compete against carbon-intense, low-cost steel imports that have a significantly higher CO2 footprint than EU-made steel.

“The EU seeks to make Europe the first carbon-neutral continent by 2050, which is a high ambition. The steel industry is already working on a range of low- and carbon-neutral solutions that could lead to reductions in CO2 emissions from steelmaking by up to 95% in 2050 under an optimum regulatory framework. It is why a partnership on clean steel – as well as other means to ensure the steel industry remains competitive even as it becomes carbon-lean – is so essential.”

China’s steel output to drop in 2020?

Despite mandated winter production cuts over the past few cold seasons, China’s steel output has continued to ascend.

Next year, however, the country’s steel output is expected to come down from its record high set this year, according to the China Metallurgical Planning and Research Institute.

According to Reuters, the institute forecasts steel output will fall to 981 million tons next year, down from 988 million tons this year.

China’s iron ore imports drop

In other China news, the country’s imports of iron ore fell in November, Reuters reported.

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China imported 90.65 million tons of the steelmaking material last month, down 2.4% from the October import total, according to the report.

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The Renewables Monthly Metals Index (MMI) dropped one point this month for a December MMI reading of 96.

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Glencore inks long-term cobalt supply deal with SK Innovation

Glencore announced another cobalt supply deal, this time with SK Innovation.

The deal will run for a six-year period and includes up to 30,000 tons of cobalt contained in hydroxide between 2020 and 2025.

“In signing this contract with the world’s largest producer of cobalt, SK Innovation has secured supply of a metal which is both core to battery production and in short supply,” SK Innovation said in a prepared statement. “SK Innovation stands ready to produce the batteries required to meet the significant anticipated battery demand.

“The electric vehicle (EV) battery market is growing fast and the total market size will be c.US$150bn in 2025, larger than the semiconductor market. Accordingly, cobalt demand will keep increasing. We assume global cobalt demand for EV batteries will be 32kt in 2020 and 92kt in 2025. With this contract, SK Innovation can produce batteries for 3 million EVs.”

Madagascar to increase mining royalties

Reuters recently reported the government of Madagascar has drafted a law calling for the increase of mining royalties for nickel and cobalt, bringing the rate up to 4% from 2%.

According to the report, the proposed law also calls for allowing the government to take an at least 20% stake in any mining production in the country.

Neodymium potentially down the road for Lynas venture

As we noted in out Rare Earths MMI report, Australian miner and processor Lynas Corp. earlier this year signed an MOU with a Texas-based firm to build a rare earths separation facility in the U.S.

The company said the plant would initially focus on heavy rare earths, like dysprosium and terbium.

However, the company added it could incorporate separation of light rare earths, like neodymium, at a later date.

GOES fall 24 points

The GOES MMI, which tracks grain-oriented electrical steel, took a fall this month.

The GOES coil price fell 13.1% from last month’s reading, down to $2,171/mt.

In other GOES news, the lone U.S. producer of electrical steel, AK Steel, is being acquired by Cleveland-Cliffs, as MetalMiner’s Lisa Reisman explained last week.

“The transaction will combine Cliffs, North America’s largest producer of iron ore pellets, with AK Steel, a leading producer of innovative flat-rolled carbon, stainless and electrical steel products, to create a vertically integrated producer of value-added iron ore and steel products,” AK Steel said in a prepared statement. “The combined company will be ideally positioned to provide high-value iron ore and steel solutions to customers primarily across North America.”

Elsewhere, Germany’s thyssenkrupp AG continues restructuring efforts and recently outlined a series of priorities for the firm going forward.

Among other efforts, the German firm continues to work toward an eventual IPO for its elevator segment.

“The preparations are timed in such a way that thyssenkrupp is expected to be able to make a sound decision in the first quarter of 2020 on which options to pursue primarily,” the company said. “Internal preparations for an IPO will be completed by the end of the year. thyssenkrupp has already received indicative offers from strategic and financial investors. Based on a due diligence, thyssenkrupp expects binding offers as a basis for potential negotiations in the next year.”

Thyssenkrupp, a producer of electrical steel, posted a net loss of €260 million for fiscal year 2018-2019.

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Actual metals prices and trends

Japanese steel plate fell 1.4% to $785.15/mt as of Dec. 1. Korean plate fell 7.1% to $516.24/mt. Chinese steel plate rose 1.3% to $580.16/mt.

U.S. steel plate fell 9.9% to $616/st. As we have noted previously, plate often does not follow the same trend as other forms of steel. For example, HRC, CRC and HDG prices have been on the rise over the last month, but plate has not joined in the upward momentum.

Chinese cobalt cathodes rose marginally to $94,561.10/mt.

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This morning in metals news, Tata Steel is making job cuts across its European operations, U.S. Steel announced it plans to reduce its greenhouse gas emissions by 20% by 2030 and copper ticked up again Monday.

Job Cuts Coming to Tata Steel’s European Operations

Steelmaker Tata Steel will cut jobs throughout its European operations, Reuters reported, where the company employs approximately 20,000 people.

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According to the report, Tata says there won’t be any plant closures.

U.S. Steel Announces Emissions Target

U.S. Steel announced last week it plans to cut emissions by 20% by 2030.

“The company has set a goal to reduce its global greenhouse gas emissions intensity by 20 percent, as measured by the rate of carbon dioxide (CO2) equivalents emitted per ton of finished steel shipped, by 2030 based on 2018 baseline levels,” the company said. “This target will apply to U. S. Steel’s global operations.”

The steelmaker also outlined initiatives toward that goal.

“U.S. Steel’s greenhouse gas emissions intensity reduction goal will be achieved through execution of multiple initiatives,” the company said. “These include the development of electric arc furnace steelmaking at U.S. Steel’s Fairfield Works and at Big River Steel, the first LEED-certified steel mill in the nation, in which U.S. Steel recently acquired a minority interest with an option to acquire the remainder over the next four years. Electric arc furnace steelmaking relies on scrap recycling to produce new steel products, capitalizing on steel’s status as the most recycled material on earth.  Further carbon intensity reductions are expected to come from the company’s introduction of state-of-the-art endless rolling and casting technology and construction of a cogeneration facility at its Mon Valley Works announced in May, as well as implementation of ongoing energy efficiency measures, continued use of renewable energy sources and other process improvements.”

Copper Makes Gains

Copper prices rose for the second straight session Monday, Reuters reported.

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LME three-month copper ticked up 0.1%, while SHFE copper rose 0.3%, according to the report.

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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.

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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.”