The Rare Earths Monthly Metals Index (MMI) held flat once again this month.
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.
China export control law to take effect Dec. 1
China’s legislature last month approved a new export control law that will go into effect Dec. 1, the state-run Xinhua news agency reported last month.
“China may take countermeasures against any country or region that abuses export-control measures and poses a threat to China’s national security and interests, according to the law,” Xinhua reported.
“The law also clarifies that technical documentation related to the items covered by the law is also subject to export-control stipulations.”
The law could impact exports of rare earths, for which China overwhelmingly dominates the global market.
As we have noted in this column before, the U.S. — especially the Pentagon — has long sought to diversify its rare earths supply chain. The U.S. earlier this year approved Phase 1 contracts with MP Materials and Lynas Corporation for work to develop rare earths separation facilities in the U.S.
South Korean-Australian joint project produces praseodymium, neodymium
Continuing the theme of various countries’ efforts to wean themselves off of rare earths dependence on China, Forbes recently reported on a joint venture between South Korea and Australia that has showed some promise.
The joint mineral processing project, Forbes notes, has so far produced neodymium and praseodymium. The two elements are used in permanent magnets in electric vehicles and, for praseodymium, renewable energy apparatus, like wind turbines.
In this month’s Rare Earths Monthly Metals Index (MMI) news: Texas Congressmen introduced the RARE Act; the European Commission unveiled its own raw materials action plan; and Chinese rare earths to the U.S. could plunge this year.
The Rare Earths MMI gained 8.3% for this month’s MMI reading.
“The United States is more dependent than ever on the importation of the resources that drive our economy, enable us to build advanced technology, and ensure our national security,” Gooden’s office said in a release. “Thirty-five of these rare earth minerals are designated by the Department of Interior as ‘critical’, and we source fourteen of them entirely from foreign suppliers. China is a leading supplier for twenty-two of the thirty-five. The RARE Act is specifically designed to change that.”
In late July, Australian rare earths firm Lynas Corporation announced it had signed a contract with the U.S. Department of Defense for Phase 1 work on a heavy rare earths separation facility in the U.S.
Like U.S. RARE Act, Europe presents critical minerals action plan
In a similar vein, the European Commission also recently announced its own action plan related to its raw materials supply security.
The plan also includes an updated list of those materials deemed critical.
The 2020 list includes heavy and light rare earths elements, in addition to raw materials like coking coal. New materials added to the 2020 list that were not on the 2017 list were titanium, lithium, bauxite and strontium.
The list contains 30 materials, up from the 11 materials included on the 2011 list.
“The supply of many critical raw materials is highly concentrated,” the European Commission said in a release. “For example, China provides 98 % of the EU’s supply of rare earth elements (REE), Turkey provides 98% of the EU’s supply of borate, and South Africa provides 71% of the EU’s needs for platinum and an even higher share of the platinum group metals iridium, rhodium, and ruthenium. The EU relies on single EU companies for its supply of hafnium and strontium.”
Chinese rare earths exports to the U.S. could be on the decline
The South China Morning Post reported China’s rare earths exports to the U.S. could fall by anywhere between one-fourth and one-third this year.
For instance, Adamas Intelligence forecast global consumption of NdFeB alloys could fall by as much as 9.3% this year. The figure comes on the heels of growth at a CAGR of 6.4% from 2015-2019.
However, Adamas did offer a silver lining.
“However, with the ongoing re-opening of key demand markets through the end of 2020 and into 2021, we expect demand for most end-uses and applications to rebound strongly in 2021 and 2022 and thereafter rise steadily through the end of the decade and beyond,” the research firm said.
Actual metals prices and trends
The Chinese yttrium price rose 1.8% month over month to $32.83 per kilogram as of Sept. 1. Terbium oxide 9.0% to $722.31 per kilogram.
Neodymium oxide surged 16.1% to $52,896.23 per metric ton.
Europium oxide fell 2.7% to $31.37 per kilogram. Dysprosium oxide fell 2.3% to $259.74 per kilogram.
This past week’s metals news covered everything from silver price movements to the copper price rise’s slowdown to the reimposition of tariffs on some Canadian aluminum.
We also broke down President Donald Trump’s recent proclamation with respect to reimposing the Section 232 tariff on some Canadian aluminum. MetalMiner’s Stuart Burns delved into the concern expressed by Ontario Premier Doug Ford: could Trump target Canadian steel next?
As our readers know well by now, Trump imposed Section 232 tariffs on imported steel and aluminum of 25% and 10%, respectively, in 2018. During the course of negotiations with Canada and Mexico over the United States-Mexico-Canada Agreement (USMCA) — the successor to NAFTA — the U.S. rescinded the tariffs in May 2019.
Now, at least for unalloyed aluminum from Canada, the tariff is back.
“First Cobalt Corp. today announced positive results from an independent feasibility study conducted on its permitted cobalt refinery in Ontario, Canada,” the firm said. “The study contemplates expanding the existing facility and adapting it to be North America’s first producer of cobalt sulfate, an essential component in the manufacturing of batteries for electric vehicles.
“The feasibility study demonstrates that the First Cobalt Refinery project can become a viable, globally competitive player in the North American and European electric vehicle (EV) supply chain. The study reinforces the strength of First Cobalt’s business strategy for a rapidly evolving EV market that is heavily dependent on supply from China.”
The facility would mark the first North American cobalt supply location.
According to the study, the site would boast annual production of 25,000 tons of battery grade cobalt sulfate, which would account for 5% of the global refined cobalt market.
The project comes with an initial capital estimate of $56 million, First Cobalt said, and an operating cost estimate of $2.72/pound.
First Cobalt said discussions are underway with Glencore regarding “commercial arrangements, financing and allocation of project economics,” while “third party and government funding opportunities” are also “under review.”
Tesla, Alameda County reach deal
Electric vehicle maker Tesla and Alameda County — home to Tesla’s lone North American production facility — have reached a deal to resolve a row over the state’s COVID-19 shelter-in-place measures and CEO Elon Musk’s defiance of those measures this week.
Earlier this week, Musk dared authorities to arrest him as production at Tesla’s Fremont assembly plant restarted in defiance of shutdown orders in effect since March 23.
According to the Mercury News, Tesla and the county reached a deal to allow for the automaker to restart operations lawfully.
“We reviewed the plan and held productive discussions today with Tesla’s representatives about their safety and prevention plans, including some additional safety recommendations,” the county said in a statement, as quoted by the Mercury News. “If Tesla’s Prevention and Control Plan includes these updates, and the public health indicators remain stable or improve, we have agreed that Tesla can begin to augment their Minimum Business Operations this week in preparation for possible reopening as soon as next week.”
The GOES MMI, which covers grain-oriented electrical steel, fell 5.9% this month.
Earlier this month, the U.S. Department of Commerce announced a new Section 232 investigation covering imports of laminations and wound cores for incorporation into transformers, electrical transformers and transformer regulators.
“The Department of Commerce will conduct a thorough, fair, and transparent review to determine the effects on the national security from imports of laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators,” Secretary of Commerce Wilbur Ross said.
Previously, the Trump administration used Section 232 of the Trade Expansion Act of 1962 to impose tariffs on imported steel and aluminum.
The U.S. GOES price fell 5.8% month over month to $2,418/mt.
Actual metals prices and trends
Japanese steel plate fell 0.2% month over month to $820.17/mt. Korean steel plate fell 3.7% to $494.28/mt. Chinese steel plate fell 0.6% to $569.78/mt.
This morning in metals news, the Democratic Republic of the Congo has reportedly locked down a mining province for 48 hours, the U.S. steel sector’s steel capacity utilization rate is 81.7% for the year through March 14 and Ford provided an update on its North American operations amid the coronavirus crisis.