Articles in Category: Minor Metals

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The Renewables MMI (Monthly Metals Index), after a significant surge last month, sat at 100 for the second consecutive month.

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Within this basket of metals, the Japanese steel plate price rose, as did the price of Chinese and American steel plate. U.S. steel plate, in fact, rose 5.5% month over month.

U.S. grain-oriented electrical steel (GOES) coil also jumped in price.

As for the trio of rare and minor metals in this MMI, cobalt cathodes fell 1.1%, while silicon dropped slightly and neodymium made a small gain.

Cobalt Costs

According to a report by the Financial Times, changes to the mining code in the Democratic Republic of Congo will lead to higher costs for consumers of the metal.

According to the report, President Joseph Kabila on Wednesday said he would sign a new order after meeting with representatives from some of the big miners with business in the country, including Glencore, Molybdenum and Ivanhoe Mines. 

Cobalt is used in batteries for electric vehicles (EVs), among other things, making it an especially prized material as EVs gain popularity. As such, with a majority of the world’s cobalt being mined in the DRC, political machinations in the country have a significant impact on the metal’s price.

According to the Financial Times, the code could see royalties on cobalt — plus other metals, like copper and gold — rise from 2% to 10%.

Senators Lobby for Electrical Steel Protection in 232

The Journal-News reported on a trio of U.S. senators who lobbied Trump to prioritize electrical steel in the Section 232 trade remedy process.

The only remaining maker of electrical steel in the country, AK Steel, was unlikely to benefit from the Section 232 trade remedy proposal, according to Sen. Rob Portman (R-OH).

“We write you today to share our concerns that your proposed section 232 remedy is incomplete when it comes to electrical steel,” Portman and two other senators said in their letter to Trump, according to the Journal-News. “We write on behalf of a constituent company, AK Steel, which is the last domestic producer of grain-oriented electrical steel (GOES). Since the remedy, as currently constructed, does not include electrical cores and core parts, the remedy will not be effective for the domestic electrical steel market.”

In the senators’ letter, they requested the president add a trio of HTS codes to the duty order.

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The Rare Earths MMI (Monthly Metals Index) held steady, notching a reading of 20 for our March MMI.

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Within the basket of metals, Chinese yttrium dropped slightly, while terbium metal picked up in price.

Europium oxide also dropped slightly, while dysprosium oxide picked up an extra dollar per kilogram.

New Toyota Magnet Not Dependent on Some Rare-Earth Minerals

According to a report by Ars Technica, a new magnet developed by automaker Toyota will not be dependent on some key rare-earth minerals.

Toyota announced it had invented a magnet — for application in electric vehicles — that uses much less of the rare-earth mineral neodymium. According to Toyota, it had developed “the world’s first neodymium-reduced, heat-resistant magnet.”

Of course, cost is a major restraining factor when it comes to electric vehicle (EV) growth. Materials needed for EV batteries, like neodymium, are costly, and many battery makers have sought to reconfigure the percentages of metals used in their batteries to phase out more cost-prohibitive materials (like cobalt, for example).

In addition to reducing the use of neodymium, the new magnet also completely phases out two other rare earth minerals.

“The newly developed magnet uses no terbium (Tb) or dysprosium (Dy), which are rare earths that are also categorized as critical materials necessary for highly heat-resistant neodymium magnets,” according to the Toyota statement. “A portion of the neodymium has been replaced with lanthanum (La) and cerium (Ce), which are low-cost rare earths, reducing the amount of neodymium used in the magnet.”

According to the announcement, the new magnet reduces the amount of neodymium used by as much as 50%.

Europium Market to Hit $308.9M by 2025

The global europium market is set to hit a value of $308.9 million by 2025, according to a recent report by Reportbuyer.

According to the report, consumer electronics, automotive, semiconductors, and energy and mining  are the sectors leading the charge in the growth of europium.

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Earlier this month, the U.S. Department of the Interior announced that it is seeking public comment on a recently released draft list of minerals “considered critical to the economic and national security of the United States.”

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An executive order from President Trump in December directed the secretary of the interior (in coordination with other agencies) to publish a list of critical minerals in the Federal Register. As of Feb. 27, there were 102 public comments listed on the Federal Register.

“The work of the USGS (United States Geological Survey) is at the heart of our nation’s mission to reduce our vulnerability to disruptions in the supply of critical minerals,” said Dr. Tim Petty, assistant secretary of the interior for water and science, in an Interior Department release. “Any shortage of these resources constitutes a strategic vulnerability for the security and prosperity of the United States.”

The published list covers minerals used in a broad range of practical applications, from catalytic agents to batteries.

According to the Executive Order signed Dec. 20 by Trump, a critical mineral is defined according to a trio of components:

  • A non-fuel mineral or mineral material essential to the economic and national security of the U.S.
  • The mineral has a supply chain vulnerable to disruption
  • The mineral serves an essential function in the manufacturing of a product, “the absence of which would have significant consequences” for the economy and national security

According to the order, within 180 days of publication of the list of minerals, the secretary of commerce — in coordination with the secretaries of defense, the interior, agriculture and energy — will submit a report to the president that will outline, among other things, a strategy to reduce the U.S.’s reliance on critical minerals and an assessment of “progress toward developing critical minerals recycling and reprocessing technologies.”

The full list of critical minerals from the Department of the Interior, including common applications, is as follows:

  • Aluminum (bauxite), used in almost all sectors of the economy
  • Antimony, used in batteries and flame retardants
  • Arsenic, used in lumber preservatives, pesticides, and semi-conductors
  • Barite, used in cement and petroleum industries
  • Beryllium, used as an alloying agent in aerospace and defense industries
  • Bismuth, used in medical and atomic research
  • Cesium, used in research and development
  • Chromium, used primarily in stainless steel and other alloys
  • Cobalt, used in rechargeable batteries and superalloys
  • Fluorspar, used in the manufacture of aluminum, gasoline, and uranium fuel
  • Gallium, used for integrated circuits and optical devices like LEDs
  • Germanium, used for fiber optics and night vision applications
  • Graphite (natural), used for lubricants, batteries, and fuel cells
  • Hafnium, used for nuclear control rods, alloys, and high-temperature ceramics
  • Helium, used for MRIs, lifting agent, and research
  • Indium, mostly used in LCD screens
  • Lithium, used primarily for batteries
  • Magnesium, used in furnace linings for manufacturing steel and ceramics
  • Manganese, used in steelmaking
  • Niobium, used mostly in steel alloys
  • Platinum group metals, used for catalytic agents
  • Potash, primarily used as a fertilizer
  • Rare earth elements group, primarily used in batteries and electronics
  • Rhenium, used for lead-free gasoline and superalloys
  • Rubidium, used for research and development in electronics
  • Scandium, used for alloys and fuel cells
  • Strontium, used for pyrotechnics and ceramic magnets
  • Tantalum, used in electronic components, mostly capacitors
  • Tellurium, used in steelmaking and solar cells
  • Tin, used as protective coatings and alloys for steel
  • Titanium, overwhelmingly used as a white pigment or metal alloys
  • Tungsten, primarily used to make wear-resistant metals
  • Uranium, mostly used for nuclear fuel
  • Vanadium, primarily used for titanium alloys
  • Zirconium, used in the high-temperature ceramics industries

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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 stories here on MetalMiner:

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  • What’s up with aluminum? After a strong 2017 the metal hasn’t seen as much upward movement as some other base metals. Our Stuart Burns looked into why that might be.
  • Meanwhile, the British steel industry could be due for a jolt of investment, leading to some signs of a recovery, Burns writes.
  • There’s a new name entering the electric vehicles fray, Burns writes, and it might not be a brand you’d associate with the automotive sector.
  • In light of the markets’ recent volatility, Irene Martinez Canorea surveyed the relationship between the VIX — the ticker symbol for the CBOE’s Volatility Index — and commodities.
  • In case you missed it, last Friday the Department of Commerce made public it Section 232 reports and recommendations on steel and aluminum (the reports had already been sent on to the president last month). Lisa Reisman and Irene Martinez Canorea broke down the reports and their implications for aluminum, specifically. Check out the three-part series at the following links: Part 1, Part 2 and Part 3.
  • Lithium is a material that’s both rare and increasingly coveted for applications like electric vehicle batteries. So, is the world doomed to run out of it, or will demand encourage investment in finding new supply? Burns delved into the matter earlier this week.
  • The U.S. International Trade Commission voted last week that imports of carbon and alloy wire rod from South Africa and Ukraine are injurious to the domestic industry.
  • We touched on Section 232 aluminum above — what about steel? Reisman added her thoughts on the steel investigation, ranging from capacity utilization rates to trade remedies to talks of a looming trade war.

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A while back I was called by a journalist at a prominent paper and asked what I thought about the lithium market. Was it another rare earth metals story – limited supply and rapidly escalating demand? Or, worse, was the world simply going to run out of lithium in the face of surging battery demand and, either way, where did I see prices going?

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My position was the world is not short of lithium. It is abundant as an element — it is, or was at the time, just short of scaled-up extraction projects. So no, I did not see the world running out of lithium but that a healthy run-up in prices would encourage more investment and, hence, increased supply – maybe a less dramatic version of the financing that became available for Mountain Pass after the run-up in REM prices.

Interestingly, the journalist did not print any of my comments — fair enough, as they did not support his position that the world is running out of lithium.

Since then, the prices have indeed doubled. The Financial Times reports the price for lithium carbonate from South America has hit $14,500 a ton over the past two years, quoting Benchmark Minerals Intelligence.

Source: Benchmark Minerals Intelligence via the Financial Times

Much of the excitement is due to the rise in electric vehicles (EVs) and hybrids, and although there is no futures market in Lithium – prices are set in long term contracts – buyers have to contend with a bullish supply market as battery makers scramble to cover forward under long term agreements, as the rise in prices affirms.

Indeed, not only product prices but the share prices of producers is set in large part by predictions on the uptake of electric and hybrid cars.

Back to the main thrust of the Financial Times article, Sociedad Química y Minera de Chile (SQM) is up for sale following regulators enforcement of a sale by parent PotashCorp as a prerequisite of aquiring its Canadian rival Agrium. SQM accounts for more than 20% of the world’s lithium supply, making it one of five companies that dominate the global market alongside China’s Ganfeng, Tianqi Lithium, FMC and Albemarle, while its lithium division accounts for 60% of SQM’s profits – arguably a high price regulators are demanding PotashCorp pay to acquire Agrium. But that depends very much on what price the market puts on SQM, which in turn depends on how bullish bidders feel about the prospects for electric and hybrid transport.

PotashCorp could conceivably be getting out at the peak.

According to the Financial Times, quoting consultancy Wood Mackenzie, if electric vehicles reach 5% of car and light truck sales globally by 2025 from their current level of 2%, then lithium prices will fall to $6,900 a metric ton by 2025. However, if that share, including plug-in hybrids, climbs to 12% by 2025, lithium prices will remain at current levels and then move toward a long-term price of $13,600 a ton, the consultancy forecasts. This suggests lithium prices and the share prices of major lithium producers are highly dependent on a very uncertain metric.

Source: Frost & Sullivan via the Financial Times

Uptake of electric cars has consistently underperformed expectations, so exceeding SQM’s current valuation of about $4.7 billion requires a big and bold bet on EVs and hybrids. The Financial Times quotes Ben Isaacson, an analyst at Scotiabank in Toronto, who said SQM’s share price reflects lithium prices well above the marginal costs of production, “which isn’t realistic.” The lithium price will fall to a long-term average of between $8,000 and $10,000 a ton, he forecasts. “This should be bought at a discount (to the current lithium price) — this should not be bought at a premium,” he said.

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With new projects coming onstream in Australia, the U.S. and elsewhere, supply will increase, but so too, of course, will demand. But at current prices, the money is chasing new resource development and EV uptake appears to be lagging.

As one investor is quoted by the Financial Times as saying, “Why would you buy a $5 billion stake in a resource that is geologically abundant?”

Well, my point exactly.

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This morning in metals news, the U.K. is looking to be a low-carbon player in the post-Brexit world, Chinese steel mills get a win and the City of Chicago files a lawsuit against U.S. Steel related to toxic spills into Lake Michigan by the company last year.

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U.K. Devotes Funds for Satellite Research

As the U.K. prepares for the world after Brexit, it is looking to develop its low-carbon industry. One way in which that is being manifested is by a $1 million investment in satellite research to find new deposits of minerals, like lithium (used in lithium-ion batteries), according to Reuters.

According to the report, other entities involved in the project are the British Geological Survey, the Camborne School of Mines and environmental consultancy North Coast Consulting.

Chinese Steel Mills Get a Win in 2018 Pricing

Chinese steel mills got a victory as domestic iron ore price indices will be included in some 2018 annual supply contracts with global miners, according to Reuters.

The move is expected to boost the confidence of Chinese buyers, according to the report.

City of Chicago Files Lawsuit Against U.S. Steel Related to Toxic Spills

On the heels of two toxic spills into Lake Michigan last year, the City of Chicago filed suit against U.S. Steel, the Chicago Sun-Times reported.

“We will not stand idly by as U.S. Steel repeatedly disregards and violates federal laws and puts our greatest natural resource at risk,” Chicago Mayor Rahm Emanuel was quoted as saying in a press release.

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Chicago accused U.S. Steel of violating the Clean Water Act by allowing the discharge of nearly 300 pounds of hexavalent chromium into Lake Michigan last spring and failing to notify downstream users of the impacted waters, according to the Sun-Times.

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While tantalum and lithium aren’t materials we often talk about in this space — even so, founder and Executive Editor Lisa Reisman’s 2011 post on tantalum prices remains one of MetalMiner’s most-viewed posts — they are metals that could see their stock rise in the coming years, according to a recent report.

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According to a report by London-based market research firm Technavio, the global tantalum market is expected to grow by a compound annual growth rate (CAGR) of more than 3% from 2017-2021.

Tantalum was discovered by the Swedish chemist Anders Gustaf Ekeberg in 1802 and named after the Greek mythological figure Tantalus. It is highly resistant to corrosion by acids, boasts a high melting point, and is a good conductor of heat and electricity.

While that’s all very interesting to you, you might be wondering: what is it actually used for?

Applications of Tantalum

According to the research report, tantalum will see its stock rise as a result of global penetration by the smartphone market. Smartphone shipments will increase by 1.3 billion units in the next few years, according to the report, as smartphone technology and internet functionality become more prevalent in developing countries.

Tantalum capacitors are used in automotive electronics, mobile phones and personal computers, according to the U.S. Geologic Survey (USGS).

However, when it comes to the U.S., it has had to get its tantalum from elsewhere.

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Another month has come and gone — now it’s time to take a look back at what’s happened in the world of metals. 

In August, all 10 of our MMIs saw upward movement. That changed the following month, when eight of 10 MMIs fell (albeit several of them fell by small amounts).

For our November MMI (tracking October’s activity), four of the MMIs moved up, five moved down and one held flat (the Automotive MMI).

Hitting some of the high points:

  • It was a big month for stainless steel. The Stainless MMI surged by seven points, hitting 70, up from the October reading of 63.
  • Aluminum also had another strong month, continuing what has been a very strong 2017 for the metal. The Aluminum MMI hit its highest reading, 99, in the history of the MMI series.
  • The doctor was in the house this past month (Dr. Copper, that is). The Copper MMI jumped four points.

You can read about all of the aforementioned — and much more — by downloading the November MMI report below.

The Rare Earths MMI dropped for the second consecutive month, losing a point to hit 21. The November reading of 21 marks the lowest reading since June, when it also hit 21.

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This basket of metals, dominated by China, featured heavier hitters like yttrium and dysprosium oxide posting price increases.

However, europium oxide, terbium oxide and terbium metal all dropped for the month. The biggest drop of the bunch came from neodymium oxide, which fell 14.1%.

Rising Demand

Rare-earth metals are used in a number of high-tech capacities: smartphone, laptops and electric vehicle (EV) batteries, among other things.

Cobalt, which is drawing increasing demand in the EVs sector, is one of those metals. As our Stuart Burns reported earlier today, the metal is heating up.

“Plug-in vehicle sales grew 20 times faster than the overall market, justifiably causing concern that cobalt supply could be strained by this one market application,” Burns wrote. “Worryingly for cobalt, the fastest-growing market is also the largest.

“Driven by government subsidies, the Chinese market, at some 351,000 units last year, also grew at 84% over 2015. The switch to EV and PHEV cars is part of Beijing’s drive against pollution, so incentives are not likely to be relaxed anytime soon. Growth of this magnitude dwarfs the 13% and 36% growth rates in Europe and the U.S., respectively.”

Growth of the U.S. Market

While it is indeed true that China overwhelmingly dominates the global rare-earths market, the U.S. is working to increase its presence in the global market vis-a-vis rare earths.

According to a Wards Auto report, research at Purdue University could boost U.S. extraction of rare-earth elements (REEs) while also recycling the U.S.’s 1.5 billion tons of accumulated coal ash.

“REEs have many important applications in things such as permanent magnets in power generation and electric cars, batteries, petroleum refining catalysts, phosphors in color televisions, and many electronics including cellphones,” said Linda Wang, inventor of the technology and Purdue’s Maxine Spencer Nichols Professor of Chemical Engineering, in a Purdue University release. “The demand for REEs is predicted to grow dramatically over the next several decades. REEs used in the U.S. are primarily imported from China, which controls over 90 percent of the supply, with wide implications on the U.S. economy and national security.”

Wang underscored the importance of developing the domestic market as a means of weathering the volatile rare-earths market.

“For example, after China reduced the export quotas in 2010, the costs of rare earth magnets for one wind turbine increased from $80,000 to $500,000,” she added. “After China relaxed the export restrictions 18 months later, the prices returned to lower levels than in 2010. It’s highly desirable to develop the capacity to produce REEs in the U.S. and to become independent of foreign suppliers.”

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The Rare Earths MMI inched one point higher, reaching 22 points in July. This sub-index increased almost 5% from the previous reading.

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Rare earth prices have continued their uptrend that began in March.

Samarium oxide rose by 8.5%, while terbium oxide increased by 5.9%. Meanwhile, the dysprosium oxide price continued to fall slightly, posting a price drop for the second straight month. 

What’s Going On in the Background?

China currently produces around 85% of rare earth metals. Supply is, therefore, restricted to Chinese production and environmental policies.

With growing demand due to the investment in renewable sectors, such as electric cars and wind turbines, investment in rare-earth metal production remains critical.  

South Africa could play a strategic role in rare-earth metals supply.  The Steenkampskraal mine claims to have the highest grades of rare-earth elements in the world. Moreover, the mine had previously been in operation between 1952-1963, according to its website, and appears to be putting in place all of the equipment and permits needed to bring the mine to production. Rising prices will help. Nevertheless, China remains the global price setter for rare earths. 

In addition to South African rare-earth production, Canada’s Mkango Resources confirmed its  plans to start mining from its Songwe Hill mine in Malawi within three years.

By 2021, the mine will produce about 3,000 tons per year of rare earths. The mine will produce  1,000 tons of praseodymium, neodymium, dysprosium and terbium, according to a recent Reuters article.

The Mountain Pass mine, located in California, is struggling to reopen due to a long-running fight between distressed debt investors. Since Molycorp filed for bankruptcy, due to spending on an experimental ore-processing system, its mine has been caught between the feuding creditors.

The court process remains in its early stages— depending on the outcome, Molycorp could lose its rights to run this mine.

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What This Means for Industrial Buyers

Rare-earth metals seems to show signs of a bullish narrative. However, dysprosium oxide finished June weaker than it finished May, which potentially points to a good opportunity to buy.

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