When traditional power generation companies start talking retail solar power, it’s time to sit up and take note.
The Renewables Monthly Metals Index (MMI) dropped one point for a March MMI reading of 97. (Editor’s Note: This report also includes coverage of grain-oriented electrical steel.)
The Global Precious Monthly Metals Index (MMI), which tracks a basket of precious metals, rose four points this month for an MMI reading of 129.
The electric vehicle (EV) market is facing significant headwinds.
On the one hand, consumer anxiety over EVs’ limited range and extended recharge periods is making the majority reluctant to commit.
This morning in metals news, 2019 proved to be a down year for Ford Motor Company’s sales in China, Norsk Hydro plans to ramp up production of recycled aluminum this year and Rio Tinto awarded an A$400 million contract for the design of a new mine in Australia’s Pilbara.
Ford sales drop in China
Ford saw its sales in the Chinese market drop 26.1% in 2019 compared with the previous year, according to the company’s most recent sales results release.
Ford sold 567,854 vehicles in China last year.
The Automotive Monthly Metals Index (MMI) held flat this month, posting a reading of 86 for the December MMI.
U.S. auto sales
As noted previously, General Motors, Ford and Fiat Chrysler all report sales on a quarterly basis.
As for the monthly reporters, Honda’s U.S. sales surged 11.1% on a year-over-year basis, with Honda brand truck sales surging 21.3%.
“With one month to go in 2019, robust sales of light trucks are leading the Honda and Acura brands to a strong finish, with record November auto sales for American Honda,” said Henio Arcangeli Jr., senior vice president of Automobile Sales at American Honda Motor Co. “Based on the strength of our products and disciplined approach to sales, American Honda is bucking industry trends, with record sales in three of the last four months.”
Toyota Motor North America also posted a strong November in the U.S. market. Toyota’s sales increased 9.2% year over year on a volume basis and 5.0% on a daily selling rate basis.
Nissan sales, however, were down 15.9% year over year.
Hyundai reported November sales increased 6% year over year.
A forecast released jointly by LMC Automotive and J.D. Power indicated November new-vehicle retail sales would be up from a year ago, increasing 1.2% on a selling day adjusted basis.
“The industry is expected to show growth in November with the benefit of an additional weekend, but the gains are being accompanied by rising incentives,” said Thomas King, senior vice president of J.D. Power’s data and analytics division. “Strong promotional activity over the holiday weekend is expected to drive spending to the highest level ever.”
GM-Isuzu JV to develop new diesel engine plant
As we noted last week, DMAX — a joint venture of General Motors and Isuzu — plans to invest toward construction of a new diesel engine plant in Ohio.
“Due to the growing strength of GM’s all-new 2020 Chevrolet Silverado and GMC Sierra heavy-duty pickups, General Motors and Isuzu announced today a $175 million investment through its DMAX joint venture to build an all-new, diesel engine components plant in Brookville, Ohio,” General Motors said. “The new 251,000 square-foot facility would expand the production of critical engine components for the company’s current DMAX diesel engine manufacturing operation in Moraine, Ohio.”
According to GM, the JV will invest approximately $175 million toward the new plant.
Ford’s Mach-E, Tesla’s Cybertruck join the fray
In product developments, both Ford and Tesla recently unveiled additions to their electric lineups.
At the recent L.A. Auto Show, Ford showcased its Mach-E Mustang, the first addition to its Mustang lineup in over half a century.
The automaker touted the all-electric SUV’s aesthetics and power, which will be available in standard- and extended-range battery options.
Meanwhile, Tesla unveiled its new Cybertruck, which features a stainless steel body. The base single-motor, rear-wheel drive model will come in at a price tag of $39,000, according to the automaker.
Actual metal prices and trends
U.S. HDG rose 6.8% month over month to $797/st as of Dec. 1.
LME three-month copper rose 0.5% to $5,877/mt. U.S. shredded scrap steel rose 4.4% to $235/st.
The Korean 5052 coil premium fell 3.1% to $3.11/kg.
For the first time in over half a century, Ford’s Mustang lineup is getting an addition.
The electric vehicle revolution continues to build as legacy automakers are making their moves.
At the L.A. Auto Show, Ford unveiled its new all-electric 2021 Mustang Mach-E to its lineup, waxing poetic in noting the vehicle embodies the “Mustang spirit” with its “sleek silhouette and muscular curves.”
“At the first-ever Detroit auto show, Henry Ford said he was working on something that would strike like forked lightning,” Executive Chairman Bill Ford said. “That was the Model T. Today, the Ford Motor Company is proud to unveil a car that strikes like forked lightning all over again. The all-new, all-electric Mustang Mach-E. It’s fast. It’s fun. It’s freedom. For a new generation of Mustang owners.”
According to Ford, the new SUV model will be available with standard- and extended-range battery options, with either rear-wheel or all-wheel drive options.
Ford says the Mach-E has an EPA-estimated range of over 300 miles, based on a full charge (final range estimates will be available in 2020, the automaker noted).
“In extended-range all-wheel-drive configurations, Mach-E is targeting 332 horsepower and 417 lb.-ft. of torque – with the standard all-wheel-drive variation targeting quicker times to 60 mph than the base Porsche Macan series,” the automaker said.
Ford was quick to tout the vehicle’s aesthetics and drivability — in other words, it’s not just a gas-saver.
“The Mustang Mach-E wholeheartedly rejects the notion that electric vehicles are only good at reducing gas consumption,” said Hau Thai-Tang, Ford’s chief product development and purchasing officer. “People want a car that’s thrilling to drive, that looks gorgeous and that can easily adapt to their lifestyle – and the Mustang Mach-E delivers all of this in unmatched style.”
In October, Ford reported its third-quarter U.S. sales were down 4.9% on a year-over-year basis, while its truck sales increased 8.8%. Ford’s truck and SUV mix accounted for 87% of sales in the quarter, the automaker said, up from 82% in 2018. Meanwhile, Ford’s average transaction price jumped by $2,200 to $37,900.
Ford shares closed up 2.07% on Friday.
Ford’s unveiling of its new Mach-E at the L.A. Auto Show was followed by Tesla’s own announcement of its new “Cybertruck,” which features a stainless steel body.
While some may be skeptical of the hype around electric vehicles and their narrative of rapid ascent toward market domination, competition is certainly picking up in the market. (MetalMiner’s Stuart Burns, however, last month offered somewhat of a counter to the EVs narrative, noting growth in EV sales is being outstripped by those for “fuel-guzzling SUVs.”)
In a report earlier this year, BloombergNEF forecast electric vehicle sales are on track to command 57% of global passenger car sales by 2040.
Of course, there’s a long way to go until 2040, so it remains to be seen if that and other similar forecasts will come true.
With that said, it’s undeniably true that automakers don’t want to be caught without a plan for electrification and options for consumers looking to make the transition away from the traditional internal combustion engine.
Speaking of consumers, EV affordability is another issue entirely — but, of course, for now it’s one step at a time.
This morning in metals news, automaker Tesla this week showed its new Cybertruck, Chinese President Xi Jinping said he wants to reach an initial trade deal with the U.S. and the CEO of Ace Hardware said the Trump administration’s tariffs are “manageable.”
Tesla unveils stainless steel body Cybertruck
To much fanfare, Elon Musk and Tesla unveiled a new Tesla truck, dubbed the “Cybertruck,” at the L.A. Auto Show this week.
A single-motor, rear-wheel drive Cybertruck will come with a price tag of $39,900. Meanwhile, a dual-motor all-wheel drive truck checks in at $49,900; the tri-motor all-wheel drive model checks in at $69,900.
According to the Tesla website, production on the vehicles is expected to begin in late 2021.
“Cybertruck is designed to have the utility of a truck and the performance of a sports car,” the Tesla website notes. “The vehicle is built to be durable, versatile and capable, with exceptional performance both on-road and off-road.”
The vehicle body is constructed of cold-rolled stainless steel.
“If there was something better, we’d use it,” Tesla says on its Cybertruck specs page.
Xi hopes for deal; ready to ‘fight back’
The world continues to wait for the much-discussed “phase one” trade deal between the U.S. and China.
Reuters reported Chinese President Xi Jinping indicated he wants to reach an initial agreement and avoid a trade war but that he will “fight back” if necessary.
“When necessary we will fight back, but we have been working actively to try not to have a trade war. We did not initiate this trade war and this is not something we want,” Xi was quoted by Reuters as saying during a forum in Beijing.
Ace CEO says U.S. tariffs ‘manageable’
During a CNBC interview this week, Ace Hardware CEO John Venhuizen said the Trump administration’s tariffs are “pesky” and “frustrating” but “manageable.”
According to the CNBC report, Venhuizen earlier this year estimated approximately 12-15% of the hardware company’s business was impacted by the escalating trade conflict between the U.S. and China (which has resulted in hundreds of billions worth of tariffs in both directions).
This morning in metals news, Supply Dynamics took home a national award in the Microelectronics Supply Chain Provenance Challenge, China is investigating steel excess capacity and the Indian Supreme Court has given the green light to ArcelorMittal’s acquisition bid of Essar Steel.
Supply Dynamics Takes Home National Award
Supply Dynamics, along with its U.K. partner Brunel University London, recently took home a national award in the Microelectronics Supply Chain Provenance Challenge, which featured 22 companies and more than 75 applicants.
The challenge, which brought companies to Las Vegas earlier this year to showcase their innovations, was hosted by the Air Force Research Labs (in partnership with AFWERX).
“The winning Supply Dynamics/Brunel solution combined the advanced scanning, X-ray, segmentation, and OCR capabilities of Brunel’s HISTEED and VISION technologies with Supply Dynamics’ web-based, multi-enterprise platform, SDX,” Supply Dynamics said in a release. “SDX is currently used by large manufacturing companies in Aerospace, Automotive, Oil and Gas, and Heavy industry to track, trace, classify, and report common raw materials that flow into their products from thousands of sub-tier suppliers.”
The Challenge solicited applications for “non-destructive methods, techniques, and tools to trace the parts of any COTS assembly (hardware and software) to prove provenance and suitability for use in military applications in a cost-effective manner.”
For more information, visit the Challenge’s website.
China to Probe Steel Capacity
According to a Reuters report, the Chinese government is investigating the country’s steel capacity amid surging output.
Despite capacity cuts in recent years on environmental grounds, China’s steel output has continued to rise. China’s steel production through the first 10 months of the year jumped 7.4% on a year-over-year basis, Reuters reported.
According to the World Steel Association, China’s September production rose 2.2% year over year.
Supreme Court Approves ArcelorMittal’s Essar Resolution Plan
The Indian Supreme Court has approved ArcelorMittal’s resolution plan for the distressed Essar Steel, the former said Monday.
“ArcelorMittal announces that, following receipt and review of the formal written order, ArcelorMittal India Private Limited’s (‘AMIPL’) resolution plan for Essar Steel India Limited (‘ESIL’) has been unconditionally approved by the Indian Supreme Court,” ArcelorMittal said. “Supreme Court approval of AMIPL’s resolution plan is the final procedural step in ESIL’s corporate insolvency process.
“Completion of the transaction is now expected before the end of the year. After completion, ArcelorMittal will jointly own and operate ESIL in partnership with Nippon Steel Corporation (‘Nippon Steel’), Japan’s largest steel producer and the third largest steel producer in the world, in-line with the joint venture formation agreement signed by the two companies.”
Essar Steel is one of a dozen large Indian companies that were thrown into India’s insolvency proceedings in 2017.
Mining companies are not renowned for their cutting-edge use of the latest technologies; I’m not trying to be derogatory, but mining is not the first industry you think of when talking about the digital age.
Their association has been more in the use of their products – copper, rare earths, lithium, etc. are required for these new technological developments.
But an article by Neil Hume in the Financial Times this week reports on the world’s largest copper producer Freeport-McMoRan’s adoption of artificial intelligence (AI) to optimize production at its aging Bagdad Copper mine in Arizona.
As the report states, most of the best copper has been extracted at Bagdad, so miners are having to crush more lower-grade rock just to sustain output.
Apparently, Freeport has developed a process with McKinsey, which uses data from sensors around the mine and suggests new ways to improve the performance of its crushers and processing mills. The system found that the mine was producing seven distinct types of ore and that the processing method, which involves the use of large flotation tanks, could be adjusted to recover more copper by adjusting the PH level, the article states.
Freeport-McMoRan CEO Richard Adkerson is quoted as saying the development has been “a remarkable success.” With very little investment, it has boosted production at Bagdad by 9,000 metric tons of copper this year.
On the basis of this pilot, Freeport-McMoRan is rolling the application out to all its mines in the Americas. The miner has set a goal of increasing production by 90,000 tons, or 5% of its production, by applying this technology.
Putting this in context, the article quotes typical costs to develop 90,000 tons of new copper capacity at about $1.5 billion to $2 billion. Cost include buying new haul trucks, giant shovels and ore crushing equipment; according to the firm, this AI program costs very little.
Where the majors lead, others will follow.
Freeport’s success in using AI to optimize its extraction processes will no doubt be rapidly copied by its peers.