Renewables/GOES MMI: China’s Huayou Cobalt pauses purchases from two Congo mines

The Renewables Monthly Metals Index (MMI) held flat for this month’s MMI value. (Editor’s Note: This report also includes coverage of grain-oriented electrical steel.)

Want more metals analysis in your inbox? Sign up today for Gunpowder, MetalMiner’s free, biweekly e-newsletter featuring news, analysis and more.

Chinese firm to pause purchasing from two Congo artisanal mines

Chinese firm Huayou Cobalt will temporarily cease buying from two artisanal mines in the Democratic Republic of the Congo (DRC), Reuters reported. The Chinese company has opted to pause purchases from the mines until it is sure the cobalt mined there is free from human rights abuses.
A majority of the world’s cobalt is mined in the DRC. Manufacturers covet cobalt for its use in a variety of high-tech capacities, including lithium-ion batteries.
According to the report, Huayou will continue to cooperate with the Better Mining program developed by RSG Group. The initiative aims to facilitate “active and permanent monitoring of artisanal mine sites (ASM) and trading chains in all minerals for adherence to responsible sourcing market expectations.”

Glencore H1 2020 cobalt production down 33%

Miner Glencore reported its first-half production results, detailing a 33% decline in cobalt production.
Glencore reported first-half cobalt production of 14.3 kt, compared with 21.3 kt in H1 2019.
The firm reported a net loss of $2.6 billion in H1 2020, prompting it to do away with shareholder dividends this year.
“Every aspect of life in 2020 has been impacted by the Covid-19 crisis,” CEO Ivan Glasenberg said. “Our teams have adapted to these difficult conditions and we are pleased to announce an overall strong financial performance from our various businesses, reflecting the countercyclical earnings power from our large scale Marketing activities, combined with a cash generative industrial asset base, which quickly adapted to the changed environment.”

GOES MMI falls 7.6%

The index for grain-oriented electrical steel, the GOES MMI, dropped 7.6% for this month’s reading.

The GOES price, meanwhile, fell 7.5% to $2,165/mt.

Tariff concerns

Meanwhile, President Donald Trump reignited some trade tensions between the U.S. and Canada with his recent decision to reimpose the 10% Section 232 aluminum tariff on some Canadian aluminum.
However, other manufacturers are keeping close tabs on other potential tariffs.
In May, the U.S. Department of Commerce launched a Section 232 investigation covering imports of laminations and wound cores. Manufacturers use those imports in transformers, electrical transformers and transformer regulators. 
As the St. Louis Post-Dispatch reported, with the Department of Commerce set to make a decision in the case early next year, some firms, like WEG Transformers, are concerned.
Furthermore, those concerns are magnified in the electrical steel sector. Why? AK Steel remains the U.S.’s lone producer of grain-oriented electrical steel.

“First, WEG sees the actions by AK Steel as an opportunity to use the umbrella of ‘U.S. National Security’ to improve their own business,” James wrote. “AK Steel has a significant market share in the U.S., 70%+ in our estimation of GOES. By imposing tariffs on GOES and finished goods transformers, AK Steel is trying to push their market share to 90%+ in WEG’s opinion and drive their own financial performance.”