Articles in Category: Environment

Copper prices rebounded sharply after declines in early May. While prices continue to find a bottom on a macro scale, they remain sideways in the short term. As a result, copper has been unable to establish a clear direction, either bullish or bearish.

The Copper Monthly Metals Index (MMI) fell by 2.89% month over month.

Copper prices fall 4.3% ahead of 0.75% rate hike issued by Fed

The anticipated 0.75% interest rate hike came to fruition on Wednesday. The hike marks the largest since 1994 as the Fed attempts to restrain rising, persistent inflation that hit 8.6% in May. Prior to the latest CPI data, markets expected another half-percentage-point hike followed from previous Fed meetings. In its June 15 press release, the Fed also indicated that it anticipates “ongoing increases in the target range will be appropriate.”

Ahead of its formal announcement, markets expectedly began to price in the Fed’s latest move. Copper prices saw an overall 4.3% sell-off during the week prior. Despite this, copper prices began to form a bottom on short timeframes following the press release. Nonetheless, prices sit substantially beneath their early March peak. The larger trend appears decidedly bearish. 

Ignore the noise. Spot the trend. Related article: The Art of Timing Your Metal Buy 

Indecision, division await vote on Chile’s new constitution

Chile awaits the completion of a new constitution. The constitutional assembly already voted to reject plans to nationalize key parts of its mining sector. However, if adopted, the new constitution will veer the country sharply left as it expands social rights and environmental protections. This will also create a National Health Service, include reparations related to historically Indigenous land and eliminate the Senate from the bicameral congress to create a Chamber of Regions instead.  

Copper

Adobe Stock, 2022

Revisions began on May 14 with the final draft slated for completion on July 4.  The document then enters a referendum. Chilean voters can either approve or reject the new constitution on Sep. 4 as decided by a simple majority.

While the path toward a new constitution began with 80% of the vote in the 2020 plebiscite, approval of the document remains far from certain.  According to a poll by the Center for Public Studies (CEP), respondents that would approve, reject or remain undecided stood at 25%, 27% and 37%, respectively. The remaining 11% either declined to answer or did not know. No clear path exists should voters reject the constitution come September. The poll also indicated should such a scenario play out, 42% of respondents favored a new draft, 31% favored a revision and 15% wanted the current constitution to remain unchanged. Polling reported by the Guardian, however, suggests support for such reform could wane. According to that data, 46% of respondents indicated intent to reject the latest draft while 38% approved.

All copper buying organizations need to closely follow these developments as Chile accounts for over 33% of global copper supply.

The  MetalMiner weekly newsletter covers copper developments.

Impact on copper

While the present draft managed to circumvent radical plans related to copper mining, the sector would see an impact should citizens approve the new constitution. Of note, article 25 requires miners to designate “resources to repair damage” to the environment from the negative effects of mining. The constitution will also include a ban on mining in glaciers and areas essential to protect Chile’s water system. 

According to an interview with Antofagasta CEO Iván Arriagada, most of the company’s current concerns relate to uncertainty of if a shift will occur come September. Depending on the final terms, adoption of the constitution could likely impact long-term investments for the company. Concern over the restriction of private water rights within the new constitution, however, remains largely overstated. The mining industry largely veered toward the use of seawater to operate facilities and will continue to move in that direction. 

The mining sector accounts for roughly 11% of Chile’s GDP. According to Chile’s Centre for Copper and Mining Studies (Cesco), a lack of exploitation of mineral resources would threaten Chile’s overall wealth by 20-25%. Although many of the social reforms remain popular among citizens, threats to mining investment could weigh down the initial widespread calls for reform. Should Chilean citizens approve the new constitution, limits to and additional price pressures on the mining industry would inevitably filter down to global copper prices.

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Actual metals prices and trends

  • The LME three-month copper price fell by 3.18% month-over-month to $9,510 per metric ton as of June 1.
  • Chinese copper bar declined by 4.18% to $10,679 per metric ton. Chinese copper scrap fell by 6.69% to $9,323 per metric ton. 
  • US copper producer grades 110 and 122 decreased by 1.85% to $5.29 per pound. Producer grade 102 fell by 1.78% to $5.51 per pound.

 

In line with India’s commitment at the COP26 summit in Glasgow last year, the country aims to reach net-zero by 2070.

Furthermore, India seeks to meet 50% of its energy needs by 2030 through renewable sources and expand non-fossil fuel power generation capacity to 500 GW in this decade.

In light of these targets, the Government of India (GoI) has approved a multibillion dollar plan of setting up transmission projects for power supply from these renewable energy projects.

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Setting up ‘green energy corridors’

renewables

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India is setting up “green energy corridors” in two phases.

“The Green Energy Corridor Project aims at synchronizing electricity produced from renewable sources, such as solar and wind, with conventional power stations in the grid,” India’s Ministry of New and Renewable Energy says on its website.

One phase will supply 20 gigawatt (GW) of renewable energy to the national grid, the Hindustan Times reported.

Furthermore, the country is in the process of building 63 GW of renewable energy capacity, according to the report. Installed non-fossil fuel power capacity is expected to increase by 66% by 2030.

According to ratings agency ICRA, India’s renewable energy generation capacity will increase by 16 GW in fiscal year 2023.

India aims to cut projected emissions of carbon will by 1 billion tons by 2030.

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The Renewables Monthly Metals Index (MMI) rose by 2.9% for this month’s reading.

January 2022 Renewables MMI chart

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EIA: electricity generation from renewables to rise in 2022, 2023

The Energy Information Administration forecast the U.S. share of electricity generation from renewables will rise in 2022 and 2023.

“Our forecast for the natural gas share as a generation fuel declines primarily as a result of increased generation from new renewable energy generating capacity,” the EIA reported in its Short-Term Energy Outlook released Jan. 6.

The EIA forecast solar capacity growing at a faster rate than wind. Furthermore, the EIA forecast an uptick in hydropower.

“The extreme drought conditions in the West may moderate somewhat in the next year, and we forecast that the share of U.S. generation from hydropower will rise from 6% in 2021 to 7% in 2022 and 2023,” the EIA reported.

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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 aluminum prices, a General Motors collaboration with MP Materials aimed at developed a fully integrated U.S. rare earth magnet supply chain and much more:

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your aluminum buy.

Week of Dec. 6-10 (aluminum prices, rare earth magnet supply chain and more)

aluminum price

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  • Nucor Corporation announced plans to build a rebar micro mill in the South Atlantic region. The company already has rebar micro mills in Missouri and Florida.
  • U.S. automotive sales remain depressed as a result of low inventory.
  • U.S. construction spending through the first 10 months of the year jumped 7.5% year over year, the Census Bureau reported.
  • The U.S. steel capacity utilization rate dipped to 81.9% last week, the American Iron and Steel Institute reported.
  • Aluminum prices trended sideways in November, MetalMiner analyst Nichole Bastin explained.
  • Energy prices are on the rise in Europe, putting the squeeze on both residential and industrial users.
  • Like aluminum prices, copper prices also consolidated in November after an October spike.
  • Bastin checked in on the stainless steel market, including nickel price volatility.
  • General Motors said it will invest $51 million toward equipment for its aluminum die casting foundry in Bedford, Indiana.
  • Stuart Burns also took a look at aluminum prices and China’s impact on the aluminum market.
  • China introduced a draft plan to reduce emissions from metals by 5% by 2025.
  • Lastly, in the rare earths space, General Motors announced a collaboration with MP Materials to develop a fully integrated supply chain for rare earth magnets. MP materials operates the Mountain Pass rare earths mine and processing facility in California.

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Chinese authorities recently presented a draft plan to reduce heavy metal emissions by 5% by 2025.

As noted previously here, the move comes after Beijing moved to stabilize surging coal prices. The government moved to increase both coal imports and domestic output.

The Dalian coking coal price surged to $694 per metric ton in late October. However, the key steelmaking input has plunged by approximately 33% since then. Coking coal this week week fell to $464 per metric ton.

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China’s metals emissions plan

China map

Zerophoto/Adobe Stock

The government posted the plan on the Ministry of Ecology and Environment website, inviting the general people to comment.

The plans includes language indicating it will take efforts to eliminate obsolete and excess capacity in the heavy metals sector, Chinese tabloid the Global Times reported.

China will accelerate the transfer of professional electroplating companies to special industrial parks, the Global Times reported.

China is the world’s biggest emitter of greenhouse gases. Much of China’s emissions come from coal-fired power generation.

In October, as we noted in previous reports and the Monthly Metal Outlook (MMO), Beijing moved to stabilize the coal market amid supply fears. As a result, China increased imports and ramped up domestic output.

Long road ahead on emissions

China’s State Council, however, seems a little skeptical about the new anti-pollution targets.

A report by news agency Reuters recently said in a report that China had a long road ahead on environmental protection.

The Chinese news agency Xinhua reported that according to the State Council, while there had been some improvement in the country’s ecological situation since the launch of its anti-pollution campaign, it would be tough to tackle pollution and ensure that carbon emissions peaked in 2030. Furthermore, China has also pledged to achieve carbon neutrality by 2060.

Data by the Ministry of Ecology and Environment show that China’s emissions of heavy metals in waste water decreased from 167.8 tons in 2016 to 120.7 tons in 2019. That marked a decline of 28%, the Global Times reported.

Some of the heavy metal pollutants on China’s control and prevention list include lead and mercury. Those are largely used by the electroplating industry, the chemical manufacturing industry and the leather tanning business.

Pollution problem

Environment pollution has been troubling China for a long time. A study by a USC-led team in 2020 illustrated the severity of the problem.

The team had found that emissions from coal-fired power plants in China were “fertilizing” the North Pacific Ocean with a metal nutrient important for marine life.

“This work shows fossil fuel burning has a side effect: the release of iron and metals into the atmosphere that carry thousands of miles and deposit in the ocean where they can impact marine ecosystems,” said Seth John, lead author of the study and an assistant professor of Earth sciences at USC Dornsife. “Certain metal deposits could help some marine life thrive while harming other life.”

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This morning in metals news: General Motors announced it had purchased a stake in Pure Watercraft, a firm specializing in “all-electric boating solutions”; aluminum prices ticked up ahead of Thanksgiving; and, lastly, Thyssenkrupp commissioned its 35th EnviNOx® system, which reduces nitrous oxide emissions.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

GM buys stake in electric watercraft firm

General Motors headquarters in Detroit, Michigan

Katherine Welles/Adobe Stock

When it comes to the automotive space and electrification, we typically focus on EVs that operate on land.

However, automaker General Motors recently announced it had purchased a stake in Pure Watercraft, which produces all-electric boating solutions. GM purchased a 25% stake in the Seattle-based firm.

“The collaboration between GM and Pure Watercraft advances a shared vision to promote sustainability through an expansion of zero-emissions mobility for future generations and reflects the holistic approach necessary for widespread EV adoption,” GM said.

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Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner:

Each month, MetalMiner hosts a webinar on a specific metals topic. The next webinar is scheduled for Wednesday, Dec. 8, during which the MetalMiner team will discuss price predictions for 2022. To sign up, visit the MetalMiner Events page.

stainless steel rods

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Week of Nov. 15-19 (stainless steel base prices, infrastructure bill and more)

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Metals will play a significant role in helping governments and companies to address climate issues by aiding the transition to cleaner energy and ultimately decreasing carbon emissions, industry watchers said.

“The metals industry is crucial to facilitating this,” one analyst told MetalMiner.

“If you want energy transition, it is not going to happen without metals and mining,” the analyst added.

His and other analysts’ comments come as the 2021 United Nations Climate Change Conference, also known as COP26 (Conference of the Parties), which took place in Glasgow from Oct. 31-Nov. 13.

Are you under pressure to generate steel cost savings? Make sure you are following these five best practices

Phasing out coal

carbon emissions

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The conference ended with an agreement to work towards limiting an increase in global temperature to 1.5 degrees Celsius. Chief amongst the steps to achieve that is the limiting of coal.

Up to 40 countries had originally planned to “phase out” coal usage in the next 10-20 years. However, the world’s largest users — China, India and the United States — were able to change the wording to “phase down.”

Much depends on China and what it does with coal, however. That includes running power stations and providing feedstock for steelmakers’ coking ovens, the first analyst said.

“I don’t doubt that China will wean itself off of coal,” the first analyst said, “but the reality is that coal will be around in another 30 years.”

Other parts of the climate agreement included 100 countries’ agreement to achieve a 30% cut in methane levels by 2030. Indian Prime Minister Narendra Modi also announced at the conference his country’s plan to achieve net-zero carbon emissions by 2070 as well as to achieve some reduction by 2030.

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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 storylines here on MetalMiner:

MetalMiner has launched a full suite of precious metals as part of the MetalMiner Insights platform. This includes a complete suite of catalytic converter precious metals, which are particularly useful for automotive end-use applications.

Week of Nov. 1-5 (aluminum prices, a Section 232 deal and much more)

aluminum ingot

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  • Stuart Burns touched on the latest supply chain challenge for metals producers: magnesium shortages.
  • The U.S. and E.U. have reached an agreement that will see to an at least partial rollback of Section 232 tariffs in favor of a tariff-rate quota system for both steel and aluminum.
  • Burns delved further into the Section 232 deal, particularly language regarding cooperation on sustainability.
  • After peaking in mid-October, aluminum prices have since plummeted by 20%.
  • U.S. steel capacity utilization fell to 84.3% last week, the American Iron and Steel Institute reported.
  • Sohrab Darabshaw checked in on the COP26 summit in Glasgow, during which Chinese President Xi Jinping called for all countries to take stronger action on climate change.
  • Christopher Rivituso outlined recent Tata Steel developments in the U.K. and the Netherlands.
  • U.S. Steel reported net earnings of $1.54 billion in Q3.
  • Icelandic firm Carbfix is implementing a process that can be used to capture carbon from mining and smelting operations.
  • In the second part of his series on the properties of Bitcoin and gold, Nick Athanis takes a look at Bitcoin with respect to the properties of durability, portability and uniformity.
  • ELYSIS, a joint venture of Alcoa and Rio Tinto, announced progress toward the production of carbon-free aluminum.
  • Nichole Bastin recapped the month that was for the aluminum market in the latest installment of the Aluminum Monthly Metals Index.
  • Oil prices have dipped to their lowest in about four weeks, closing Thursday below $80 per barrel.
  • Circling back to aluminum, Burns analyzed a report indicating Russia could put an end to its aluminum export tax next month.

Are you under pressure to generate steel cost savings? Make sure you are following these five best practices.

This morning in metals news: oil prices fell to their lowest since early October; Anglo American said it aims to achieve carbon-neutral shipping by 2040; and, lastly, stainless steel producer Outokumpu announced its Q3 2021 results.

MetalMiner has launched a full suite of precious metals as part of the MetalMiner Insights platform. This includes a complete suite of catalytic converter precious metals, which are particularly useful for automotive end-use applications.

Oil prices dip to lowest in four weeks

crude oil

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Oil prices fell below the $80 per barrel threshold this week, their lowest since early October.

The WTI crude price closed at $78.81 per barrel, the Energy Information Administration reported. The price dropped by $4.00 per barrel from a week ago.

As readers of the MetalMiner Annual Outlook know, oil price are one of three key factors MetalMiner considers when analyzing commodities markets.

The price drop comes despite yesterday’s news that OPEC+ will stick to its output plan, even in the face of U.S. pressure to pump more oil. (We covered the development in the weekly Commodities Roundup on MetalMiner sister site Spend Matters.)

Meanwhile, U.S. crude inventories for the week ending Oct. 29 increased by 3.3 million barrels from the previous week, according to the EIA’s weekly petroleum status report.

Anglo American aims for carbon-neutral shipping by 2040

Miner Anglo American said it aims to achieve carbon-neutral shipping by 2040.

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