Industry News

emissions

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This morning in metals news: energy-related emissions from the US industrial sector fell by 8% in 2020; meanwhile, Chinese steel production remains strong despite production curbs in Tangshan; and, lastly, GlobalData forecast Chile’s copper production will rise by 3.7% this year.

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US industrial sector energy-related CO2 emissions fell 8% in 2020

Energy-related CO2 emissions in the US fell by 11% in 2020, the Energy Information Administration reported.

Furthermore, energy-related CO2 emissions fell for every end-use sector for the first time since 2012.

In addition, energy-related CO2 emissions from the industrial sector fell by 8%.

Chinese steel production remains strong despite curbs

Despite production cutbacks in China’s steelmaking hub of Tangshan, steel production in the country continues at a robust rate, the South China Morning Post reported.

According to the report, China’s blast furnace capacity utilization rate is at 87% after a slight increase.

GlobalData: Chile copper output to rise 3.7% in 2021

After an up-and-down 2020, Chile’s copper output is likely to pick back up this year.

GlobalData forecast Chile, the world’s top copper producer, will see output rise by 3.7% this year.

“Chile’s copper production is estimated to have declined by 0.7% in 2020,” said Vinneth Bajaj, associate project manager at GlobalData, in a release. “While the country’s mining sector avoided a full-scale lockdown as seen in neighboring Peru, operational restrictions and rising cases impacted the progress of various developments. For example, Codelco had to halt on-site construction activities at Chuquicamata and El Teniente, with rising cases leading to mounting pressure from workers and the temporary shutdown of Chuquicamata at the end of June 2020.”

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China story steel production

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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:

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Week in Review, April 5-9 (steel capacity utilization, European steel’s challenges and more)

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This morning in metals news: the Aluminum Association this week called for reforms to the Section 232 exclusion process; meanwhile, Volvo Cars reported a record first quarter in sales; and, lastly, Chilean miner Codelco requested arbitration with Ecuador regarding the Llurimagua project.

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Aluminum Association calls for Section 232 exclusion reform

Aluminum production

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Just over three years ago, former President Donald Trump used Section 232 of the Trade Expansion Act of 1962 to institute tariffs on imported steel and aluminum.

However, in addition to quotas and waivers for certain countries, domestic consumers could file for tariff exclusions with the Department of Commerce.

Meanwhile, this week, the Aluminum Association called for reforms to the Section 232 exclusion process.

“Three years after the implementation of the Section 232 tariffs on most aluminum imports into the U.S., it is time to take a fresh look at trade policy to support a robust domestic aluminum industry,” said Tom Dobbins, president and CEO of the Aluminum Association. “The Biden administration and the new Congress have an opportunity to harness the growth potential for aluminum as a sustainable solution for the 21st century, and capitalize on the more than $3 billion of private U.S. aluminum investment over the past decade. The federal government can take action immediately to put American aluminum on an equal footing with overseas competitors.”

Volvo touts record first quarter

Volvo Cars reported its best-ever first quarter for global sales.

Volvo’s sales surged by 40.8% year over year.

“In Europe and the US, the company managed to improve sales compared to the first quarter last year, while managing to cope with the ongoing effects of the pandemic,” the automaker said. “China has by now recovered from the impact of the pandemic, which was peaked in Q1 2020.”

Furthermore, Volvo’s March sales jumped by 62.3% year over year.

Chile’s Codelco seeks arbitration with Ecuador over Llurimagua project

Lastly, Chilean copper giant Codelco said it is seeking arbitration at the International Chamber of Commerce with Ecuador.

Codelco said it is seeking compliance regarding agreements signed with the National Mining Company of Ecuador regarding the Llurimagua project. The project sits 80 kilometers from Ecuador’s capital, Quito.

In a release, Codelco said the parties agreed to definitive terms for the partnership in 2019. In addition, Codelco said it hoped the process will make it possible to reach an agreement for the “mutual benefit” of the parties.

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Ford logo

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This morning in metals news: Ford China announced its sales rose by 73.3% year over year; meanwhile, the Energy Information Administration (EIA) released its Short-Term Energy Outlook; and, lastly, Rio Tinto announced it had achieved battery-grade lithium at its Boron plant.

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Ford China tallies fourth consecutive quarterly sales jump

Ford China reported its Q1 sales jumped 73.3% year over year.

The jump marked its fourth consecutive year-over-year quarterly sales increase.

Meanwhile, Ford China sales increased 30.3% year over year in Q4 2020.

EIA releases Short-Term Energy Outlook

The EIA forecast US retail gasoline prices this summer will average $2.78 per gallon.

Meanwhile, last summer’s average checked in at $2.07 per gallon.

“EIA expects U.S. gasoline consumption to rise in response to growing levels of GDP and employment,” the EIA said. “In addition, as COVID-19 vaccines are more widely distributed, we expect that driving will increase, causing gasoline consumption to rise.”

Furthermore, the EIA forecast US gasoline consumption will average 8.6 million barrels per day in 2021, up from 8.0 million barrels per day in 2020.

In addition, in its latest outlook, the EIA used projections of 5.6% GDP growth this year and 4.2% growth in 2022.

Rio Tinto achieves battery-grade lithium

Lastly, Rio Tinto announced it had achieved battery-grade lithium at its Boron plant in California.

“The demonstration plant is the next step in scaling up a breakthrough lithium production process developed at Boron, to recover the critical mineral and extract additional value out of waste piles from over 90 years of mining at the operation.

“An initial small-scale trial in 2019 successfully proved the process of roasting and leaching waste rock to recover high grades of lithium.”

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The Vedanta copper plant in India remains shut three years after local residents protested against pollution stemming from the plant’s operation.

That, however, has not fazed the Vedanta Group.

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Vedanta to set up new copper smelter

Vedanta now plans to set up yet another plant in the country. The proposed copper smelter plant will have a capacity of 500,000 tons per year.

copper smelter

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Vedanta Ltd, the subsidiary of Vedanta Resources, has called for expressions of interest from provincial governments in India regarding a new copper smelter unit.

A Vedanta spokesperson told the Business Standard India’s copper requirements will grow. Furthermore, the spokesperson emphasized ample supply of copper is critical for implementation of new-generation technologies.

Three years later

It’s been about three years since Vedanta’s Tamil Nadu smelter was shut down, causing it losses that are already running into millions of dollars.

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This morning in metals news: the US Court of International Trade issued a Section 232-related ruling; General Motors announced the manufacturing locations of its first-ever Chevrolet Silverado electric pickup and GMC Hummer EV SUV; and, lastly, top copper producer Chile closed borders.

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USCIT rules in favor of plaintiff in Section 232 derivatives case

judge's gavel

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The US Court of International Trade (USCIT) has typically rejected challenges to former President Donald Trump’s Section 232 tariffs.

This week, however, the court ruled in favor of a plaintiff who contested Trump’s expansion of the tariffs to cover steel and aluminum derivatives.

With Proclamation 9980 on Jan. 24, 2020, Trump expanded the Section 232 duties to cover steel and aluminum derivatives.

In this case, PrimeSource Building Products Inc. contested the duties.

“To declare Proclamation 9980 invalid, we must find ‘a clear misconstruction of the governing statute, a significant procedural violation, or action outside delegated authority,'” the USCIT explained. “Because the President issued Proclamation 9980 after the congressionally-delegated authority to adjust imports of the  products addressed in that proclamation had expired, Proclamation 9980 was action outside of delegated authority.”

The USCIT awarded summary judgment to PrimeSource on the second count of its complaint.

“As relief on this claim, we will declare Proclamation 9980 invalid as contrary to law and, on that basis, direct that the entries affected by this litigation be liquidated without the assessment of duties pursuant to Proclamation 9980, with refund of any deposits for such duty liability that may have been collected pursuant to Proclamation 9980,” the court stated in its conclusion.

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copper smelter

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The copper market saw a near doubling in prices over the last year.

Copper fell to an LME low in March 2020 of $4,371 per metric ton. Fast forward to this year, however, and it closed at $8,764 prior to this past weekend.

But anyone following the copper market will know that even that price is off a late February high of over $9,600.

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Copper market ups and downs

So why has the price dropped back so significantly from its high?

Is this just a pause before forging higher, as Citi Bank would have us believe?

In a recent report, Citi said it expects the metal to fetch $10,000 per metric ton “sooner rather than later” on the basis of a tight supply market. Furthermore, Citi forecast a return to over $9,000 over the next three months and to $10,000 between 6-12 months out.

But a Reuters column by Andy Home offers a more cautious analysis. Home suggests the rapid rise last year and into this was the result of an unexpectedly strong rebound in Chinese manufacturing. As a result, that prompted a surge in imports of refined metal.

Strong investor interest and supply chain restocking abetted price rises. Investors bought into the electrification story and demand from strong electric vehicle (EV) sales. They bought into Citi’s supply constraints, with mine supply hampered by ongoing pandemic restrictions and the longer-term narrative of falling grades and lack of new mine investment.

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This morning in metals news: the US steel capacity utilization rate ticked up to 77.9% last week; Novelis announced new sustainability targets; and the United States International Trade Commission (USITC) issued a ruling on seamless carbon and alloy steel standard, line and pressure pipe.

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US steel capacity utilization hits 77.9%

US steel capacity utilization rose to 77.9% for the week ending April 3, the American Iron and Steel Institute (AISI) reported. Steel capacity utilization for the previous week reached 77.6%.

steel arrow up

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Production during the week totaled 1.77 million net tons. The output marked an increase of 15.7% year over year. Furthermore, production increased by 0.3% from the previous week.

Novelis announces new sustainability targets

Aluminum sheet manufacturer Novelis announced new sustainability targets and a pledge to reach net-zero carbon emissions by 2050.

Furthermore, Novelis said it aims to reduce its carbon emissions by 30% by 2026.

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wind and solar electricity generation

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This morning in metals news: US energy consumption fell by 7% in 2020; the United Steelworkers union commented on the details of President Joe Biden’s American Jobs Plan; and the aluminum price retraced last week.

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US energy consumption down 7% in 2020

Amid the impact of the COVID-19 pandemic, US energy consumption fell by 7% in 2020, the Energy Information Administration (EIA) reported.

“Last year marked the largest annual decrease in U.S. energy consumption in both percentage and absolute terms in our consumption data series that dates back to 1949,” the EIA said. “Much of the 2020 decrease in energy use is attributable to economic responses to the COVID-19 pandemic that began in the United States during the spring of 2020.”

USW on American Jobs Plan

As we noted last week, the United Steelworkers union last week announced a strike at nine Allegheny Technologies Inc. facilities. The move could have significant ramifications for stainless steel buyers, should it linger.

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Suez Canal

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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, including the Suez Canal blockage, the April 2021 MMO, Western European hot rolled coil prices and much more:

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Week of March 29-April 2 (Suez Canal retrospective, HRC in Western Europe, April MMO report and more)

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