Industry News

Investing $2 trillion over the next decade in sustainable infrastructure can greatly reduce Southeast Asia’s greenhouse gas emissions, according to a new report from Bain & Company, Microsoft and Singapore’s Temasek Holdings.

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Southeast Asia infrastructure needs

Southeast Asia map

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The report, titled “Southeast Asia’s Green Economy: Opportunities on the Road to Net Zero,” emphasized investments in areas such as renewable energy, electric vehicles, and waste management.

According to the report, green investments totaled only U.S. $9 billion last year. The report’s authors said Southeast Asia’s corporate, public, and philanthropic sectors must work together to attain the $2 trillion investment figure, the report noted.

Southeast Asia is highly vulnerable to climate change, as it suffers from disproportionately large numbers of climate disasters.

Road to net-zero

Though fighting COVID-19 currently remains a high priority for most governments, a lot of attention in Southeast Asia last year went to climate actions and thinking about what entails a green economy, according to Dale Hardcastle, co-director of Bain’s global sustainability innovation center.

The report found that about 90% of Southeast Asia’s carbon emissions can be addressed by transitioning away from fossil fuels to cleaner energy sources like wind and solar, valuing nature and making the region’s agricultural production of food more efficient.

“While we are seeing many encouraging changes in Southeast Asia’s Green Economy and the overall trend is positive, there is still much more to be done,” said Dale Hardcastle, a partner in Bain & Company’s Singapore office and co-director of the firm’s Global Sustainability Innovation Center (GSIC). “Southeast Asia presents specific conditions which provide both challenges and opportunities for a full-scale sustainability transformation. The region needs to act now and take three steps to translate these opportunities into tangible results: define its road to Net Zero, catalyze the journey and outcomes together, and unlock capital flows.”

Achieving net-zero as a region demands individual action by businesses, investors, governments, and communities, as well as collective action at an ecosystem level.

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This morning in metals news: Cleveland-Cliffs and workers at its Rockport Works have agreed on a new three-year labor deal; the U.S. goods and services deficit increased in August; and, lastly, Rio Tinto reached a new collective labor agreement with workers at its BC Works.

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Cleveland-Cliffs, Rockport workers reach three-year labor deal

Cleveland-Cliffs logo

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Cleveland-Cliffs and the United Auto Workers union, which represents workers at the Rockport Works operation in Indiana, agreed to a new three-year labor deal.

The new contract went into effect Oct. 1, 2021. Furthermore, the new deal includes 350 workers at the Rockport facility.

According to information on the company’s website, the facility has an 80-inch wide galvanizing line, which it says is the widest in the U.S.

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This morning in metals news: new orders for manufactured goods ticked up by 1.2% in August; meanwhile, Nucor affiliates announced two acquisitions; and, lastly, the WTI crude oil price inched upward last week.

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New orders for manufactured goods rise

automotive production

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New orders for manufactured goods rose by 1.2% in August, the Census Bureau reported today.

New orders for the month reached $515.7 billion. The August jump marked the 15th monthly increase in the last 16 months.

Meanwhile, new orders for manufactured durable goods increased by 1.8% in August.

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Much is being made of Beijing’s efforts to meet its environmental emissions targets — the country states it will hit peak emissions before 2030 and carbon neutrality by 2060 — and its restricted steel and aluminium production.

But a recent Reuters post by John Kemp suggests output is being impacted more by a widening electricity crisis than by enforced shutdowns to meet environmental goals.

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China’s energy crisis

coal barge in China

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Kemp explains that China is in the grip of a severe shortage of both coal and electricity. Coal output has not kept up with rising electricity demands from a rapidly recovering economy.

China’s electricity generation increased by 616 Terawatt-hours (13%) in the first eight months of 2021 compared with the same period last year. The largest rises came from the service sector and primary industries.

However, most of the increase has been supplied by thermal generators, principally coal-fired power stations, Kemp explains. Those generators increased output by 465 TWh (14%) in the first eight months.

Other power sources, such as hydro-electric output, have actually fallen slightly this year due to water shortages. Unfortunately, nuclear in China is a tiny fraction of power generation, dwarfed even by renewables like wind and solar.

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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:

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Week of Sept. 27-Oct. 1

steel shipment

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More MetalMiner is available on LinkedIn.

copper stored in warehouse

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This morning in metals news: Events in China are affecting the copper market; the London Metals Exchange may get a new member to its ring, the influential trading group that may be facing more changes itself; and look for our MMO today.

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

London copper price falls on China worries

London copper prices are being buffeted by widespread power restrictions in China and a looming debt crisis by Chinese property giant Evergrande Group, Reuters reports, seeing a weekly price decline for three-month copper of 3.7% as investors reduced risk exposure.

“China’s power shortage has prompted analysts to cut growth outlook in the world’s biggest metals consumer, and its factory activity unexpectedly shrank in September, partially due to the curbs,” Reuters said.

Chinese markets were closed Friday for a weeklong public holiday.

Changes for LME ring

For the first time in 14 years, a new firm will join the London Metal Exchange’s trading ring, a source tells Reuters. Sigma Broking Ltd, which trades equity, fixed income and commodities, did not comment. And other developments indicate that the ring — eight other banks and brokers that trade in the ring or open outcry — may be losing its influence anyway.

Monthly Metal Outlook comes out today

MetalMiner’s October edition of the Monthly Metal Outlook (MMO) comes out today. Subscribers get it in their inbox on the first of every month. Get a sample report here. The MMO includes:

  • Current prices and forecast price ranges for aluminum, nickel, copper, lead, zinc, tin, HRC, CRC, HDG and steel plate
  • Independent trend analysis (price drivers, macro and microeconomic influences and more)
  • Metal-specific buying strategies
  • Ongoing price alerts if markets change quickly

Each month, MetalMiner hosts a webinar on a specific metals topic. On Oct. 28, the topic is “How Artificial Intelligence and Technical Analysis Provide Actionable Metals Buying Insights.” Sign up on the MetalMiner Events page.

Just as global steel producers have slowed in the past few months, global aluminum production has also dropped and aluminum prices recently touched a 13-year high.

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Global aluminum production drops

aluminum ingot stacked for export

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Amid surging aluminum prices, global aluminum production dropped in August, the International Aluminum Institute reported this month.

Global production totaled an estimated 5.70 million metric tons, down from 5.73 million metric tons the previous month.

However, output increased from the estimated 5.52 million metric tons in August 2020.

China, the top producer of aluminum in the world, churned out an estimated 3.30 million metric tons in August. That marked a decline from 3.33 million metric tons.

Meanwhile, production within the Gulf Cooperation Council rose from 496,000 metric tons to 504,000 metric tons in August.

Asian production ex-China held flat at 384,000 metric tons.

North American production fell 5.4% from 333,000 metric tons to 315,000 metric tons.

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The Department of Commerce has initiated a Section 232 investigation covering neodymium-iron-boron magnets, the department announced Sept. 24.

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Section 232 investigation to cover neodymium magnets

neodymium magnet

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The Trump administration used Section 232 of the Trade Expansion Act of 1962 to investigate whether steel and aluminum imports are having a harmful impact on national security. Ultimately, as metals buyers know, the former president opted to slap tariffs on steel and aluminum of 25% and 10%, respectively.

Meanwhile, neodymium magnets go into a wide variety of applications, including wind turbines, electric vehicles and cordless tools, among many others. In addition, as the DOC noted, neodymium magnets also have military applications in fighter aircraft and missile guidance systems.

“The Department of Commerce is committed to securing our supply chains to protect our national security, economic security, and technological leadership,” Secretary of Commerce Gina Raimondo said. “Consistent with President Biden’s directive to strengthen our supply chains and encourage investments to shore up our domestic production, the Department initiated a Section 232 investigation on imports of NdFeB permanent magnets to determine whether U.S. reliance on imports for this critical product is a threat to our national security.”

The DOC asked interested parties to submit written comments, data, analyses, or other information to the Bureau of Industry and Security by Nov. 12, 2021.

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This morning in metals news: U.S. steel capacity utilization reached 85.2% for the week ending Sept. 25; meanwhile, most planned U.S. battery storage additions in the next few years will be paired with solar; and, lastly, unemployment rates in August declined in nearly all metropolitan areas.

Steel prices have been rising for over a year, leaving many to wonder: when will they peak and start to come back down? In the next installment of the MetalMiner webinar series at 11:30 a.m. CDT, Thursday, Sept. 30, MetalMiner experts will overview the steel market and delve into contracting mechanisms, buying guidance and more. Visit the MetalMiner Events page for more information and to register to attend. 

Steel capacity utilization rises to 85.2%

hot rolled steel

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U.S. steel capacity utilization rose to 85.2% for the week ending Sept. 25, the American Iron and Steel Institute reported.

The rate increased from 84.9% the previous week.

Meanwhile, steel production for the week reached 1.88 million net tons, up 0.3% from the previous week. For the year to date, steel output reached 69.54 million net tons at a capacity utilization rate of 81.0%. The total marked an increase of 20.2% year over year.

Battery storage additions to be paired with solar

Battery storage additions in the U.S. over the next three years will mostly be paired with solar, the Energy Information Administration reported.

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Europe’s drive to reduce carbon emissions is taking many forms, from government support for R&D to investment in electric vehicle (EV) charging structures, hydrogen fuel technology and infrastructure, to name just a few.

So much for the carrots.

On the stick side, the E.U. has a carbon emissions trading scheme that grants credits to major emitters. However, it still raises the cost of electricity for both industrial and residential consumers.

Rising steel prices have sounded like a broken record. As we get closer to 2022, will we ever see them peak? Sign up for the next installment in the MetalMiner webinar series on Thursday, Sept. 30. MetalMiner experts will discuss the steel market outlook, contracting mechanisms, buying guidance and more. 

Polish copper producer looks to nuclear power

3D rendering of nuclear power plants in Poland

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For those countries most reliant on coal-fired power production, the problem is most acute.

Poland, with 70% of its power generation dependant on coal, is one of the hardest hit.

It’s not surprising, then, that major consumers are looking to diversify their power sources.  However, rather than the obvious choice of natural gas — or renewables like wind and solar — Poland’s second-largest power consumer, copper producer KGHM, is turning to nuclear.

In an interview with the Financial Times, the firm outlined plans to partner with NuScale Power of the U.S. to develop an initial four small modular nuclear reactors (SMR). Each would be capable of producing 77 MW of power and would be operational from 2029.

In total, the project could entail up to 12 SMRs with a total installed capacity of 1 GW. The intention is to make the firm completely grid-independent and guarantee stable, low-cost power in the long term.

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