Industry News

Temperance Beer Co. brewery in Evanston

Source: Temperance Beer Co.

A little over a year has come and gone since the COVID-19 pandemic took hold in the US.

In addition to the immense human toll, the pandemic has changed the way many people live their lives. Work situations have changed, as many have switched out commutes to the office for a morning commute to their living rooms or home office spaces.

Furthermore, consumption habits have changed, too.

In the early days of the pandemic, many stocked up on masks, hand sanitizer and toilet paper.

The pandemic also changed consumers’ habits in other areas. One example? Beverages, namely where they are consumed — that is, not in bars — and in what type of container.

Whereas patrons may have consumed draught beer poured from kegs at a bar, many switched to drinking out of aluminum cans at home.

Naturally, this led to a run on aluminum cans and what has seemed to be a continuous can shortage that persists even now, over a year later.

We chatted recently with Josh Gilbert, owner and founder of local brewery Temperance Beer Co., located at 2000 Dempster St. in Evanston, Illinois.

We talked about what the last year has been like for the business, the shift in consumer habits, the resulting shift in the brewery’s procurement and his outlook for the rest of 2021.

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COVID-19 pandemic impact — from keg to aluminum can

For brewers, the COVID-19 pandemic has shaken up their businesses in a number of ways.

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Social network Facebook recently announced an agreement with a Mumbai-based clean energy firm CleanMax for a 32 MW wind power project in India’s southern province of Karnataka.

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Facebook to purchase energy from Indian wind power project

wind power and solar power installations generation

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CleanMax will own and manage the plant. Meanwhile, Facebook will purchase the power produced.

Indian financial paper Mint quoted Urvi Parekh, head of renewable energy at Facebook, as saying the partnership will enable new solar and wind power to be generated in the near future. As such, it would contribute to the decarbonization of the Indian electrical grid.

Incidentally, nearly 50% of the project capacity has already been commissioned and is generating power.

This is not the first such project in Asia involving Facebook.

In October 2020, the social media giant signed a Power Purchase Agreement with a Singaporean energy company, Sunseap Group. The deal would see it utilize solar panels on the rooftops of 1,200 public housing blocks and 49 government buildings.

In turn, Facebook will receive Renewable Energy Credits (REC) produced by the project once it’s done next year. Facebook will buy up to 100 MW of power at a previously agreed upon price.

Last week, Facebook CEO Mark Zuckerberg announced his company’s global operations are now wholly supported by renewable energy and that Facebook had reached net-zero emissions. Furthermore, Facebook said it had reduced its greenhouse gas emissions by 94% over the last three years.

Facebook’s journey started back in 2011 with a wind project in Iowa.

Big Tech going green

Facebook and other data-center-reliant tech companies use up as much as 1% of the world’s total energy, according to the International Energy Agency.

It’s not just Facebook. Big Tech companies like Apple, Microsoft and Google have set net-zero emissions targets for their global operations.

Last July, Apple unveiled a plan to become carbon neutral for its supply chain and products by 2030.

That means even Apple’s manufacturers in India will be moving to 100% renewable energy. In addition, the company’s partners have 8 GW of planned clean energy set to come online by 2030.

Last week, Apple also announced that its US $4.7 billion green bond spend helped generate 1.2 gigawatts of renewable energy. In February 2016 the company issued its first US $1.5 billion Green Bond. It followed it up with another round of $1 billion in June 2017.

In November 2019, the company issued its third set of Green Bonds and its first in Europe. The bonds came in at 1 billion euros each (totaling nearly US $2.2 billion). In fact, Apple’s global corporate operations are already carbon neutral.

“Apple is dedicated to protecting the planet we all share with solutions that are supporting the communities where we work,” said Lisa Jackson, Apple’s vice president of environment, policy and social initiatives. “We all have a responsibility to do everything we can to fight against the impacts of climate change, and our $4.7 billion investment of the proceeds from our Green Bond sales is an important driver in our efforts. Ultimately, clean power is good business.”

While turning green themselves, these companies are also hastening the transformation of entire electricity systems in many parts of the world.

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This morning in metals news: US steel capacity utilization reached 78.0% last week; Rio Tinto released its Q1 production results; and the Pilbara Ports Authority reported March shipping figures.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

US steel capacity utilization up to 78.0%

steel arrow up

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The US steel capacity utilization rate for the week ending April 17 reached 78.0%, the American Iron and Steel Institute (AISI) reported Monday.

US mills produced 1.77 million net tons during the week. Furthermore, the weekly output marked an increase of 0.5% from the previous week. Meanwhile, compared with the same week in 2020, output rose by 42.7%.

Production has reached 26.7 million net tons in the year to date, or up 0.1% from the same period last year.

Rio Tinto releases Q1 production results

Miner Rio Tinto reported Q1 aluminum production of 803,000 metric tons, a 3% year-over-year increase.

Meanwhile, copper production reached 120,500 metric tons, down 9% year over year. The miner cited lower recoveries and throughput at its Escondida and Kennecott mines. Furthermore, Chinese border restrictions have impacted shipments from the Oyu Tolgoi mine in Mongolia, Rio Tinto said.

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Tata Steel Europe (TSE) plans to enact a carbon surcharge on all new flat–rolled product contracts from July 1, a spokesman for the group said.

hot-rolled coil steel

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The planned surcharge scheme stipulates for now a €12 ($14.30) per metric ton of hot and cold rolled coil from TSE’s plants at Port Talbot (Tata Steel UK) and IJmuiden (Tata Steel Netherlands), the spokesman told MetalMiner.

TSE is a wholly owned subsidiary of Mumbai-headquartered Tata Steel, which has operations in various parts of the world.

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Carbon surcharge

Several factors could see the surcharge amount change. Those include the difference between the sales price on the rolled products and the carbon tax, the TSE spokesman added.

Western European mills were offering HRC in late March at €900 ($1,070) per metric ton ex works for October delivery. Meanwhile, they were seeking €980 ($1,170) for CRC.

The planned scheme will also not carry any sort of discount, such as for volumes purchased.

“There is a certain amount of dipping our toe in the water,” the spokesman added. It is not yet clear how the how the market or other producers are likely to react to the carbon surcharges.

Tata Steel Europe’s current deficit on carbon allotments within the European Union and the United Kingdom prompted the group to introduce the carbon surcharge scheme, the spokesman also said.

Policy changes

The European Union’s Emission Trading Scheme Phase 4 took effect Jan. 1. Implementation of that will also see an annual 2.2% drop on carbon emissions allowances until 2030.

Those decreases exceed TSE’s decarbonizing rate, the spokesman noted, thus prompting the group to pass the costs on to buyers.

TSE is aiming to be zero-carbon emissions in Europe by 2050. The group’s more immediate aim is 30-40% cut in carbon emissions by 2030.

The spokesman declined to indicate what TSE’s total carbon emissions volume are at present.

However, they said it now produces 1.98 metric tons of carbon per every metric ton of crude steel produced.

Uncertain futures

TSE’s total crude steel capacity is approximately 11 million metric tons per year. Port Talbot can produce 4 million metric tons of crude, via two blast furnaces and two convertors, which it casts into slab for further rolling.

Ijmuiden, just outside of the Netherlands’s official capital of Amsterdam, has a crude capacity of 7 million metric tons per year. Its production there comes from two blast furnaces and a convertor shop.

The Dutch site can produce HRC in 1-2mm gauges. The plant can also produce CRC, hot-dipped galvanized coil, pre-painted coil and tin sheet.

Despite those plans, the two integrated works’ respective futures are unclear.

TSE split up IJMuiden from Port Talbot in November. At the same time, Sweden’s SSAB announced that it was in preliminary talks with the group over potential acquisition of the Dutch plant.

Those talks with the Indian group ended in February (after having announced them in November). The Swedish firm cited limited potential scope to integrate the Dutch plant into the Swedish group’s strategic framework.

SSAB wants to produce the world’s first fossil-free steel by 2026 and be completely fossil-free by 2045.

Labor unions at Port Talbot have also expressed concerns about that site’s future. Furthermore, Welsh nationalist and social democratic party Plaid Cymru has called on London to nationalize the plant.

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This morning in metals news: Century Aluminum and the United Steelworkers union reached a five-year labor agreement at the Hawesville smelter; meanwhile, Ford reported its Q1 sales results in Europe; and, lastly, miner Anglo American said it will now source 100% renewable energy at its South American operations.

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Century Aluminum reaches labor deal with USW for Hawesville smelter

Aluminum production

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Century Aluminum announced it had reached an agreement with the United Steelworkers union at its Hawesville smelter.

The company said it had reached a five-year deal with United Steelworkers Local 9423.

The new contract will run through April 1, 2026. Furthermore, the company said it will add about 60 news jobs at the smelter.

“These productive negotiations between the two parties is a great example of how we work together with the USW to provide the best opportunities for our employees and to put Hawesville in a position to succeed in a highly competitive aluminum market,” said Gunnar Gudlaugsson, Century’s executive vice president of global operations, and Dayan Neves, Hawesville’s plant manager.

Ford of Europe releases Q1 sales figures

Ford of Europe reported its Q1 sales rose by 7.7% from Q1 2020. Furthermore, March sales surged by 70.6% from March 2020.

The UK, Germany and Italy took the top three spots in Q1 in terms of Ford sales.

Anglo American touts renewable South American operations

Following through on previous commitments, Anglo American said it has made the transition to 100% renewable energy at its South American operations.

“Having already secured renewable energy to meet all its power requirements for its iron ore and nickel operations in Brazil from 2022, and for its copper operations in Chile from 2021, Anglo American has now signed an agreement with Engie Energía Perú to provide 100% renewable energy for the Quellaveco copper operation in Peru that is expected to begin production in 2022,” the miner said in a release.

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This morning in metals news: Alcoa announced its first quarter financial results; US housing starts surged in March; and General Motors and LG Energy Solution are building a second Ultium battery cell manufacturing plant in the US.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Alcoa releases first quarter financial results

earnings sign

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Alcoa released its first quarter financial results Thursday, in which it posted strong numbers boosted by higher aluminum and alumina prices.

The firm reported net income of $175 million in the first quarter of 2021. That compares with income of $80 million in Q1 2020. Meanwhile, Alcoa reported a net loss of $4 million in Q4 2020.

“We had an excellent first quarter with our best quarterly result since a record-setting year in 2018,” Alcoa President and CEO Roy Harvey said. “We excelled from the top line to the bottom line, controlling production costs and capturing the benefits of improved demand and stronger prices for alumina and aluminum.”

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mining

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This morning in metals news: miner Rio Tinto announced it had reached a financing plan with Turquoise Hill Resources for the Oyu Tolgoi copper mine in Mongolia; meanwhile, the United States International Trade Commission (USITC) made a countervailing duty ruling on chassis and subassemblies from China; and, lastly, China’s National Bureau of Statistics released Producer Price Index (PPI) figures for the industrial sector in March.

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Rio Tinto reaches financing deal for Oyu Tolgoi

Miner Rio Tinto announced it had reached a financing deal with Turquoise Hill Resources for the Oyu Tolgoi copper miner project.

The massive underground copper-gold mine project is a partnership between the Mongolian government and Turquoise Hill Resources. Rio Tinto has a majority stake in Turquoise Hill. Meanwhile, the Mongolian government owns 34% of the project, while Turquoise Hill owns the balance.

However, the Mongolian government had earlier this year expressed reservations about the progress of the project.

A few months later, Rio Tinto says it has an updated funding plan for the mine.

The estimated remaining funding needed for the project is approximately $2.3 billion.

USITC rules on chassis, subassemblies from China

The USITC this week ruled imports of chassis and subassemblies from China are being subsidized by the exporter.

As a result, the Department of Commerce will issue a countervailing duty order.

NBS: PPI for manufactured goods up 4.4%

China’s National Bureau of Statistics reported the Produce Price Index (PPI) for manufactured goods rose by 4.4% year over year in March.

The PPI rose 1.6% month over month.

The PPI for non-ferrous metal materials and wires jumped by 17.3%. Meanwhile, the ferrous metal materials index rose by 15.6%.

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hot rolled steel

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This morning in metals news: US steel sector capacity utilization fell to 77.6% last week; US import prices rose in March; and the WTI crude price continues to hang steady.

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US steel sector capacity utilization reaches 77.6%

US steel sector capacity utilization dipped to 77.6% for the week ending April 10, the American Iron and Steel Institute reported.

Capacity utilization fell from 77.9% the previous week.

Production during the week ending April 10 totaled 1.76 million net tons, or up 42% year over year. The total fell by 0.3% from the previous week.

US import prices rise

US import prices rose by 1.2% in March, the Bureau of Labor Statistics reported.

The increase follows jumps of 1.3% in February and 1.4% in January.

Import prices from December to March rose by 4.1%, the largest three-month rise in the index since rising 5.8% in May 2011.

Oil price remains steady

As MetalMiner’s Stuart Burns explained earlier this month, oil prices have settled into a relatively narrow band of late.

The WTI crude oil price closed Tuesday at $60.18 per barrel, according to the Energy Information Administration. The price marked an increase of $0.85 from the previous week.

Meanwhile, the price is up $37.77 per barrel from a year ago.

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lithium-ion battery

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A development at an Indian lithium-ion battery plant could begin to challenge China’s dominance of the graphite anode market.

A lithium-ion battery manufacturing plant in one of India’s southern provinces that came online recently will become the world’s first and only 100% backward-integrated facilities producing synthetic graphite (Syn-G) when fully operational.

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Lithium-ion battery components

Such high-grade graphite anode material is a key component in the lithium-ion battery, something China has monopolized the production of for a long time.

Epsilon Advanced Materials, the company behind the new plant, is a subsidiary of Epsilon Carbon. Epsilon Carbon is India’s leading coal carbon company that recently diversified into the battery material business. Specifically, it has moved to develop and manufacture high-performance carbon products for anode components for lithium-ion batteries. Industries in China currently produce over 80% of the world’s supply of these anodes.

Epsilon Carbon took over two years to develop a new, environmentally friendly process to produce the graphite anode material.

Managing Director Vikram Handa is the son-in-law of none other than steel tycoon and entrepreneur Sajjan Jindal, chairman and managing director of JSW Group of companies diversified in steel, mining, energy, sports, infrastructure and software business.

Handa set up Epsilon Advanced Materials Pvt — India’s first manufacturer of lithium-ion battery parts — in the southern state of Karnataka last August. He is sourcing the raw material from the largest steel mill in the country, owned by Jindal.

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Efforts to reduce Europe’s carbon footprint are many and varied, including in the European aluminum sector.

Energy-intensive industrial processes like steel, aluminium and cement manufacturing make up a significant chunk of carbon emissions. A carbon tax as crafted in the EU’s Carbon Border Adjustment Mechanism (CBAM) is seen as a major plank in shutting out or penalizing producers outside the bloc with high carbon

loadings. In turn, the mechanism thereby supports domestic producers with much lower carbon footprints.

Does your company have an aluminum buying strategy based on current aluminum price trends?

European aluminum sector expresses opposition

An SBGlobal article cites European Aluminium Association data, saying the carbon footprint for primary aluminum production in China is, on average, three times more carbon-intensive than producing the same aluminum in Europe.

E.U. flag

Andrey Kuzmin/Adobe Stack

Yet, due to subsidy and support, China has come to dominate global aluminum production this century. Meanwhile, European aluminum output has declined.

China produced 37.3 million metric tons of primary aluminium last year. That marked 57% of world output of 65.3 million metric tons. Meanwhile, Western Europe produced just 3.3 million metric tons, or 5%, with some 30% of capacity lost since 2008.

Yet, opposition to a CBAM program has come, surprisingly, from the European aluminum industry itself.

European Aluminium, representing some 80% of producers across 30 European nations, with some 600 plants, said it is united in fearing a CBAM may be difficult to calculate. It also argues it could disrupt value chains and encourage carbon leakage by driving downstream producers out of the EU, providing no incentive to their decarbonization.

Crucially, Europe is a net importer of aluminium. The EU imports about 50% of its primary ingot, principally from Norway, Iceland, Russia, the UAE and Mozambique.

The region also imports a very significant percentage of its semi-finished aluminium. Much like the US, domestic production is nowhere near enough to meet domestic demand. Europe’s supply chains are complex and varied, from bauxite through to semi-finished products.

Therein lies the problem.

Unintended consequences

The European Aluminium Association and its members are worried there will be multiple and profound consequences, implications and distortions to the supply chain if certain countries are penalized with a carbon tax.

The industry prefers more targeted action. For example, the EU Commission’s action against Chinese flat rolled product producers for subsidized and unfair pricing has resulted in tariffs added to those imports this week. As we have reported recently, the new tariffs will range between 19.3% and 46.7% and affect commercial flat-rolled aluminium products, depending on the producer, while the probe continues. If upheld as expected, the rates will hold for five years from October 2021.

Industry decarbonization efforts

State or superstate action aside, the industry is making its own decarbonization efforts. Customer and investor sentiment, rather than legislation, are spurring those efforts.

Just this week, En+ Group, owner of Russian giant Rusal, announced in a press release a major breakthrough in refining technology producing 99%+ pure aluminium with industry’s lowest carbon footprint. The company said the metal contained less than 0.01 tons of CO2 equivalent per tonne of metal. It produced the metal using the company’s new-generation inert anode electrolysers, located at the Krasnoyarsk Aluminium Plant.

The statement reiterated En+’s goal of being net-zero by 2050. It also aims to reduce emissions by at least 35% by 2030.

The technology replaces standard carbon anodes with inert, non-consumable materials – ceramics or alloys, which results in a major reduction of emissions from the smelting process. Not only are carbon emissions down by 85%, but the technology reportedly releases oxygen in the process of aluminum production. One inert anode cell can generate the same volume of oxygen as 70 hectares of forest, the group claims.

That being the case, Rusal would probably welcome a CBAM. The firm would have gotten preferred status even before the new technology was proven. With 100% of Rusal’s aluminum now made from hydropower, it already had one of the lowest carbon footprints in the industry.

But the takeaway here is market forces are driving dramatically lower carbon content in European aluminum. Ultimately, that trend may prove a more dynamic influence than industrywide catch-all legislation, like the CBAM.

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