Ellie Saklatvala, Senior Editor — Nonferrous Metals, provides a bitesize overview of the key price movements that happened in Q1 and how supply and demand fundamentals are shaping up as we move through Q2.
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Japan’s Nittetsu in tie-up to develop Chilean Cu mine
Japan’s Nittetsu in tie-up to develop Chilean Cu mine
Tokyo, 9 October (Argus) — Japanese metal producer Nittetsu Mining has agreed to form a joint venture with Vancouver-based exploration firm Camino Minerals to develop a copper mining project in Chile. This comes as part of Nittetsu's mid-term strategy to achieve 50,000 t/yr of copper production by 2033. The 50:50 joint venture betweenNittetsu and Camino plans to develop the Puquios Copper Project in Chile's central Coquimbo region, the Japanese firm announced on 8 October. The investment amount and production volume of crude ore and copper concentrates were undisclosed. But copper equivalent output could be around 15,000 t/yr, according to the Nittetsu representative who spoke to Argus . The Japanese firm is still in discussions with Camino over potential offtake amount, the representative added. The project will start commercial operations after completing the environmental approval process, which could take another few years, Nittetsu said. "This opportunity aligns with Nittetsu's commitment to expanding our footprint in the copper sector by utilising our extensive operational experience and technical expertise", said Nittetsu's general manager Shinichiro Mita. The Japanese firm has separately been developing the Arqueros copper project in Chile since April 2023, with funding by state-backed Japan Bank for International Cooperation (Jbic). The company aims to start producing 15,000 t/yr sometime during April 2026 and March 2027, which is similar to the output volume expected at Puquios project. Japan's government strongly encourages domestic firms to secure copper supply sources. The country's strategic energy plan was revised in 2021, with an aim to lift base metal self-sufficiency to 80pc by 2030, up by around 30 percentage points from the 2018 level. But the strategy appears to not be on track, the country's ministry of trade and industry Meti said in September, although it did not disclose the current rate. Nittetsu expects copper price is likely to remain bullish in the mid-to long term, given higher copper demand driven by decarbonisation and electrification efforts. But the price could face higher volatility in the short term, the company said in July. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Europe to keep using NPI until CBAM: Anglo American
Europe to keep using NPI until CBAM: Anglo American
London, 4 October (Argus) — Europe's stainless steel producers will continue to import and use nickel pig iron (NPI) until the EU's carbon border adjustment mechanism (CBAM) enters its definitive period in 2026, according to John Eastwood, major nickel mining group Anglo American's head of sales, stainless and specialty steel raw materials. A region-wide scarcity of stainless steel scrap and rising raw material costs drove European mills to pivot to using the cheaper and more carbon-intensive Indonesian NPI this year, with imports equating to 10,000t of nickel metal content in January-July, according to Red Door Research managing director Jim Lennon. A European trading firm told Argus this week that Spanish producer Acerinox, ramping up production after a five-month strike-related outage this year, has also committed to using NPI as input feedstock. Speaking on the sidelines of the Nickel Institute Seminar during LME Week on 2 October, Eastwood said this trend will not die down in the near term despite recent falls in scrap prices, with only CBAM — the EU's tax measure to limit carbon leakage within the region and support its long-term climate goals — being a likely deterrent. Currently in its trial phase before full planned implementation in 2026, CBAM requires European importers to offset the CO2 emissions linked with the production of the goods purchased overseas by buying emissions certificates. Scrap suppliers in Europe are waiting as they realise they cannot compete with NPI, with the downside to prices likely to be limited as a result, Eastwood said. The Argus assessment for stainless steel scrap 304 (18-8) solids cif Rotterdam has fallen by nearly 20pc since 22 August and was last at an average €1,175/t. The European stainless steel industry is facing a severe downturn with real demand set to shrink for a third straight year in 2025. Flat producers in particular are operating at well below capacity amid low downstream service centre demand, and Eastwood foresees no change to fundamentals until the second half of 2025. "The problem is not profitability, the problem is there is excess capacity," Eastwood said. "We had Acerinox out of the market for months this year, but it made little difference to the market and prices. Despite a shortage of scrap, there was no impact on our ferro-nickel sales, which tells you how weak the market is." Eastwood believes the second half of 2025 is when demand might recover as the effect of improving macros and easing monetary policy will start to kick in. CBAM has come under intense criticism from European stainless steel producers given that it does not include scope 3 emissions while imposing taxes on selected upstream raw materials, with many producers simply viewing it as a protectionist measure that is fast-tracking de-industrialisation. Eastwood echoed this sentiment and stressed on reform, but said the industry had now accepted that it was here to stay. "There are many holes [in CBAM]. It includes ferro-nickel but leaves out refined nickel, for example," he said. "It is not uniform for the whole supply chain. Average CBAM costs are about $1,000/t of nickel. It is not clear who will pay this." Anglo American's projections peg the class 1 nickel market as the sole provider of market surpluses in the coming years, with the Asian class 2 market, including NPI and ferro-nickel, balanced and even tight, Eastwood said. Nickel prices on the LME are expected to move similarly in 2025 relative to this year. "The wider surplus story is here to stay," Eastwood said. "The story about nickel rocketing up is over. We do not expect much change." Eastwood noted freight costs as a significant limiting factor for the stainless steel industry next year, curbing imports of finished stainless steel into Europe. "Freight prices have been astronomical, and we expect it to remain the same next year," he said. "These costs will weigh heavily on trading, whether imports or otherwise." By Raghav Jain Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia’s Ni expansion via HPAL could face challenges
Indonesia’s Ni expansion via HPAL could face challenges
Singapore, 3 October (Argus) — Indonesia is expected to continue expanding its nickel production in the coming years, especially through increasing its high-pressure acid-leaching (HPAL) capacity, but the lack of readily available sulphuric acid and proper management of the tailings waste could pose challenges to this plan. Production is expected to rise despite an anticipated surplus in the supply of nickel in the market. Sulphuric acid is used in the HPAL process to separate nickel and cobalt from nickel ore to produce mixed hydroxide precipitate (MHP), which is the feedstock for the downstream processing of nickel sulphate, cathode and battery. Indonesia is expected to produce 325,000-345,000t of MHP this year, up from around 269,000t of in 2023, according to market sources. But with several MHP projects planned to come online in the next few years, MHP output for the next three years is projected to treble to 800,000-900,000t, according to the country's deputy minister for the co-ordinating ministry for maritime and investment affairs Septian Hario Seto on 2 October at a metal event in London. As this would require a lot more nickel ore and sulphuric acid, there are concerns that the availability of limonite ore could deplete as fast as the saprolite ore supply, which is mainly used for nickel pig iron and matte production. There were also discussions that the Indonesian government will convene with nickel market participants to discuss about the supply situation of limonite ore. There are currently four HPAL facilities operating in Indonesia. This includes Huayou's Huayue and Huafei projects , GEM's QMB project and Lygend's HPAL project. Others were also concerned that the availability of sulphuric acid could be a limiting factor to Indonesia's rapid expansion of HPAL production, as sulphuric acid demand from Indonesian HPAL projects is expected to reach 7.12mn t in 2025, almost 40pc increase from this year's demand at 5.17mn t, according to Argus estimates. Indonesia has been importing sulphuric acid from mainly China and South Korea to meet the growing demand for its production units at Obi Island and Sulawesi. But a ramp-up in sulphur-burning operations has pushed several MHP producers like Halmahera Persada Lygend to switch to buying lower-cost sulphur instead. For most sulphur burners, 1t of sulphur produces around 3t of sulphuric acid. The startup of Freeport McMoran's Manyar smelter in Java integrated industrial and port estate in East Java's Gresik, coupled with mining firm Amman Mineral Nusa Tenggara's (AMNT) copper smelter in the West Sumbawa regency of Nusa Tenggara province, is also expected to alleviate some supply concerns, with the two expected to add at least 3mn t/yr of acid capacity by the end of 2025. Proper disposal of tailings waste could pose another challenge to Indonesia's planned HPAL expansion, particularly with increasing scrutiny on the environmental, social and governance (ESG) standards by Indonesia's mining industry. The HPAL process generates a large volume of tailings, with energy consultancy Wood Mackenzie estimating an output of 1.4-1.6t of waste from every 1t of nickel produced through HPAL. There are three common ways to dispose tailings waste – tailings dam, deep sea tailings and dry stacking. Dry stacking is more widely used because it is considered as the more sustainable option. But dry stacking also comes with its own environmental and biodiversity risks, as Indonesia's seasonal wet weather and seismic activity of the site could be a problem for waste storage. To ensure a smooth expansion in HPAL production, it is crucial for Indonesia to find ways to secure the necessary sulphuric acid supplies and to adopt appropriate methods for tailings waste disposal. By Sheih Li Wong and Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Aurubis keeps European Cu premium at $228/t
Aurubis keeps European Cu premium at $228/t
London, 2 October (Argus) — Europe's largest copper producer and recycler, Aurubis, will maintain a premium of $228/t to the official London Metal Exchange (LME) copper price for 2025, unchanged for a third consecutive year, the company told customers last week. The annual premium for Europe, which is set on an fca basis, was lifted by 85pc from the 2022 premium to $228/t for 2023, owing to increased production costs primarily linked to higher energy prices, and high freight charges aligned with tight supply and steady demand. This dynamic has remained in place in Europe's copper market over the past two years, and has also been reflected in extremely stable spot market pricing for premiums during this time. Argus assessed the spot premium for grade A copper cathode delivered to Germany at $180-200/t on 1 October, virtually unchanged from a year ago. South American copper producers have not yet settled a separate 2025 premium with European customers, but it could come in below the Aurubis figure, market participants said. Subdued European demand for copper prevented any uplift in the Aurubis annual premium. Consumers maintain a bearish outlook for next year because of sluggish activity in downstream sectors, with the construction sector being particularly quiet. Three-month copper prices on the LME climbed to $10,024/t in today's official session, surpassing $10,000/t for the first time since June. The rise follows optimism in the market because of China's announcement of new economic stimulus measures last week, supported by an increase in oil prices following Iran's missile attack on Israel yesterday. By Roxana Lazar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
