Evolution of electronics to alter metals demand base
The electronics industry has been one of the few bright spots for metals demand this year as the global shift to home working and educating boosted the need for certain products and data transmission. But the coming years could bring significant changes to the profile of this demand base, as evolving technologies alter how various metals are used and bring new entrants into the market.
Growth in the technology hardware space is shifting from personal and consumer products to computing and communication infrastructure, senior consultant at US-based Prismark Partners Renzo DeMeo said this week at the 61st General Assembly for the Tantalum-Niobium International Study Center (TIC). And this shift will bring new requirements and a new base of downstream metal consumers.
Breaking down the tech hardware sector, DeMeo expects the consumer and enterprise devices segment to achieve a compound annual growth rate (CAGR) of 2pc in 2019-24, compared with 3pc for military and aerospace, 4pc for industrial/instrumentation/medical, 6pc for automotive electronics and 7pc for computer and communication infrastructure. Wearable electronics are projected to achieve 15.2pc CAGR over the period.
Breaking the sector down through an alternative lens, the internet of things (IoT) market is set for 13pc CAGR over the five-year period, and the artificial intelligence meets internet of things (AIoT) market is poised for 32pc growth, DeMeo said.
"5G build-out is the enabling factor for everything," DeMeo said, also stressing the critical roles that machine learning and Edge computing will play. The impact of Covid-19 on supply chains has delayed the implementation of 5G but potentially only by a year, European Passive Components Institute (EPCI) president and chief executive Tomas Zednicek said. If anything, the pandemic has underscored the need for technology solutions and connectivity, he said.
"The connectivity piece of the business is really our focus," US-based Kemet Electronics senior vice-president Travis Ashburn said, looking forward amid a year of robust sales. The implementation of 5G will be a "primary demand driver" because it will continue to increase the connectivity in hardware, pushing up demand for key metals including tantalum.
Ashburn also pointed to the likelihood of significant growth within data storage, machine-to-machine connectivity — such as autonomous driving, which will require very high-end computing and low-latency — and connected homes, which will encompass security, white goods and entertainment.
The implications of all this for metals consumption are very diverse and at the forefront of technological research. Overall demand for electronic minor metals is projected to increase in the coming years, but the precise applications and ways in which the metals are used are likely to evolve. The past few years have seen significant investment in the development of new compound semiconductors such as gallium-nitride (GaN), in part because of the new requirements that 5G will entail for chips. Looking at tantalum specifically, DeMeo anticipates that smartphones, personal computers (PCs) and tablets will no longer be key drivers of consumption, but the expansion of global computing and communication infrastructure will require numerous miniaturised devices that benefit from tantalum powder's volumetric efficiency in capacitors.
The metals demand base is also expected to undergo some geographical shifts, with a number of hardware manufacturers — mostly Japanese and American — planning to relocate production sites away from China. Most of these companies are eyeing alternative locations in Asia — such as Vietnam, Taiwan, India and the Philippines — with Mexico also being considered by some US firms.
A wide range of products is caught up in these relocations including PCs, telecoms devices, automotive equipment and cameras. And the shift could result in "separate but parallel supply chains", as "efficiency from scale takes a backseat to risk mitigation, geopolitical rivalry, regional proximity and tariff avoidance", DeMeo said.
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Las Vegas, 18 April (Argus) — The Institute of Scrap Recycling Industries (ISRI) has rebranded to the Recycled Materials Association (ReMA). The new name and rebrand better reflect the evolution within the recycling industry and its member companies, ReMA said at the group's annual convention and exposition in Las Vegas today. Washington, DC-based ReMA represents recycling industries including ferrous and nonferrous metals, electronics, glass, paper, plastics, textiles and tires and rubber. It is a member-driven trade organization that provides advocacy, education, safety and compliance training, and promotes public awareness of the vital role recycled materials play in the US economy, global trade, the environment and sustainable development. ISRI was formed in 1987 when the Institute of Scrap Iron and Steel merged with the National Association of Recycling Industries. Over the last 35 years, the association has seen tremendous growth in size and diversity of its membership, particularly in electronics, consumer brands and EV battery sectors. The trade association has around 1,700 member companies across the US and other 40 countries. By Brad MacAulay Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia provides $256mn to high-purity alumina plant
Australia provides $256mn to high-purity alumina plant
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Q&A: Ramaco adding production, sees market growth
Q&A: Ramaco adding production, sees market growth
New York, 16 April (Argus) — Randall Atkins is a founder and chief executive of metallurgical coal producer Ramaco Resources. He also has been involved in energy-related investment and financing activity for over 40 years. In this Q&A, edited for length and clarity, he discusses effects from the Francis Scott Key bridge collapse, his outlook for coal and the company's research projects. What effect has the Key bridge collapse and Port of Baltimore closing had on Ramaco and the US coal industry in general? Like most things of that tragic nature, it is going to take longer than everyone expects to actually solve the problem. I think where it is going to impact producers probably more is on the rails. There will be a need for...producers to rearrange stockpiles and to rearrange where they are going to try and ship, even at reduced levels. Particularly, CSX is going to have an immense logistical complexity to deal with over the near-term. We do not ship from Baltimore. We have not seen any problems, knock on wood, with our rail shipments post the incident. What are your long-term projections for metallurgical coal given expectations that low-volatile coal reserves will shrink in coming decades and the steel industry could be in oversupply? Low vol coal has traditionally been the highest priced coal and the dearest, if you will. High vol A coal has over the last few years grown in importance, and to the extent that there is any new increase in production in the US, it's high vol. What we perceive is that there is going to be a crowding in the high vol space. As a result, our increase in production is primarily in low vol. As far as the demand side is concerned, we do not believe that blast furnace steel demand is going to decline anytime soon. There's a lot of noise from the green community that hydrogen is going to replace coal in blast furnaces. We took some advice on that from the IEA…and when that question was posed (to IEA), the answer that was given was it would take about $1.5 trillion to build a pilot plant using hydrogen by 2035 and probably about another equal or greater sum to build a commercial facility by 2040. So, I don't lose a lot of sleep on the demand for coal for blast furnaces. What I do see shifting, however, is the US has held relatively steady at about 20mn short tons (18.1mn metric tonnes) of met coal demand over the last 10 to 15 years. The growth is clearly overseas, and the growth is clearly at the moment in Asia. When we started back in 2017, and 2018 was really our first year of production, we predominantly sold coal domestically; I think 80pc of our coal went to US steel mills. Now that is almost reversed. We're going to sell probably this year, 70pc overseas, and about a third or less domestically. With Europe moving towards electric arc furnace technology and significant new blast furnace capacity coming online in Asia, what kind of role will the US play as a coal supplier over the coming years? It is cheaper to use a blast furnace than electric arc. And the steel that they (Asian companies) mostly require is the heavier steel for cars and buildings and things of that nature. So, they have a bias towards blast furnace capacity. The US and Europe are very developed economies that are trying to go and wean away from coal, (while) the rest of the world is aggressively moving further into coal. People will shake their heads at the cost that European and American consumers will start to have to pay for that privilege. We see market growth is still there, but it's a different kind of growth. It will be more in the Asian markets, predominantly some in Europe, some in South America and Africa. The low vol coal demand in Asia is extremely strong because while they are able to buy high vol product from Australia very inexpensively, they do not have the low vol production. They need that to blend up to get the proper mix in their blast furnaces. There is a very good future for low vol, and that is the direction we are positioning ourselves. How confident is Ramaco about securing its investments in the longer run given the emphasis on ESG? What I see is sort of a dichotomy. In the thermal coal business, there's not a lot of investment in new mining there for the obvious reason that their customer base is declining. On the met side, it is a bit shortsighted from an investment standpoint because of the composition of the ownership of met coal companies. Virtually every major metallurgical coal producer except for us went through bankruptcy and post-bankruptcy proceedings. Their board composition became essentially distressed debt investors...Their interest was not developing a long-term coal company. Strategically their vision was: "How can we most quickly get money back out of that coal company?" We are certainly the only coal company that is doubling in size. We produced a little under 4mn st last year. We will be at about 4.5mn st this year. We can maybe go higher, depending upon the market. The market is not strong right now. The other issue (for coal producers) even when they weren't doing special dividends, is they've now shifted to doing large-scale share buybacks. You are starting to see the cost curve increase for most domestic coal producers. What you haven't seen, but I think you will probably find over the next probably 18 to 24 months, is you will begin to see depletion kick in. The amount of coal that they are able to produce from their existing operation will begin to decline. And that is strictly a result of not investing in new mine production. My approach was to kind of be a little bit of an outlier and then approach coal to products as an alternative use, certainly for thermal coal. And that, of course, brought us to rare earth (mineral extraction). Do you have funding for Ramaco's rare earth materials projects? Let me step back one step. We introduced the idea that we actually had rare earth (deposits) in May 2023….When we sent the samples to be tested, they tested them as if they were hard minerals. In other words, they did not combust off the organic material. What we have done since then, is we went back and we had samples that were probably 200-300 parts per million. From a commercial standpoint, we have kind of crossed the Rubicon that this is indeed sufficiently concentrated that it makes commercial sense. Now what we are doing is we are going through a process of further chemical analysis and testing to determine what is the best extraction and refinement technique. And the last point you raised was financing. We have a very nice growing mining metallurgical business, which can provide the funding to do whatever we want to do on rare earth. I am not too concerned about our financing capability. Any updates on your coal-to-carbon product projects ? We have looked at a number of different things with the national labs. We started looking at carbon fiber, which could be made from coal and we have got some patents around some very interesting processes. The areas that we are now focusing on...are using coal to make synthetic graphite. The other thing we are working on is using coal for direct air capture. We are considering going into a pilot phase sometime starting later this year with Oak Ridge National Laboratory on a synthetic graphite plant. 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Liberty Whyalla blast furnace down after maintenance
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