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Viewpoint: US pig iron demand to rise on EAF growth

  • Spanish Market: Metals
  • 27/12/21

US demand for basic pig iron (BPI) is expected to climb in 2022 as new steelmaking capacity comes on line, but price direction will likely be tied to a finished steel market that cooled to end 2021.

Market participants have recently been split on the possible direction for BPI prices heading into 2022 as raw material costs and finished steel prices ease but outlooks for demand remain firm.

The Argus BPI assessment cfr New Orleans stood at $545-555/metric tonne on 23 December, off by 18pc from record highs set in July and just under levels from a year earlier.

Raw materials

Pig iron prices were supported throughout much of 2021 on higher prices for raw materials and scrap alternatives.

Iron ore, the main raw material cost for pig iron, surged over the middle part of the year amid wider margins and stronger demand in China. The seaborne trade for iron ore hit historic highs in May with prices for 62pc fines cfr Qingdao well above $210/dmt.

At the same time, pig iron's main domestic scrap alternative, #1 busheling, also traded at higher prices throughout the year. Spurred by limited generation and strong mill demand, national #1 busheling prices hit an Argus high of $633/gt ($623/t) in July.

Iron ore and scrap markets have declined in the last months of 2021, mirroring weakness in finished steel prices.

At the end of December, iron ore prices had declined by 47pc from their yearly peak to just under $125/dmt, while #1 busheling was off by 7pc to $588/gt. US hot rolled coil prices fell by 17pc to $1,628/st in nearly the same period.

Growing EAF consumption

The US is on track to add just under 8.2mn short tons/yr (7.4mn t/yr) of new melting capacity in 2022, roughly 7pc more than 2021 total capacity. The bulk of this will come in the form of new and upgraded flat-rolled facilities headlined by 3mn st/yr from Steel Dynamics' Sinton, Texas, operation.

Flat-rolled mills, especially electric arc furnace (EAF) variants, tend to require the greatest share of iron metallics in their melts compared with other types of finished steel. Sources estimate flat-rolled EAFs require roughly 25pc of their melt to be cleaner higher-yielding iron units, such as BPI, at any given time. Based on just the flat-rolled expansions, the US would need to consume an additional 1.75mn st of BPI in 2022 if those operations ran at full capacity.

Options for sourcing iron metallics domestically remain limited. Cleveland-Cliffs has cut its third-party sales of hot briquetted iron (HBI) from its 2mn t/yr Toledo, Ohio, plant since June, instead opting to supply its own operations. Coupled with its acquisition of Ferrous Processing and Trading (FPT) in early October, the steel and iron pellet producer holds a significant portion of #1 busheling and Midwest-based metallics production.

As a result, the expansions are expected to drive imports, already a major source of iron metallics for the majority of US EAF operations. The US is on track to import 6.2mn t of pig iron in 2021, according to Commerce Department data. The additional capacity could grow that figure by 26pc as soon as 2022.

Seaborne trade

Market participants are skeptical that China will resume its significant role in the seaborne trade in 2022. The world's largest steel producer had imported more pig iron than the US in 2020 but had reverted to domestic supply by early 2021 as higher seaborne prices and looser local blast furnace restrictions weighed.

Brazil did export roughly 141,000t to China in November, the first sizable volumes since February, but market participants expect this trend to be short lived once a flurry of sales booked in late September and early October get filled.

US traders and consumers have paid increasing attention to renewed military tensions between major Black Sea exporters, Russia and Ukraine. Combined, the two have accounted for 63pc of US imports so far in 2021. Any disruptions to this supply either through military action or sanctions could squeeze US supply dramatically.


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13/02/25

DeepSeek AI integration to boost long-term metal demand

DeepSeek AI integration to boost long-term metal demand

Beijing, 13 February (Argus) — Increasing integration of DeepSeek's artificial intelligence (AI) models in China is likely to boost long-term demand for metals used in AI infrastructures and products, according to market participants. China's three largest telecommunications companies — China Mobile, China Unicom and China Telecom — have integrated DeepSeek's open source models, and provided exclusive computing power solutions and supporting environments for the DeepSeek-R1 model to help release the performance of the model, the country's industry and information technology ministry said on 9 February. Other major Chinese technology firms including Alibaba, Baidu and Tencent have also announced integration of DeepSeek's models into their cloud platforms. This is likely to accelerate these companies' development of intelligent applications. The country's largest electric vehicle (EV) maker BYD, which sold around 4.2mn EVs last year in China, on 11 February announced plans to integrate software from DeepSeek into 21 of its EV models, enabling the automaker to offer advanced autonomous driving features on all of its 18 models priced above 100,000 yuan ($13,686). DeepSeek's models offer performance for a low price, with its training cost reportedly significantly lower than other large language models. It provides responses comparable to other contemporary large language models, such as OpenAI's GPT-4o. The roll-out of DeepSeek's models is expected to provide low-cost, high-efficiency intelligent services for small and medium-sized companies and individual users, reduce the threshold for the use of AI technology, and accelerate the inclusion of AI technology. Metals demand This development is also likely to boost long-term demand for metals, particularly copper, aluminum, tungsten, molybdenum, gallium, germanium, battery metals and rare earths. AI operations rely on a large number of servers and data centres, with copper widely used in power distribution, grounding and interconnection of the data centres. Global copper demand from data centres is projected to exceed 1mn t by 2026, according to industry estimates. Rapid development of the AI industry is also boosting copper demand in grid systems. Aluminum is used in some cooling and structural components of data centres. Demand for indium phosphide (inP) photonic integrated circuit (PiC) technology from the data centre industry is also growing rapidly, driven by the heavy computing workloads required to support AI. AI growth and data centre demand is also expected to increase the use of compound semiconductor materials including gallium nitride and gallium arsenide. Molybdenum and tungsten can be used to manufacture high-temperature components and electrode materials used in some high-end AI hardware equipment. Rare earth metals also have key applications in AI-related magnetic and optical materials. A faster development of AI products has the potential to increase demand for neodymium iron and boron (NdFeB) material used in special micro-motors and servo motors, rare earth polishing powder used in wafer devices and rare earth magnets used in audio products. Some main domestic smartphone manufacturers such as Huawei, Honor and Oppo have also integrated DeepSeek's services into their products. This is likely to accelerate the development and consumer adoption of AI smartphones. Earlier industry estimates showed that shipments of AI smartphones would rise to 550mn units globally in 2027, making up more than 40pc of total phone shipments. About 30pc of cobalt and 7pc of global lithium production is consumed in the consumer electronics industry. Challenges DeepSeek's development is facing challenges outside China. The DeepSeek application was removed from Italy's app store in January owing to alleged data security concerns. Australia has banned the use of DeepSeek's technology on all government devices. Japanese companies such as Toyota, Mitsubishi and SoftBank have banned the use of DeepSeek for "information security issues". Texas in February became the first US state to ban the use of DeepSeek on government equipment. But the western countries' anxiety about DeepSeek may spur the development of their own AI industries. US president Donald Trump said that DeepSeek was a "wake-up call" for the US technology industry. South Korea's acting president Choi Sang-moo views DeepSeek as a "new impact", planning to pour 34 trillion won ($23.5bn) into the development of the AI and semiconductor industries. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico factory output dips 1.4pc in December


12/02/25
12/02/25

Mexico factory output dips 1.4pc in December

Mexico City, 12 February (Argus) — Mexico's industrial production fell 1.4pc in December from the previous month with broad weakness across multiple sectors on tariff uncertainty and weak domestic demand. The result marks the largest monthly decline of 2024 and was weaker than the 1pc decline forecast by Mexican bank Banorte. It followed a nearly flat reading in November. Trade uncertainty and low domestic demand weighed on industrial production in December, said Banorte, with industry "sluggishness" likely through mid-2025. Manufacturing, which represents 63pc of Inegi's seasonally adjusted industrial activity indicator (IMAI), decreased by 1.2pc after rising 0.7pc in November. Transportation equipment manufacturing output, which comprises 24pc of the manufacturing component, has fluctuated in recent months, falling 6.4pc in December after a 3.6pc uptick in November and a 4.4pc decline in October. Despite this, Mexico's auto sector achieved record annual light vehicle production and exports in 2024. However, Mexican auto industry associations confirm investment in the sector has begun to slow on uncertainty tied to concerns over potential US tariffs and slow economic growth in 2025. Taking the base case that tariffs do not materialize, Banorte expects manufacturing to rebound in the second half of the year as uncertainty lifts and interest rates fall with rate cuts at the central bank. Mining, which makes up 12pc of the IMAI, was lower by 1pc in December, following a 0.5pc increase in November. The decline was again driven by the oil and gas production, falling by 2.5pc in December to mark a sixth consecutive monthly decline for hydrocarbons output. Construction, representing 19pc of the IMAI, contracted by 2.1pc in December with setbacks in all categories. This matched the November result, with Inegi recording declines in construction in five of the last seven months. From a year prior, industrial production fell by 2.4pc in December , while manufacturing fell by 0.3pc and construction declined by 7.1pc in December. Mining was down by 6.2pc. B y James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US inflation quickens to 3pc in January


12/02/25
12/02/25

US inflation quickens to 3pc in January

Houston, 12 February (Argus) — US consumer inflation accelerated in January to the fastest pace in half a year, supporting the Federal Reserve's recent decision to pause in its course of rate cuts. The consumer price index (CPI) rose by 3pc in January from a year before, accelerating from 2.9pc in December, the Bureau of Labor Statistics reported today. That marked a fourth month of annual gains from a low of 2.4pc in September. Core inflation, which strips out volatile food and energy, rose by an annual 3.3pc in January from 3.2pc in December. The acceleration in inflation reinforces the Fed's decision last month to hold its target rate steady after three prior rate cuts. The Fed has said it does "not need to be in a hurry" to change its stance while it weighs the impacts of President Donald Trump's tariff policies and other "incoming information". Trump won the November election partly on a pledge to bring down inflation. The energy index rose by 1pc in January following a 0.5pc contraction through December. Gasoline fell by 0.2pc in January after a 3.5pc contraction through December. Piped gas rose by 4.9pc for a second month. Food rose by an annual 2.5pc, matching the prior month's annual gain. Eggs surged by an annual 53pc, as avian flu has slashed supply. Shelter rose by 4.4pc, accounting for 30pc of the overall monthly gain in CPI, slowing from 4.6pc in December. Services less energy services rose by 4.3pc in January following a 4.4pc gain New vehicles fell by 0.3pc after a 0.4pc contraction. Transportation services rose by an annual 8pc in January after a 7.3pc gain in December. Car insurance was up by an annual 11.8pc and airline fares were up by 7.1pc. CPI accelerated to 0.5pc in January from the prior month, the most since August 2023. That followed a monthly gain of 0.4pc in December, 0.3pc in November and three prior months of 0.2pc gains. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

China’s CNGR to end investment in nickel JV with Posco


12/02/25
12/02/25

China’s CNGR to end investment in nickel JV with Posco

Singapore, 12 February (Argus) — Major Chinese lithium-ion battery cathode active material (CAM) precursor manufacturer CNGR will terminate investment in a nickel refinery joint venture with South Korean multi-sector company Posco Holdings, it announced today. The joint venture, Posco CNGR Nickel Solution, will be liquidated after the termination. The decision is part of efforts to reduce investment risks and protect investors' interests in the face of a weak electric vehicle (EV) market. A slowdown in global EV demand has led to slower growth in battery installations in 2024 compared with a year earlier, South Korean market intelligence firm SNE Research reported. CNGR and Posco announced plans in June 2023 to build a production facility for nickel and lithium-ion battery precursors in Pohang, South Korea. The plant was intended to have a design capacity of 50,000 t/yr metal equivalent for nickel sulphate and 110,000 t/yr for lithium-ion battery precursors, which was expected to meet demand from 1.2mn units of EVs. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Cyclone Zelia threatens Australian Fe, Li, Mn exports


12/02/25
12/02/25

Cyclone Zelia threatens Australian Fe, Li, Mn exports

Sydney, 12 February (Argus) — Cyclone Zelia off Western Australia's (WA) Pilbara coast is on track to make landfall on 13 February, threatening iron ore, lithium and manganese exports from the region. Australia's Bureau of Meteorology (BoM) expects the cyclone to develop into a relatively rare and extremely powerful category three system on 13 February, as it starts heading towards WA's mines. The Pilbara Ports Authority (PPA) will close Port Hedland — Australia's largest iron ore export hub — at 6pm local time (7am GMT) on 12 February, having started clearing ships out of its berths a day earlier. Port Walcott — a smaller export facility to the west of Port Hedland — is also emptying its berths, in preparation for the cyclone. Cyclone Zelia on 14 February will pass over a part of WA where Fortescue's Iron Bridge mine, Mineral Resources' Wodgina lithium mine, Pilbara Minerals' Pilgangoora lithium mine, and three of Atlas Iron's mines are located, according to BoM forecasts. The cyclone will then move south over Fortescue's Christmas Creek and Cloudbreak iron ore mines, the Roy Hill iron mine, and Consolidated Minerals' Woodie Woodie manganese mine early on 15 February, before losing energy and dissipating by the next morning. Cyclone Zelia is the third weather system to disrupt WA's ports this year. Cyclone Sean flooded parts of Port Dampier and forced PPA to close all of its export facilities for two days at the end of January. Ships subsequently started moving out of Port Walcott and Port Dampier over the first week of February because of Cyclone Tahlia, driving Rio Tinto's exports to their lowest point since at least January 2019 . But WA has experienced extreme weather events before. Cyclone Veronica shuttered three WA ports for nearly a week in March 2019 . Cyclone Ilsa in April 2023 also drove PPA to close Port Hedland for two days . The four main iron ore prices that Argus assesses have risen over the last month. Argus' Iron ore fines 62pc Fe (ICX) cfr Qingdao price rose to $105.80/t on 11 February, from $97.90/t on 13 January. By Avinash Govind Iron ore prices $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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