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Japan Al: 1Q premium surges on tight supply

  • Spanish Market: Metals
  • 09/01/25

Japan's aluminium P1020 premiums for the first quarter of 2025 was settled at $228/t over cash London Metal Exchange (LME) prices. Premiums rose by $53/t from the previous quarter, reaching the highest level since Argus began the assessment in 2016.

Initial offers were much higher at above $240/t in December, and only a small volume was concluded at $228/t to Japan. The significant increase was primarily driven by concerns over future supply in the seaborne market and escalating trade measures in the global market.

Some suppliers either withdrew their production forecasts or planned to reduce output levels, fuelling concerns about tight supply. China announced the cancellation of the 13pc export tax rebate for fabricated aluminium products from 1 December 2024, which led to increased demand from rolling mills outside China. The premium in the US also rose because of potential higher import tariffs.

But demand in Japan is still weak owing to slow domestic car production and construction activity. Japan's domestic car production continued its downward trajectory for most of 2024, with output recording a year-on-year fall for every month from January to November, except in May and July.


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06/02/25

Japan’s Honda, Nissan mull scrapping merger plan

Japan’s Honda, Nissan mull scrapping merger plan

Tokyo, 6 February (Argus) — Japanese car maker Honda and Nissan are considering ending merger talks, a representative of Honda told Argus today. Ending negotiations for proposed merger is among the issues the two firms are discussing, Honda's representative told Argus on 6 February, without providing further details. Honda will make an official announcement regarding the deal, including its course of action, in mid-February, according to statements released by the firm on 5 February. Nissan similarly commented that the firms are "in the stage of advancing various discussions", according to a statement the company separately released on 5 February. This includes "the contents of the report", the statement said, referring to the local news story about a possible withdrawal from the basic merger agreement with Honda. Nissan reiterated that the report is not based on any official announcement from the company. This comes only several weeks after the firms launched formal merger negotiations in late December 2024. This included setting up a joint holding company under which the current brands would operate as subsidiaries. The merger plan was partly aimed at jointly developing electric vehicles (EVs) along with studying possible areas of co-operation in developing automotive software platforms, core components relating to EVs and complementary products. Tough negotiation was anticipated from the beginning partly because of Nissan's financial struggles. Honda had suggested the merger plan could be scrapped depending on Nissan's turnaround, reiterating that the proposed merger is not aimed at alleviating Nissan's financial situation. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US met coal market mixed on China tariffs


05/02/25
05/02/25

US met coal market mixed on China tariffs

London, 5 February (Argus) — US coking coal market participants are still mulling their position since President Donald Trump reignited the country's trade standoff with China and Beijing retaliated on Saturday with substantial tariffs . Market sources said the retaliation will affect some coals more than others, but disagree on the severity of the risk. Many US producers ramped up exports to China in 2020 and 2021 following restrictions on Australian imports. But trade flows have slowed in the past two years largely because of lower-priced Russian and Mongolian met coal driving down Chinese price expectations and wider weakness in the seaborne coking coal prices making US sales to China less attractive. The Chinese tariffs announced yesterday apply to US coal and other energy products such as crude and LNG . Starting on 10 February, a 15pc levy will be added to the pre-existing 3pc tax on US coking coal imports for a total 18pc. The industry is cautious to draw conclusions as China returns from holiday and a diplomatic solution to the dispute is still deemed possible in light of the start date. But seller sentiment has generally been negative on the threat of further downward price pressures in a struggling market. "We are still hopeful that a trade war can be averted, or at least not last too long. Trump does a lot of talking as part of his negotiation style, but eventually, it is good for both countries to find a solution," one US producer said. Expectations are for some US exporters to turn to India as an alternative, but again they would face competition from Russian producers. Still, some in the market question how real an impact the measures could have, in particular citing the strong presence of Core Natural Resources' low-cost Bailey coal in the shipment volumes to China. Market estimates suggest that around 2mn-3mn t of Bailey coal was shipped to China last year, accounting for about 30-40pc of US exports to China. Consol, part of the newly merged Core, reported an average cash cost of $35.85/st for coal produced at its Pennsylvania mining complex, where Bailey originates, in the quarter ending 30 September last year. "I don't think it will be the consequence that everyone fears because the higher-quality US coals are already too expensive [in China]," one European trader said. "The Chinese are not looking to buy too much material." A common reason sellers give for not dealing with China is that many Chinese buyers contractually expect US sellers to take the risk of tariff hikes. The expectation is likely to deter even more producers now that risk is soon to be reality. "I can't imagine anyone in the US is going to be accepting that contract now," an Alabama-based supplier said. Not all downhill But there may still be some upward support ahead for US coking coal prices. US production has slowed over the past half year, first with a fire shutting the Allegheny Metallurgical Coal's Longview mine in West Virginia and more recently the fire at Core's Leer South mine resulting in a force majeure . Heavy snow fall in December and mine operators cutting additional shifts in a weak price environment has also curtailed output. In Europe, ongoing production issues at the coking coal mines operated by JSW in Poland may also add to a supply squeeze in the Atlantic. While Chinese tariffs may push down prices of US coal, stronger Chinese demand for Australian coal could potentially lend support to fob prices in Asia-Pacific too. How exactly US supply will be diverted from China in the event of a trade war and how this will affect prices is very much an open question. When China first imposed tariffs during its trade war with the US in July 2018, Argus ' high-volatie A fob Hampton Roads assessment rose by $22/t to its height in November. By the time the dispute was wrapping up in 2020, prices had sunk to near $60/t below pre-tariff levels. By Austin Barnes and Siew Hua Seah US coking coal exports since 2019 by partner '000t Partner 2019 2020 2021 2022 2023 2024 India 4,260 4,035 3,235 7,657 8,400 9,604 China 1,064 1,485 10,337 2,432 4,846 8,123 Brazil 6,707 6,182 5,100 5,353 6,271 6,297 Netherlands 4,628 3,116 3,041 4,960 4,068 4,609 Japan 6,011 3,291 2,950 3,617 4,594 3,858 Turkey 1,442 2,469 743 1,361 1,387 2,270 Germany 405 33 1,006 1,424 1,315 1,193 France 1,085 773 612 1,185 999 1,041 South Korea 2,473 2,090 824 1,161 1,032 1,013 Spain 418 333 493 653 616 664 Tariffs pulled back in March 2020 — Global Trade Tracker US high-volatile coal prices fob Hampton Roads $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Q&A: Africa's role in the EV revolution


05/02/25
05/02/25

Q&A: Africa's role in the EV revolution

London, 5 February (Argus) — The African continent plays a vital role as a supplier of raw materials essential for electric vehicles (EVs), but what about the downstream? Argus spoke with Dave Coffey, chief executive of the African Association of Automotive Manufacturing(AAAM), at the sidelines of the Indaba Mining Conference in Cape Town, South Africa about Africa's EV ambitions. Which African countries are ready for EV adoption? We see demand for motorcycles and public transport today, and east Africa is leading that market. The passenger car will take much longer because of affordability issues. Today, we are struggling to increase the sale of internal combustion engines (ICE) and transitioning to electric vehicles will not happen quickly. Instead, you are likely to see an increase in three-wheelers or even four-wheeled micro-mobility options, while passenger cars will lag. Also, countries will transition at different speeds depending on their natural resources. Some countries have gas, CNG, and they're pushing to convert vehicles to piped natural gas (PNG). Others are pushing for green hydrogen. You're going to see different journeys on the transition to electric mobility. And if you just look at India and China — I often use India as a benchmark for Africa because of its similar population — they are exploring all different types of powertrains, and Africa will be likely to follow suit, moving at various speeds. Which countries are better positioned in the EV supply chain? South Africa clearly has the greatest demand on the continent today. If you look forward, say, 10 years, Egypt will have strong demand. Egypt will come through and can produce 500,000 vehicles in the next decade for its own consumption. Algeria is also taking off. Its industry was closed for a number of years owing to corruption issues. Algeria could get to 400,000 vehicles. Morocco will get to 220,000 vehicles for its own use, not for exports. Tunisia will probably be at 80,000 cars. In sub-Saharan Africa, the Ivory Coast may see demand for 80,000 to 90,000 vehicles. We are investing significant effort into driving demand in sub-Saharan Africa because of the vast opportunities present there. However, it is essential to provide affordable mobility solutions to reduce the reliance on used vehicle imports. What are the main challenges apart from affordability? It's the political will to implement the industrial policy, because how do you switch over and cut off used vehicles? You can't industrialise and hope people will buy when they can't afford to buy. The big issue is access to affordable finance. It's a big issue that we're working on in Africa. Imagine if you have a new vehicle that becomes a used vehicle and attracts vehicle finance. It'll compete with the used cars coming in. Financing is a critical issue, both from a consumer perspective and an investment perspective. You're getting component manufacturers wanting to invest. It's not a big ticket out of $10mn. It might be $2mn, and they're not able to access capital. Finance all around is a big development drive in Africa. Are there any logistical problems delaying EV adoption? My view on logistics is that, for example, people say we can't ship between one country. We've already seen, and I've got examples, that when the volume picks up, it just gets sold. It does. Because then you've got shipping lines that will put on the shipping routes. Yes, Africa does face logistics challenges, particularly the lack of rail infrastructure. However, consider this: currently, intra-Africa trade is only at 17pc. Imagine if that figure increased to 50pc. We would need a significant number of commercial vehicles to support that growth. Commercial cars have a huge future for Africa as a result of the intra-Africa trade we're trying to drive. Creating demand drives the value chain and the entire ecosystem. We need to generate demand. By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs to push automotive prices higher


03/02/25
03/02/25

US tariffs to push automotive prices higher

Houston, 3 February (Argus) — US tariffs on Canada and Mexico would likely lift automotive production costs noticeably higher as automakers and their suppliers rely on multiple cross-border shipments. US president Donald Trump said over the weekend he would enact 25pc tariffs on imports from Canada effective 4 February, but delayed Mexican tariffs until at least March . An all-encompassing tariff on the two and potential retaliatory tariffs could severely hamper regional automotive producers, which draw from cross border flows for both raw materials including finished steel and aluminum as well as integral parts and components. The tariffs are meant, in part, to drive more manufacturing back into the US — as General Motors chief executive Mary Barra said her company would likely do should the tariffs be imposed on Canada and Mexico. Other automotive manufacturers could possibly follow suit in order to escape the increased costs associated with tariffs. But shifting operations from one country to another would be costly and time consuming. Some manufacturers produce parts for the same vehicle on different sides of the border, meaning even a car or truck assembled in the US could see its costs increase if it relies on parts made by the same company at a Canadian factory. Completed vehicles The US imported 2.855mn of its smaller passenger vehicles from Mexico and Canada between January and November of 2024, according to customs data, or about 41pc of all such vehicles. The two nations also accounted for the import of 1.16mn heavier vehicles designed for the transport of goods in the same period, or about 95pc of all of those vehicles. Mexico alone sent 83,201 tractors to the US for the year-to-date 2024, roughly 39pc of the US total. Automotive parts Cross border flows of parts and accessories could be curtailed even more as they likely will have to cross in and out of the US in multiple stages, potentially receiving multiple 25pc tariff hits. The US imported 3.4bn motor vehicle parts and accessories from the two countries or about 38pc of all such imports, and exported 3,073t of these parts back across the border to Canada and Mexico. Nearly 90pc of the US' exports of spark-ignition piston engines, or 3.57mn units, were sent to Canada and Mexico, while 30pc of all US imports of such engines, or 2.26mn units, come from the two countries. The US imported roughly 82pc or 43,582t of its cast-iron parts for internal combustion engines from Mexico. Metal mounting and fitting imports for automobiles from Mexico alone represented 73pc of US totals, with the US in return exporting 64pc of such products back to Mexico. Canada took in 24pc or 29,035 metric tonnes (t) of the product. The US acquired 40pc or nearly 36,000 of larger auto bodies and chassis from the two nations in 2024, while sending 57.5pc of its exports or 21,553 back across the same borders. Alternatives limited Although some alternative import sources do exist, many of these auto plants are located inland of key receiving ports and have closely tied operations that could require multiple stagged parts replacements. Some vehicles are estimated to cross US borders into Canada and Mexico and back as many as seven or eight times before final assembly, according to a 2021 Congressional Research Service paper. China would be a major alternative supplier for US or Canadian automotive parts in multiple cases, including for internal combustion engines. The US imported $87.1bn in light vehicles from Canada and Mexico and $77.5bn in automotive parts in 2022, according to a 2023 US International Trade Commission report. Any tariff could notably sting regional automotive producers just climbing out of multi-year low sales levels. US total vehicle sales hit a seasonally adjusted annual rate of 17.22mn in December, the highest level since May of 2021, according to Federal Reserve data. By Cole Sullivan and Zach Schumacher US automotive imports from Canada count Jan-Nov 2024 Jan-Nov 2023 Diff ±% Share of total volumes Full vehicles, bodies, and chassis Tractors 1,612 1,395 217 15.60% 0.80% Motor vehicles 915,408 1,138,494 -223,086 -19.60% 13.00% Motor vehicles for transport of goods 152,232 150,279 1,953 1.30% 12.50% Special-use vehicles (ex. firetrucks) 1,826 1,554 272 17.50% 53.40% Work trucks (ex. airport luggage vehicles) 1,595 1,656 -61 -3.70% 8.00% Vehicle chassis fitted with engines 1,821 1,622 199 12.30% 14.60% Vehicle bodies 8,896 8,584 312 3.60% 11.50% Spark-ignition engine parts 705,337 924,439 -219,102 -23.70% 9.40% Compression-ignition engine parts 3,198 3,759 -561 -14.90% 0.10% Parts and accessories 1.23bn 1.28bn -48mn -3.80% 13.70% — US Census Bureau US automotive imports from Mexico count Jan-Nov 2024 Jan-Nov 2023 Diff ±% Share of total volumes Full vehicles, bodies, and chassis Tractors 83,201 108,267 -25,066 -23.20% 38.90% Motor vehicles 1.94mn 1.79mn 151,439 8.50% 28.00% Motor vehicles for transport of goods 1,007,433 919,850 87,583 9.50% 82.40% Special-use vehicles (ex. firetrucks) 35 70 -35 -50.00% 1.00% Work trucks (ex. airport luggage vehicles) 6,513 4,214 2,299 54.60% 32.50% Vehicle chassis fitted with engines 4 7 -3 -42.90% <0.1% Vehicle bodies 25,285 15,922 9,363 58.80% 32.60% Spark-ignition engine parts 1,551,874 1,415,311 136,563 9.60% 20.60% Compression-ignition engine parts 1,526,994 1,943,567 -416,573 -21.40% 68.60% Parts and accessories 2.17bn 2.18bn -8,121,686 -0.40% 24.30% — US Census Bureau Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US delays Mexico tariffs by a month: Update


03/02/25
03/02/25

US delays Mexico tariffs by a month: Update

Adds comments from press conference, White House response, historic context. Mexico City, 3 February (Argus) — The US has agreed to postpone the 4 February implementation of 25pc tariffs on Mexican goods by one month to allow more time for negotiations, President Claudia Sheinbaum said today. Under an agreement with the US, Mexico will immediately reinforce its border with the US with 10,000 national guard troops to limit drug trafficking into the US, with a specific focus on fentanyl, Sheinbaum posted on social media platform X. The US pledged to take stronger action to curb the flow of high-powered firearms into Mexico, she said. The pause will allow "Mexico time to demonstrate good results for the US people and our people" on key security concerns, Sheinbaum said. US president Donald Trump confirmed the tariff delay in a social media post, saying there would be negotiations in the coming weeks with Mexican officials and US secretary of state Marco Rubio, secretary of the treasury Scott Bessent and secretary of commerce Howard Lutnick. The White House praised Mexico's willingness to respond positively to the tariff threats, while characterizing the Canadian response as [a] misunderstanding. "The good news is that in our conversations over the weekend, one of the things we've noticed is that Mexicans are very, very serious about doing what President Trump said," White House National Economic Council director Kevin Hassett said in a broadcast interview. Canada had "misunderstood the plain language of the executive order and they're interpreting it as a trade war." Trump said this morning that he "looks forward to negotiations" with Sheinbaum to reach a deal between the countries. He is also talking to Canadian premier Justin Trudeau later today. The announcements today do not address Trump's complaints of a trade deficit with Mexico, which Sheinbaum said during a press conference today the US misinterprets as a negative. Both the US and Mexico benefit from the region becoming more competitive, she said. Mexico will also keep its retaliatory tariffs on the table: "We will save Plan B for later, if necessary," Sheinbaum said. The current tensions are similar to those from 2019, when Trump threatened to impose 5pc tariffs on all Mexican goods. He relented when former president Andres Manuel Lopez Obrador said Mexico would deploy 21,000 national guard troops to contain the flow of migrants toward the US. If the tariffs were implemented, it would disrupt the energy trade between the US and Mexico. Nearly all of Mexico's roughly 500,000 b/d of crude shipments to the US in January-November 2024 were waterborne cargoes sent to US Gulf coast refiners. Those shipments in the future could be diverted to Asia or Europe. Mexico also imports much of its road fuels and LPG from the US. But the country is unlikely to hit these goods with retaliatory tariffs, according to market sources. By Antonio Gozain and Cas Biekmann Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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