High electronics prices may erode battery metal demand

Spanish Market: Battery materials, Metals
20/03/26

Rising prices for consumer electronics, particularly mobile phones — if memory-chip supply is tightened by a protracted Middle East conflict — are likely to have a negative impact on global battery metals demand.

Consumer electronics is one of the main downstream demand segments for several battery metals, including cobalt and lithium. This sector accounts for 35pc of global cobalt consumption and 3pc of lithium demand, according to Argus' estimates.

Major Chinese smartphone manufacturers such as OPPO, vivo and Honor have raised prices — by 200-1,000 yuan ($29-145) per unit. The price of some flagship models is up by about 10pc.

The effective closure of the strait of Hormuz poses risks to global semiconductor manufacturing — Asia-Pacific chipmakers rely heavily on energy imports from the Middle East. South Korea and Taiwan are home to the world's most advanced chip-fabrication capacity, which requires large amounts of energy. Around 60–70pc of crude imports for both these countries transits the strait.

At the same time, supply disruption caused by the Middle East conflict has triggered a global helium shortage and driven prices sharply higher. About a third of the world's helium output comes from Qatar, according to industry sources. The disruption has pushed helium inventories at some memory-chip producers down to warning levels.

Higher prices may mean consumers are in less of a hurry to upgrade their phone, and this could undermine battery metals demand. But battery metal spot markets have not registered an immediate impact from this development, and market participants are assessing whether supply factors could offset or even outweigh the effects of pricier handsets.

The cobalt market continues to face pressure from a pause in exports from the world's largest feedstock-producing country, the Democratic Republic of Congo, after authorities raised concerns over mismatched assay results for cobalt hydroxide. And lithium market participants are assessing whether Zimbabwe's export ban will offset a slowdown in buying and whether the country is likely to resume concentrate exports any time soon.

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20/03/26

UK HRC prices likely to surge on quota plan: sources

London, 20 March (Argus) — UK hot-rolled coil (HRC) prices will surge in the coming months if the government goes ahead with a plan to reduce quotas by almost 90pc , attendees of the International Steel Trade Association (ISTA) forum told Argus . A confidential provisional document from the UK business and trade ministry shows annual 1A HRC quotas of 68,226t for the EU, 12,405t for India 3,258t for South Korea and 18,452t for other countries. This equates to around 102,000t, compared with a current quota of almost 1mn t. Around 630,000t was imported into the 1A quota last year, substantially below the total volume, but much higher than the provisionally proposed quota. The final quotas could change, sources suggested, depending on how much access UK producers get to the EU, which is also establishing a new quota from July. But UK market prices, which had already started to jump in response to Tata Steel UK's £125/t hike earlier this month, are already reacting. Service centres are now offering hot-rolled sheet above £800/t, up from around £550/t just a few weeks ago. More increases are likely in the coming weeks, with several service centres suggesting the inflation would severely hamper consumption given the already constrained demand environment. One large service centre, which buys limited domestic material, said it could see HRC prices reaching £900/t. Argus ' weekly UK HRC assessment was £645/t ddp yesterday. EU mills with spare capacity to sell into the UK before July are likely to push offers even higher — some offers were already at £700/t ddp before the document circulated. UK prices were at a discount to EU levels late last month, but have already increased to a €37/t premium, which is likely to rise sharply in the coming months. Should the quota be reduced to 102,000t, there would be large shortages on some grades, such as 2m wide HRC, which is widely used but not produced in the UK. Two large service centres, which both procure little domestically, could each easily buy more than the proposed quota, based on their current throughput. A much smaller cut has been proposed for the hot-dip galvanised (HDG) quota — which would drop from around 1.9mn t to 1.1mn t but give more volume to low-cost suppliers South Korea and Vietnam — prompting some to suggest that HRC prices could outstrip HDG. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Wine decline boosts California scrap supply

20/03/26

Wine decline boosts California scrap supply

Pittsburgh, 20 March (Argus) — A drop in alcohol consumption among young adults is having the unexpected impact of driving ferrous scrap flows in California's wine country, as vineyards cut back on acreage. Scrap generated by northern California vineyards is a reliable part of the region's metal supply chain. The grapes grow on steel wires strung between 6-foot-tall steel "grape stakes," with a certain percentage of them recycled each winter after the harvest. A decline in wine drinking in the US has caused grape growers to reduce their planting acreage, leading to significantly more grape stake recycling. At least 30-40pc more grape stakes are entering the scrap market in the region for recycling this year compared to previous seasons, metal recyclers tell Argus . "We're being bombarded with grape stakes," a Bay Area scrap recycler said. An acre of cleared vineyard land yields about one short ton (st) of grape stakes, another northern California scrap recycler said. The total volume of grape stakes scrapped in the San Francisco Bay Area is unclear, but one source estimated as much as 50,000st this year. Wine drinking falls after pandemic spike About 54pc of US adults said last year that they drank alcohol, the lowest mark in at least 90 years, according to a poll by analytics firm Gallup. That figure was at about 60pc as recently as 2023, the poll found. The decline in alcohol consumption is among all demographics, but health-conscious young adults are driving the trend. Around 59pc of adults aged 18 to 34 said they drank alcohol in 2023, but that figure fell to 50pc in last year's Gallup poll. US wine consumption has been falling since a 2021 peak of 1.06bn USG, according to the Wine Institute, a California-based industry group. By 2024 consumption had fallen by 18pc to 870mn USG. California growers have responded to the drop in demand by planting fewer grapevines and removing others. Winegrape acreage has been falling in California since 2018, when the state's Department of Food and Agriculture estimated about 637,000 acres planted. Winegrape acreage fell by about 7pc to an estimated 590,000 acres in 2024. A new mapping project by the California Association of Winegrape Growers showed the downtrend in grapevine planting continued last year, with nearly 40,000 acres of vines removed between October 2024-August 2025. Those barren acres have added significant tonnage of grape stakes to California scrap yards' stockpiles. A regional scrap bright spot Sputtering consumer spending and weather disruptions in California curbed typical scrap supply flows this winter, such as from used cars and appliances. But grape stakes have been a bright spot, a handful of Bay Area recyclers said. Grape stakes are a niche grade of scrap lighter than a typical #1 HMS that can be processed in a variety of ways. They can be sheared and mixed into HMS 1/2 80:20, but the wires attached to the stakes can make processing them challenging. The stakes can also be blended in with shredder feed. Shredder feed delivered to San Francisco area scrap export yards has trended up this year, rising to $192/gross ton (gt) on average through 17 March, up by $13/gt from last year. The long-term pricing trend has been falling since a pandemic-era spike, when shredder feed reached a 2021 average of $260/gt delivered in the San Francisco area. Grape stake recycling is typically seasonal, but local scrap yards said they have received a steady stream of them throughout the past year. "We've been doing grape stakes nonstop for eight months," a Bay Area recycler said. "It doesn't look like it will stop anytime soon." By James Marshall Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

China steel market muted after Two Sessions meeting

19/03/26

China steel market muted after Two Sessions meeting

London, 19 March (Argus) — Steel market reactions to China's Two Sessions — its paramount annual political and economic gathering — were muted, as policy signals met market expectations. The meeting conveyed a cautious economic stance, setting a 2026 GDP growth target of 4.5–5pc and a fiscal deficit ratio of around 4pc. Supply The "anti-involution" theme — a drive to curb excessive, self-defeating price competition across industries, including electric vehicles, solar and steel, by phasing out outdated capacity — resurfaced at this year's meeting. Introduced in July last year, the concept previously triggered a sharp rally in steel prices. The National Development and Reform Commission (NDRC) released a 2025–26 work plan in September to stabilise steel industry growth. The plan called for precise control over capacity and output, while prohibiting capacity additions. It also seeks to promote market-based elimination of weaker participants to achieve a balance between supply and demand. China's crude steel output fell by 4.4pc to 960.81mn t in 2025, according National Bureau of Statistics data. Market participants largely attributed the decline to market-driven adjustments rather than administrative intervention. During this year's Two Sessions, the NDRC reiterated plans to further reduce capacity in steel, refining and other sectors. But the plans lack concrete production reduction targets and were viewed by some market participants as non-committal. China's crude steel output fell by 3.6pc on the year to 160.34mn t in January–February, despite the absence of mandatory curbs. Demand-side The real estate sector — historically the largest consumer of steel — saw no significant policy support. Official statements emphasised "controlling new supply and reducing inventories", suggesting a continued focus on derisking rather than stimulus. Infrastructure investment remains broadly stable. China plans to allocate 755bn yuan ($109.48bn) from the central budget, alongside Yn800bn in ultra long-term special government bonds. In addition, Yn4.4 trillion in local government special bonds will be issued to support major construction projects, replace implicit debt and clear government arrears. Overall, investment levels are largely in line with 2025. Downstream demand from the manufacturing sector also appears to have limited upside. Key consumers of flat steel — including automobiles, home appliances and machinery — face reduced policy support this year. Subsidies for automobiles and home appliances have been scaled back. The government work report proposed allocating Yn250bn in ultra-long special treasury bonds to support consumer goods trade-in programmes, down by Yn50bn from 2025. These funds serve as the primary subsidy pool, with autos and home appliances accounting for the bulk of eligible categories. Support for machinery is largely unchanged, with Yn200bn in special bonds earmarked for large-scale equipment upgrading. Outlook This year's Two Sessions indicated that Beijing is wary of aggressive stimulus measures for 2026. The steel sector is likely to rely more on mills self-regulating their output, alongside market-driven consolidation, to navigate the ongoing adjustment period. Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

China Cu prices fall on higher stocks, stronger dollar

19/03/26

China Cu prices fall on higher stocks, stronger dollar

Shanghai, 19 March (Argus) — Copper prices in China have retreated in March, pressured by rising inventories and a firmer US dollar. The most-traded Shanghai Futures Exchange (SHFE) April contract fell from 103,920 yuan/t ($15,104/t) on 27 February to a three-month low of Yn95,400/t on 18 March. London Metal Exchange (LME) three-month copper fell from a close of $13,296/t to $12,340.50/t over the same period. Combined LME and SHFE copper inventories increased to 745,283t on 13 March, up by 56pc from a month earlier. The build reflects higher refined output in China and a slower-than-expected recovery in demand following the 15-23 February lunar new year holiday. Industry estimates indicate China's refined copper output rose by 8-13pc on the year in January-February. Tight concentrate availability has not yet curtailed refined production, with smelters maintaining operations by accepting lower concentrate treatment and refining charges (TC/RCs). The Argus weekly TC index fell to -$60.20/t and -6.02¢/lb on 13 March, from -$44.60/t and -4.46¢/lb on 31 December. China imported 4.934mn t of copper concentrate in this year's first two months, up by 5pc on the year, customs data show. Market participants expect China's refined copper output to rise further in March, with Liangshan Copper planning to begin trial operations at its new 125,000 t/yr refinery this month. But demand growth in the new energy vehicle (NEV) sector — a major driver of Chinese copper consumption in recent years — has moderated following cuts to purchase incentives . China's NEV output and sales fell by 8.8pc and 6.9pc to 1.735mn and 1.71mn units in January-February, according to data from the China Association of Automobile Manufacturers. Argus forecasts copper demand from China's new-energy sectors to grow by about 2pc to more than 3.3mn t in 2026, far below the estimated 27pc increase in 2025. Downstream restocking interest remains limited, with domestic spot premiums assessed by Argus trading at discounts to SHFE since mid-January. China's imports of unwrought copper and semi-finished products fell by 16pc on the year to 700,000t in January-February, reflecting weaker import appetite during those months as arbitrage remained closed. Stronger dollar A strengthening US dollar has added further pressure to copper prices. The dollar index rose to a four-month high of 100.54 on 13 March, from 98.826 on 10 March. Market participants expressed concerns that sharply higher oil prices driven by the Middle East war could delay US monetary easing. The Ice front-month May Brent contract increased from $91.40/bl on 10 March to $109.65/bl on 18 March because of ongoing geopolitical tensions in the Middle East region. The US Federal Reserve kept their target interest rate unchanged on 18 March, citing uncertainty stemming from "developments in the Middle East" following the Iran conflict. It continued to pencil in one quarter-point rate cut this year, unchanged from the previous projection in December. Policymakers still see one more quarter-point cut in 2027. But the copper market may remain bullish in the medium term from an international perspective. The war in the Middle East still carries supply-side risks that could tighten conditions later if they intensify, particularly in the African copper belt. Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Australia’s South32 moves Gemco Mn workers offsite

19/03/26

Australia’s South32 moves Gemco Mn workers offsite

Sydney, 19 March (Argus) — Australian metals producer South32 is moving non-essential personnel offsite from its Groote Eylandt manganese operations (Gemco) as Cyclone Narelle approaches, a company spokesperson told Argus today. Gemco, located in the Northern Territory, sits in a region expected to be in Cyclone Narelle's path. South32 is working with the Local Emergency Controller to monitor the incoming weather system, the spokesperson added. Cyclone Narelle will pass Groote Eylandt — an island in the Gulf of Carpentaria — on Saturday afternoon, according to Australia's Bureau of Meteorology (BoM). The cyclone is forecast to be a category three weather system by that time, BoM meteorologist Angus Hines said in a weather update. Groote Eylandt should expect a real uptick in the wind and rain conditions from around Saturday afternoon, Shenna Gamble, BoM's hazard preparedness and response manager for the Northern Territory, said at a press conference. South32 has faced severe weather challenges on Groote Eylandt before. The company paused mining operations on the island for four months in March 2024 because of Cyclone Megan. It only resumed manganese exports from Gemco in May 2025. South32 plans to produce 3.2mn t of manganese at Gemco in July 2025-June 2026, it said in a quarterly report on 22 January. The company raised its March-delivery Australian 43pc lumpy manganese ore cif China price by $0.10/metric tonne unit (mtu) to $5.20/mtu in late January because it expected Chinese demand for the metal to increase after the lunar new year holidays in February. Argus ' manganese ore 44-46pc Mn cif China price was last assessed at $5.23/mtu on 12 March, up from $4.63/mtu on 31 December. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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