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Atlantic coking coal: China tariff exemption lifts mood

  • : Coking coal, Metals
  • 20/02/19

Beijing's decision to allow buyers of US coking coal in China to apply for tariff exemptions from 2 March has buoyed sentiment among US miners significantly this week.

While US miners have welcomed the possibility of increasing their shipments to China, most do not expect an immediate surge in US coking coal prices.

The Argus daily fob Hampton Roads assessment for low-volatile coking coal in the US has moved up another 75¢/t to $135.25/t today, supported by supply tightness in China but also partly weighed down by possible steel capacity cuts in the country. The high-volatile type A daily price is up by 50¢/t to $137.50/t fob Hampton Roads, as is the high-volatile type B price at $125.50/t fob Hampton Roads, because any upside from increased Chinese demand is still tampered by lacklustre demand from European mills that are in greater proximity.

The exemption announced yesterday applies to China's retaliatory tariffs on US coal imports imposed in August 2018, and will bring the effective tariff down to 3pc for US coal shipped to China.

China's ministry of finance reduced tariffs on US coking coal by 2.5pc on 6 February, but the impact of the reduction on an effective rate of 33pc — including the 3pc original import tax, 25pc retaliatory tariff and variable inspection and quarantine charges — was deemed negligible by market participants.

"We have been seeing some tentative interest from Asia, and China's exemptions may open up a bit more interest, but China is not running at full capacity yet due to the coronavirus outbreak," said a trader. "I think there will be a spike in demand once there is more clarity on the situation."

Poor spot demand in Europe has also meant that some miners are more cautious about the impact of these tariff exemptions on their business. "This is a huge change and many people will be pleased about that," said one US miner. But there is still little-to-no spot demand in Europe in the near term, and some mills have yet to firm up their annual requirements for the next supply contracted year starting in April. European mills seem to have carry over volumes from their annual term contracts and US producers will expect these commitments to be met, said the miner.

The US east coast-to-Rotterdam Panamax rate has risen by $1/t to $9/t this week, as the tightening of tonnage in the Atlantic amid increased coal and grain export demand gave the most significant boost to rates since mid-December.


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24/09/20

Northvolt's future unclear as Sweden rejects stake

Northvolt's future unclear as Sweden rejects stake

London, 20 September (Argus) — The future of Swedish battery and cathode active material (CAM) producer Northvolt is unclear after the country's Prime Minister Ulf Kristersson confirmed this week that the government will not invest in the company. Northvolt has had to cut back its expansion plans because of challenging macroeconomic and market conditions. Northvolt's difficulties were thrown into the spotlight last week when chief executive and co-founder Peter Carlsson said the company will scale back its expansion plans for a second CAM factory in Borlange, Sweden – a facility that is intended to help ease regional dependence on imports from China which currently accounts for over 70pc of global CAM production, according to the IEA. The adjustment at Borlange is one of several setbacks at Northvolt, whose Skellefteå factory in the far north of Sweden delivered less than 1GWh of battery production last year – enough to power around 20,000 cars and far below the plant's nameplate capacity of 16GWh. Back in June, German carmaker BMW pulled out of a €2bn ($2.2bn) order, albeit just 4pc of Northvolt's order book of $55bn, according to its 2022 annual report – underscoring the slowdown in European demand for electric vehicles (EVs) and therefore battery materials. Carlsson maintains that the "long term outlook for cell manufacturers — including Northvolt — is strong", despite the "challenging macroeconomic environment." And while the Swedish government has declined to invest, Northvolt did receive a €5bn ($5.58bn) loan in January — the largest loan raised by a climate tech firm in Europe to date, along with €942mn from the European Investment Bank (EIB). Overall, the company has received around €15bn ($16bn) of investments to date — in debt and equity — since its founding in 2017 by two former Tesla executives, comfortably making it Europe's best-funded start-up, ahead of fintech firm Klarna at $4.6bn. However the road ahead is challenging and costly, and additional support will be needed. "Northvolt haven't gone under but are not going to produce any CAM material until 2026 at the earliest, so difficult times, the EU needs to step up and support," a market participant commented. The scale of growth and support being given to China's battery and electric vehicle (EV) sectors is also compounding the difficulties raising investment for European projects. China accounted for 83pc of global battery production last year, according to the IEA, and subsidy-funded EV manufacturers CATL and BYD have continued to expand capacity this year (see graph). China has subsidised its EV industry to the tune of around $230bn between 2007 and 2023, including $45bn last year, according to a study by the Centre for Strategic and International Studies (CSIS). "This scares off the capital from the [European] battery market. It takes a full reassessment of the industry, which takes a long time. Capital is not cheap and rate cuts are only coming in now, so it will be a while," another market participant said. China's battery dominance continues to hamper Europe "This narrative is bigger than Northvolt – Asian manufacturers generally and Chinese manufacturers specifically are in the lead, very clearly", said Jeffrey Chamberlain, chief executive of US-based venture fund Volta Energy Technologies. "The idea that a start-up can catch up and manufacture cells, of equal or better quality at volume, might have been viable 10-15 years ago, but it is increasingly becoming incredibly challenging," Chamberlain said, arguing that western firms at all stages of the supply chain should sign joint ventures with China instead of engaging in direct competition, offering access to their markets with local manufacturing as well as "innovation for next-generation products". Despite recent setbacks, Northvolt has not revised its goal of building four large factories before the end of the decade in Sweden, Germany and Canada – remaining committed to a scale of ambition that is drawing concern from some industry participants. "The only way for success now is through strategic alliances, just look at InoBat and Gotion," said Ben Kilbey, former director at Britishvolt. "[It] feels like recent history repeating [itself]. Britishvolt was advised that it could make a battery factory in two global locations (UK and Canada) before it had made a single cell […] Now Northvolt is in a pickle and having to scale back its global, vertical integration, ambitions. And it's had around €15bn thrown at it," Kilbey added. Chinese companies have outlined lithium-ion battery manufacturing capacity for next year that far exceeds expected demand (see graph), which may further weigh on prices for component materials, squeezing the margins of any manufacturers of these materials outside China such as Northvolt. By Chris Welch Global EV battery installations, by supplier GWh Announced lithium-ion battery manufacturing capacity and demand in 2025 GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Overprotectionism harmful for EU stainless: Marcegaglia


24/09/20
24/09/20

Overprotectionism harmful for EU stainless: Marcegaglia

London, 20 September (Argus) — Trade barriers and a focus on protectionist measures alone will not save Europe's increasingly uncompetitive stainless steel industry and have the potential to accelerate deindustrialisation, according to major Italian steelmaker Macegaglia chief executive Antonio Marcegaglia. Speaking on the sidelines of the International Stainless and Special Steel Conference held in Rome this week, Marcegaglia said that an overdose of such measures threatens to reduce long-term demand while incentivising the import of steel-containing finished goods. "While trade measures for correcting unfair international competition are welcomed, this is not beneficial if you think about the whole value chain," he said. "We have seen that despite high duties and safeguards, competition from imports has only increased." Europe's stainless steel sector is under heavy pressure from decreasing demand and growing costs. EU sales of stainless steel producers declined by 26.7pc year on year in 2023 to €16.44bn, with 2024 sales due to decline by a further 18pc to €13.44bn, according to Marcegaglia data. Delegates surveyed by Argus at the conference agreed the industry is severely struggling, with 2024 revenues likely to be below the pre-Covid year of 2019. On the costs side, Marcegaglia said that while Europe already has the challenge of higher energy, labour, transport and capital costs relative to Asia, more recent hikes to key raw material costs have effectively made it uncompetitive on all fronts. The availability of stainless steel scrap is getting tighter in the EU despite the fall in steel production, which together with high ferro-alloy prices has increased volatility for producers. A rising trend of upstream integration among Asian producers has increased their ability to control the costs of their key input, nickel pig iron, causing European scrap to become expensive relative to Asian NPI. Battling an unfavourable cost structure and lower scrap availability, European producers moved to start importing NPI in large volumes this year, despite its environmentally unfriendly nature relative to scrap. Europe's NPI imports from Indonesia equated to 10,000t of nickel metal content in January-July, moving up from zero in 2023, according to Red Door Research managing director Jim Lennon. "The reason for NPI inflows [into Europe] was the differential between the stainless scrap price and NPI," Lennon said at the conference. "NPI was cheaper than stainless steel scrap and so it was a big incentive to bring NPI into the supply chain." Marcegaglia said decarbonisation is a challenge for the European industry given the region is now wholly cost uncompetitive, and suggested the industry agree on green premiums to share CO2 related costs. "Given Europe's already high scrap utilisation, efforts for further improvements are complex and costly," he said. "The steel industry has to balance between environmental and economic sustainability." Delegates at the conference agreed decarbonisation will have to take a back seat as the European industry as a whole focuses on survival. "As far as 2030 net-zero goals are concerned, you can forget about them," industry equipment supplier Alfa Laval Technologies global sourcing manager and supplier development manager Marcus Lindholm said. Marcegaglia said that a possible pathway to recovery for the beleaguered industry is through the pursuit of supply chain co-operation, as current fierce competition between EU players is compounding its profitability problems. The group is strategically looking at further opportunities for upstream integration to stabilise its supply chains and improve its carbon footprint, while enlarging its product range to include both flat and long products. Earlier this week, it announced a £50mn ($66mn) investment to build a new electric arc furnace at its existing plant in Sheffield, in the northeast UK, which will increase the mill's stainless steel products output to over 500,000 t/yr. It is further committed to investment at its Oldbury, UK, tube plant, while also working towards expanding its product range from its Fagersta rolling mill in Sweden. By Raghav Jain Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Malawi Kanyika Nb mine development granted extension


24/09/20
24/09/20

Malawi Kanyika Nb mine development granted extension

London, 20 September (Argus) — Australia-based Globe Metals and Mining has been granted an additional year to begin mining at its Kanyika niobium project in central Malawi. The extension to 27 September 2025 was requested because of delays in finalising a mine development agreement with the government. Kanyika, which will be Africa's first niobium mine, will produce niobium and tantalum oxides for export to western markets, Globe said. The mine will be developed in two phases, with phase 1 scheduled for the start of 2026 and phase 2 for third-quarter 2028. The mine is expected to produce around 3,250 t/yr of niobium and 140 t/yr of tantalum over a 25-year lifespan, which could potentially be extended. Niobium is critical to military, aerospace, space and medical industries, and is becoming increasingly important in quantum electronics, in the manufacture of semiconductors and in the electric vehicle sector, Globe said. By Roxana Lazar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India's Smiore to boost Mn capacity in Karnataka


24/09/20
24/09/20

India's Smiore to boost Mn capacity in Karnataka

Mumbai, 20 September (Argus) — India's Sandur Manganese and Iron Ore (Smiore) has received approval from the environment ministry to increase its manganese ore capacity in Bellary, Karnataka state. After securing approval from the Karnataka State Pollution Control Board (KSPCB) under the Air and Water Act, Smiore plans to raise its manganese ore production capacity from 430,000 t/yr to 550,000 t/yr. This will pave the way for higher ferro-manganese and silico-manganese production in the near future. But the company did not provide a timeframe for the project. Argus assessed that prices for 60pc grade silico-manganese stood at 66,000-67,000 rupees/t, while prices for 70pc grade ferro-manganese were around Rs69,000-71,000/t ex-works on 19 September. The demand for alloy from domestic steel mills remains limited because of lower buying interest in steel products. The company operates two mines with estimated reserves of about 17mn t of manganese ore and 117mn t of iron ore. Smiore sold about 9,396t of ferro-alloy in the April-June quarter, up by 35pc from a year earlier. By Deepika Singh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US earmarks $3bn to boost battery supply chain


24/09/20
24/09/20

US earmarks $3bn to boost battery supply chain

Houston, 20 September (Argus) — The US Department of Energy (DOE) has selected 25 projects across 14 states to potentially receive more than $3bn to build out domestic supply of batteries, their components and critical materials including lithium, manganese and graphite. The proposed recipients will "retrofit, expand and build" manufacturing and recycling facilities across the US, targeting different stages of the battery production supply chain, the DOE said on Thursday. Projects include those for advancing direct lithium extraction (DLE) technology, producing cathode active material (CAM) and developing components for battery separators. More than $1bn is planned for five projects, with Standard Lithium and Equinor's SWA Lithium joint venture and TerraVolta Resources each possibly getting $225mn for their DLE undertakings. Cirba Solutions and Group14 Technologies were next with $200mn for the former's lithium-ion battery recycling centre and the latter's silane manufacturing plant, while EnergySys Advanced Systems could receive $199mn for its site, where it intends to produce battery cells. The funding, which will be administered by the Office of Manufacturing and Energy Supply Chains (MESC), is being made available under the Bipartisan Infrastructure Law. Final award totals are contingent on negotiations between applicants and the DOE, along with environmental reviews of each proposed project. The DOE already dispersed more than $1.8bn for 14 projects in October 2022 during the first round of awards funding under the MESC's battery materials processing and battery manufacturing and recycling programmes. By Alex Nicoll List of selected projects Company name Project location Proposed funding amount Targeted output Proposed production capacity SWA Lithium LLC Lewisville, AR $225,000,000 Lithium carbonate 45,000t TerraVolta Resources Texarkana region $225,000,000 Lithium carbonate 25,000t Cirba Solutions Columbia, SC $200,000,000 Metal salts from recycled batteries 60,000t of batteries Group14 Technologies Moses Lake, WA $200,000,000 Silane gas N/A EnerSys Advanced Systems Piedmont, SC $198,679,760 Lithium-ion battery cells 5 GW/h South32 Hermosa Patagonia, AZ $166,175,802 Manganese sulfate monohydrate 185,000t Element 25 (Louisiana) Baton Rouge, LA $166,128,094 Manganese sulfate monohydrate 65,000t SKI US Orangeburg, SC $150,000,000 Synthetic graphite 25,000t Form Energy Weirton, WV $150,000,000 Iron-air batteries 20GWh Clarios Circular Solutions Florence, SC $150,000,000 CAM from recycled batteries 20,000t American Battery Technology South Carolina $150,000,000 Battery materials from recycled batteries 100,000t Revex Technologies Champion MI; Gwinn, MI $145,000,000 Nickel concentrate black mass from spent batteries 21,250t 16,000t Honeywell International Geismar, LA $126,586,497 Lithium bis(fluorosulfonyl)imide N/A Ascend Elements Hopkinsville, KY $125,000,000 Recycled graphite N/A Urbix Muscle Shoals, AL $124,638,300 Coated spherical purified graphite 10,000t DOW Chemical US Gulf Coast $100,000,000 Carbonate solvents N/A Forge Battery Morrisville, NC $100,000,000 Lithium-ion battery cells 3GWh Mitra Future Technologies Muskegon, MI $100,000,000 Lithium-iron-phosphate (LFP) CAM 30,000t Albemarle US Charlotte, NC $67,075,044 Lithium metal anode material 50t NanoGraf Flint, MI $60,000,000 Silicon monoxide anode material 2,500t Li Industries Kettering, OH $55,243,798 LFP CAM 10,000t Blue Whale Materials Bartlesville, OK $55,232,669 Black mass from recycled batteries 50,000t Braskem America La Porte, TX $50,000,000 Ultra-high molecularweight polethylene N/A Cabot Van Buren Township, MI $50,000,000 Carbon nanotubes Conductive additive dispersions 1,000t 12,000t Solid Power Operating Thornton, Co $50,000,000 Sulfide-based solid electrolyte N/A — US Department of Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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