Metal/Steel/EV battery Updates (24 Jan): Metal prices increase on potential sanction on Russia.
Iron ore/Coking coal/Steel
- Asian iron ore prices increased w-o-w on procurement activities after China policy makers pledged to stabilize stock market. Asian iron ore prices inclined by 2.2% d-o-d and w-o-w to US$132.4/tonne on 23 Jan due to on procurement activities after China policy makers to pledged to stabilize stock market. Link to the article: https://pmc.spglobal.com/Article.aspx?id=694b9938-efe5-4793-9d29-77219a8b7eab&nl=SBB%20Steel%20Markets%20Daily&nl2=Archive%20News https://www.mining.com/web/iron-ore-climbs-to-over-one-week-high-as-china-pledges-to-stabilize-market/
- Asia met coal FOB Australia prices fell while CFR China prices inclined w-o-w. Seaborne Asia met coal FOB Australia prices declined by 0.9% d-o-d and 3.3% w-o-w to US$326/tonne on 23 Jan due to weakened demand despite some supply constraints from Australia while CFR China prices increased 1.6% by w-o-w to US$325/tonne on 23 Jan on the back of recovering domestic market. Link to the article: https://pmc.spglobal.com/Article.aspx?id=9aead8b2-b5a7-4c0a-a14d-3cd8b38e4209&nl=SBB%20Steel%20Markets%20Daily&nl2=Archive%20News
Base Metals
- Aluminium surges on potential sanction on Russia. LME aluminium prices increased by 1.7% d-o-d to US$2,145/tonne on 23 Jan on worries over potential EU sanctions after Poland and Baltic states called for the EU to ban imports of Russian aluminium. Link to the article https://www.xm.com/research/markets/allNews/reuters/copper-strides-higher-on-hopes-for-more-stimulus-in-china-53745125
- Global copper market deficit grows m-o-m in Nov/ LME copper gains in China hopes. The global copper market deficit increased to 119k tonnes in Nov from 48k tonnes in Oct, according to ICSG. Meanwhile, LME copper increased by 0.4% d-o-d to US$8,284/tonne on 23 Jan on hopes that China will unleash more stimulus to boost its economy. Link to the article: https://www.nasdaq.com/articles/copper-market-in-119000-metric-tons-deficit-in-nov-2023-icsg
- Global nickel market expands its surplus m-o-m in Nov/Nickel price crash seen even as mines close, extending Indonesia’s grip on supply. The global nickel market surplus increased to 35.3k tonnes in Nov from 26k tonnes in Oct, according to INSG. A prolonged slump in nickel prices is stress-testing producers worldwide, raising the prospect of mine closures that will deepen Indonesia’s dominance of global supply. LME nickel price decreased by 1.8% ytd to US$16,010/tonne on 23 Jan amid a growing global glut, pressuring high-cost operations and posing risk on new projects outside Indonesia. BHP Group will be partly closing its processing plant in June as its mining supplier, Wyloo Metal, will be shutting down nickel mines in Australia by the end of May. The company is also reassessing its nickel operations which could lead to write-downs. Link to the article: https://www.mining.com/web/surging-exchange-stocks-pile-the-pressure-on-nickel/ https://www.mining.com/web/nickel-price-crash-seen-extending-indonesias-grip-on-supply/ https://www.mining.com/web/bhp-reports-2-fall-in-second-quarter-iron-ore-output/ https://www.mining.com/web/australian-tycoon-forrest-shuts-nickel-mines-after-prices-crash/
- Demand blues dominate zinc market mood. LME zinc prices dropped by 0.9% w-o-w to US$2,496/tonne on 23 Jan after hitting US$2,535/tonne on 15 Jan with Nystar’s suspension of Budel smelting operation until zinc demand picks up significantly rice rallies triggered by production cuts are unlikely to be sustained. Link to the article: https://www.reuters.com/markets/commodities/demand-blues-dominate-zinc-market-mood-2024-01-22/
EV Battery
- Korean battery makers eye Chile lithium investment to supply US. InvestChile, Chile’s foreign investment promotion body, has held meetings with representatives from multiple Korean companies such as POSCO Holdings, LG Chem, and SK On. The companies are interested in turning its vast reserves of semi-processed lithium in Chile into materials such as lithium iron phosphate for rechargeable batteries to supply the US market, according to the media. Link to the article: https://www.mining.com/web/korea-battery-makers-eye-chile-lithium-investments-to-supply-us/
- Bolivia Uyuni plant to yield first lithium by end of 2025. Bolivian state-owned lithium company, YLB, has inked a new deal with a Chinese CBC consortium, formed by CATL, Brunp, and CMOC at the Uyuni salt flat. This is to build a pilot plant with direct lithium extraction (DLE) technology with 2.5k tonnes p.a. of lithium carbonate by end of 2025. The deal is followed by their previous agreement on Jan 2023 to build two DLE plants (US1.4bn) with a combined capacity of 25k tonnes p.a. Link to the article: https://www.mining.com/bolivia-uyuni-plant-to-yield-first-lithium-by-2025-end/
ESG
- China’s Baosteel Zhanjiang starts 1m tonnes p.a. DRI plant in Guangdong. Baosteel Zhanjiang Iron & Steel has begun production of direct reduction iron (DRI) plant in Guangdong. The plant can produce 1m tonnes p.a. of DRI using natural gas, coke oven gas, and hydrogen via Energion Zero Reformer technology developed by Danieli and Tenova. Link to the article: https://pmc.spglobal.com/Article.aspx?id=64898c63-f1e7-47d4-ba01-8906a28d0b3b&nl=SBB%20Steel%20Markets%20Daily&nl2=Archive%20News
- H2 Green Steel raises US$5.2bn for a large-scale green steel plant. H2 Green Steel has raised EU4.75bn (US$5.2bn) to develop the world’s first large-scale green steel project in Sweden. The construction of a green steel plant with integrated green hydrogen (from renewable electricity) and green iron production has already begun, with production expected at the beginning of 2027 with 2.5m tonnes p.a. capacity. Its steel is expected to emit 95% less CO2 than steel produced with traditional blast furnace technology. New shareholders include the Microsoft Climate Innovation Fund and Siemens Financial Service. H2 Green Steel’s existing owners include Altor, GIC, Just Climate, Andra AP Fonden, Hy24 and Temasek. Link to the article: https://www.reuters.com/business/swedens-h2-green-steel-raises-52-bln-new-funding-2024-01-22/
Metal & Steel Prices (23 Jan):
* China HR spread = China HR sheet after VAT – cost of iron ore & coking coal
Source) Bloomberg Finance L.P., Platts, DBS Bank