EV battery market to recover from 2H 2024: Samsung SDI

Spanish Market: Battery materials, Metals
01/02/24

South Korean battery firm Samsung SDI expects the electric vehicle (EV) battery market to gradually recover from the second half of 2024 after weak sales and operating profits in October-December.

Samsung SDI's fourth-quarter battery revenue fell by 6.4pc both from a quarter and a year earlier to around 5 trillion won ($3.8bn). Its battery segment's operating profit tumbled by 45pc on the quarter and 37pc on the year to W226bn. Battery sales for EVs were supported because of a sustained expansion, while energy storage system (ESS) battery sales fell owing to declining utility sales, said the firm. Sharp falls in operating profit were because of the "tentative profitability effect by raw materials price decrease".

Its total revenue in 2023 came in 13pc higher at W22.7 trillion, with battery segment revenue 16pc higher at W20.4 trillion. But operating profit was down by 9.7pc to around W1.6 trillion.

Fellow battery maker LG Energy Solution (LGES) similarly booked lower sales of W8 trillion in October-December, down by 6.3pc on the year and 2.7pc on the quarter. Declining prices of battery metals and EV makers' conservative inventory management dragged down sales, said LGES' parent company LG Chem. Operating profit rose by 43pc on the year to W338bn, but fell by more than 50pc on the quarter.

An environment of prolonged elevated interest rates and global recession is expected to weigh on the EV battery market this year, estimated to be a $185bn market in 2024, said Samsung SDI in its latest quarterly activities report. But a gradual recovery will likely kick in during the second half of the year, when benefits from lower interest rates start being realised. The EV battery market will still dwarf the ESS market, estimated at $26bn this year, with the latter propped up by continued growth from the North America, EU and China markets alongside new demand from South Korea and South America.

The US Federal Reserve kept its target interest rate unchanged at 5.25-5.5pc this week, a 23-year high, and said a shift to rate cutting requires "greater confidence" that inflation is on a sustainable course of slowing. Chances of the Fed maintaining the current rate at the next meeting on 20 March is much larger at 64.5pc than an estimated 35.5pc of a rate cut, with 91.6pc chance of rate cuts happening at the subsequent meeting on 1 May, according to CME's FedWatch tool, which tracks Fed funds futures trading.

Bank of Korea (BoK) held its interest rates steady at 3.5pc in January for the eighth consecutive time, despite improving domestic economic growth, because of persistent high inflation and a shaky outlook. BoK's board on 11 January said it will maintain a restrictive policy stance for a sufficiently long period of time until it is confident of inflation converging to the target level.

By Joseph Ho

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01/04/25

Mexican peso weakness may partially offset US tariffs

Mexico City, 1 April (Argus) — Volatility in the peso/dollar exchange rate may help to partially offset any tariffs that US President Donald Trump decides to impose on imports from Mexico as the ensuing peso depreciation would make its exports more competitive, said analysts from US bank Barclays. President Trump will announce Wednesday his next decision related to the threat to impose a 25pc tariff against imports from its commercial partners Mexico and Canada. Trump has delayed the decision twice, and it is likely that he will do so again, given the serious repercussions the tariffs could cause to the US economy, said Latam chief economist at Barclays, Gabriel Casillas, during a webinar held Monday. The base scenario for Barclays is that Trump's administration will finally step back from imposing tariffs on Mexico and Canada and rather go for an early renegotiation of the (US Mexico Canada Free Trade Agreement (USMCA) this year, said Casillas. In this scenario, the Mexican peso would strengthen to between Ps19.5 to Ps19.00 to the greenback, he added. However, if Trump's administration decides to impose the 25pc tariffs on all Mexican imports as he has threatened to do, then the peso would weaken to Ps24/$1, said Erik Martinez, foreign exchange research Analyst at Barclays during the same webinar. "If tariffs were imposed, 25 percent on all imports, we think a good portion of this would be absorbed by the exchange rate," said Casillas. A weaker peso makes Mexican exports more competitive abroad. The Mexican peso on Tuesday was trading at around Ps20.30 to the dollar, and has weakened by 18.5pc in the past year from about Ps16.6 to the dollar a year ago. If President Claudia Sheinbaum's administration avoids the tariffs, the peso may strengthen to around Ps 19.00/$1 in upcoming days, said Martinez. If the tariffs are applied during a brief period or only for the automobile sector, the exchange rate could range between Ps21.00-22.00 per dollar, said Martinez. However, even without any tariff being applied, Mexico's economy is expected to grow only by around 0.7pc this year, less than the estimates made late in 2024 of around 1.4pc, due to the deceleration of the US economy, Mexico's main trading partner, said Casillas. The US economy is showing signs of slowing down, specially in the industrial sector, which will impact Mexico's growth for the year. Also, this uncertainty is directly affecting any upside expected from so-called nearshoring as companies would now lose interest in moving their manufacturing lines to Mexico if there is no clear benefit in using the USMCA to avoid tariffs, said Casillas. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US manufacturing contracts in March: ISM

01/04/25

US manufacturing contracts in March: ISM

Houston, 1 April (Argus) — Economic activity in the US manufacturing sector fell back into contraction in March after a brief expansion as businesses braced for US president Donald Trump's threatened tariffs on imports. The manufacturing purchasing managers' index fell to 49 in March, down from the 50.3 in February, the Institute for Supply Management reported Tuesday. That followed three months of expansion — above the breakeven threshold of 50 — following 26 months of contraction. The new orders index contracted for a second month in a row, falling to 45.2, down by 3.4 points from the prior month. Production fell to 48.3 from 50.7. New export orders fell to 49.6 in March from 51.4 the prior month. "Demand and production retreated and destaffing continued, as panelists' companies responded to demand confusion," ISM said. "Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery slowdowns and manufacturing inventory growth." The prices index surged to 69.4, up from 62.4 in February and the highest since mid-2022. Employment fell by 2.9 points to 47.6. The supplier delivery index fell by 1 point to 53.5, indicating ongoing slowing in deliveries and slowing demand. Trump plans to unveil sweeping "reciprocal" tariffs on major foreign trade partners on 2 April after previewing or announcing multiple tariff actions since taking office, including a 20pc tariff on all imports from China and a 25pc tax on all imported steel and aluminum that both took effect last month. Trump last month also announced a 25pc tariff on all imported cars, trucks and auto parts, scheduled to go into effect on 3 April. The measures, together with mass federal government layoffs and spending cuts, spooked US equity markets, which last month posted heavy losses. Comments focus on tariff confusion Comments from survey participants highlighted uncertainty over how Trump's tariff plans would effect operations and the economy. "Acute shortages continue to impact supply chain continuity," a transportation equipment executive said. "Chinese restrictions on critical minerals such as germanium have caused major shortages, resulting in all supply needed in 2025 already assumed — and, not surprisingly, significant price increases as a result." "Customers are pulling in orders due to anxiety about continued tariffs and pricing pressures," according to a computer and electronic products executive. "Business condition is deteriorating at a fast pace," a machinery executive commented. "Tariffs and economic uncertainty are making the current business environment challenging." "New order levels have increased and are better than expected," a fabricated metals executive said. "We suspect that our customers are trying to build inventory at current prices to get ahead of expected tariff and related cost increases." By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU publishes CO2 car standard tweak proposal

01/04/25

EU publishes CO2 car standard tweak proposal

Brussels, 1 April (Argus) — The European Commission has published the long-awaited proposal to give automobile manufacturers more flexibility in complying with the bloc's CO2 reduction targets for cars and passenger vehicles in 2025, 2026 and 2027. Those three years would be assessed jointly, rather than annually, averaging out fleet emission performance. EU climate commissioner Wopke Hoekstra said the additional compliance flexibility shows that the commission has "listened" but the EU is still maintaining its zero-emission targets [for new vehicles from 2035]. "Predictability in the sector is crucial for long-term investments," said Hoekstra. The commission urged the European Parliament and EU member states to reach agreement on the targeted amendment "without delay". German centre-right member Jens Gieseke said there is a "broad majority" in parliament to fast-track approval for May. He noted that the car industry faces over €15bn ($16bn) in penalties for non-compliance with the CO2 standards. A member of parliament's largest EPP group, Gieseke also called for the commission to go further towards technological neutrality. "We need different kinds of fuels, e-fuels, biofuels, every fuel which could help to reduce CO2 should be recognized," he added. This second step, withdrawing the phase-out of internal combustion engines (ICE) from 2035 onwards, Gieseke noted, should come in the last quarter of 2025. German Green MEP Michael Bloss disputed the figure of €15bn in potential fines put forward by automotive industry association ACEA. "Even in the worst-case scenario, the total fines for all car manufacturers would not exceed €1bn," said Bloss. "Car manufacturers have had enough time to adjust their production planning. Many have done so," Bloss said, pointing to Automaker Volvo. Under the current 2019 regulation, fines should be imposed on manufacturers for each year in 2025–2029 when they do not reach their specific fleet-wide target CO2 reductions, compared to 2021 values. But manufacturers have the option to form compliance pools with other firms. "European car manufacturers are already talking to Tesla or Chinese manufacturers about so-called pooling, which must be stopped quickly," said EPP climate and environment spokesman Peter Liese. "We want to maintain climate targets, but not make Elon Musk richer through European legislation," said Liese. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

ArcelorMittal raises NW EU HRC offer to €700/t

01/04/25

ArcelorMittal raises NW EU HRC offer to €700/t

London, 1 April (Argus) — European market leader ArcelorMittal has raised its hot-rolled coil (HRC) offer to €700/t base in the north. Its previous offer was €680/t base. The producer recently has seen an increase in enquiries and bookings, aided by the steel safeguard review. This trend has been most prevalent on HRC in the north, as well as cold-rolled and hot-dip galvanised across Europe. European mills have been in no rush to sell, with delivery performances under pressure from some as a result of low utilisation rates and issues at some producers causing backlogs. At the same time, mills expect import arrivals to fall in the coming months, although there could be some overhang this quota period, after the safeguard review and imposition of provisional anti-dumping duties on Egypt, Japan and Vietnam. In the futures market today, a fourth-quarter strip traded at €670/t, broadly in line with the settlement on 31 March. The physical market is largely quiet, as participants wait to see how much material clears today and what tariffs are announced by US president Donald Trump. North EU mill margins have nearly reached a year-long high in recent days, with the spread for NW EU HRC over blast furnace costs having reached €181/ on 31 March, the highest level since €189/t on 5 April. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU stainless safeguards, metal plan meet mixed reaction

31/03/25

EU stainless safeguards, metal plan meet mixed reaction

London, 31 March (Argus) — Europe's stainless steel industry has had a mixed reaction to the European Commission's safeguard steel review and its action plan to protect the bloc's metals industry, both announced on 11 March. Steelmakers have welcomed greater commitment from policy makers to support the sector, but are still concerned at a lack of concrete commitment to significant protectionist measures, while traders, service centres and scrap suppliers are worried the most radical proposals could severely damage their businesses. The European Commission's review of definitive safeguard measures on imports of certain steel products identified no new import pressure for stainless cold rolled sheets and strips, and left tariff rate quotas for the next 15 months virtually unchanged even as carryovers and unused quota access were removed. And the commission's European Steel and Metals Action Plan included proposals to curb imports of finished steel and exports of scrap alongside the extension of the Carbon Border Adjustment Mechanism (CBAM) to potentially include raw material exports and downstream products. European stainless steel flat producers — battling weak medium-term demand and a high cost structure — expressed disappointment on the absence of protectionism in the safeguard review through to July 2026, but told Argus they were encouraged by proposals in the Action Plan that acknowledge the need to to curb imports for domestic industry's long term health. "The industry remains threatened by global excess capacities and by global distortions from China and other countries that artificially support their domestic industries or circumvent the current measures," Finnish producer Outokumpu told Argus . "These challenges need to be mitigated with more assertive solutions, including replacing current safeguards with more effective measures from July 2026." European trading groups surveyed by Argus welcomed the stability offered by the unchanged import quotas as the industry navigates other pressures — such as high energy prices and US tariffs — but said they expect lobbying by producers to drive a wave of new measures in the fourth quarter of this year, with stainless steel-specific safeguards likely to be implemented from next year. "Current quotas will only last this year, if you ask me," a trader said. "We expect new regulation to be announced in September/October." A key area of focus for the industry is the possible introduction of the melt-and-pour clause, which determines the origin of goods by the location at which the metal is originally melted, and disregards third countries where further processing may take place for circumvention of anti-dumping duties. The EU stopped short of immediately implementing this clause as part of the Action Plan, and will conduct further assessment of the action. But market participants expect [consultation](https://direct.argusmedia.com/newsandanalysis/article/2670486] on the policy will start after the current safeguard period ends. Several large European stainless steel producers are heard to be importing slab from Asia, and traders told Argus they were relieved that melt and pour is not coming into play this year. A Spanish trader said the clause will level the playing field for European producers, but a hasty implementation this year would have simply added to costs for both producers and consumers in the near term. Outokumpu said it welcomes the melt-and-pour proposals as part of a wider anti-circumvention drive that it said is required in Europe. The EU's Action Plan also calls for the need to address carbon leakage of exported steel through a potential extension of the CBAM to include exports. Trading groups told Argus this will be difficult to implement across the spectrum of trading partners, and may render exports uncompetitive to the detriment of European service centre groups. Outokumpu called upon the need to leverage the EU's competitive advantage by including Scope 2 emissions within any CBAM regulation for downstream products. "It is critical to prevent European steel producers from being placed at a disadvantage from imports with higher emissions from energy usage," the group said. "Outokumpu uses low-carbon energy across its operations with a high-recycling rate, so a fair benchmark definition is necessary to ensure that our low-emission production receives the competitive advantage it deserves." The EU's action plan also proposes the potential introduction of export duties for all steel scrap in order to limit scrap leakage from the bloc. Stainless steel scrap traders surveyed by Argus said there was no chance such a move would ever be implemented as Europe simply cannot consume all the scrap it produces, and that recyclers use exports to keep prices at a level that encourages further investment. "We would drown in scrap if exports fell," a trader said. "Prices would decrease sharply and work like a subsidiary for an antique industry. High-end recycling plants need high prices to process complex materials which would end up in landfill otherwise. No investments would be made if prices are pushed into the ground." Trade bodies BIR and EuRIC suggested a more rational move could be to introduce mandatory recycled content targets for metals products that incentivises domestic demand and usage for scrap, while also allowing scrap to move freely to export markets. By Raghav Jain Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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