ArcelorMittal increases steel coil offers by €40/t

Spanish Market: Metals
02/10/24

Europe's largest steelmaker ArcelorMittal has increased its hot-rolled coil (HRC) offer by €40/t to €590/t base in northwest Europe.

All offers below this level have been withdrawn and the company is "firm" on this level, buyers said. One service centre reported an offer around €605/t base, for a small tonnage. NLMK La Louviere has also increased its offer by around €25/t, according to sources.

The increases follow a sharp rise in China following the country's recent stimulus announcement, and firmer raw material costs — Argus' benchmark 62pc Fe ICX iron ore index hit $109.35/dmt on 1 October, up from $88.70/t on 23 September, while fob Australia premium low-volatile coking coal prices jumped by $18.80/t to $204.30/t.

Service centres have been trying to add additional tonnages to existing deals in recent days, according to mill sources, which they suggest is a signal buyers think the market has reached a floor. They also anticipate a technical rebound from the automotive sector in the first quarter of next year, after a weaker period of late.

Futures markets have also been reacting to the increases in China, and talk of higher EU offers. As off 11:23 London time (10:23 GMT), over 26,000t had traded on the CME Group's north European HRC contract, with two 10,000t January-February spreads trading at -€10/t, lessening the pronounced contango of recent days. A 4,000t October-December spread traded at -€65/t, with the outright prices at €565/t and €630/t.

By Colin Richardson

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03/10/24

Indonesia’s Ni expansion via HPAL could face challenges

Singapore, 3 October (Argus) — Indonesia is expected to continue expanding its nickel production in the coming years, especially through increasing its high-pressure acid-leaching (HPAL) capacity, but the lack of readily available sulphuric acid and proper management of the tailings waste could pose challenges to this plan. Production is expected to rise despite an anticipated surplus in the supply of nickel in the market. Sulphuric acid is used in the HPAL process to separate nickel and cobalt from nickel ore to produce mixed hydroxide precipitate (MHP), which is the feedstock for the downstream processing of nickel sulphate, cathode and battery. Indonesia is expected to produce 325,000-345,000t of MHP this year, up from around 269,000t of in 2023, according to market sources. But with several MHP projects planned to come online in the next few years, MHP output for the next three years is projected to treble to 800,000-900,000t, according to the country's deputy minister for the co-ordinating ministry for maritime and investment affairs Septian Hario Seto on 2 October at a metal event in London. As this would require a lot more nickel ore and sulphuric acid, there are concerns that the availability of limonite ore could deplete as fast as the saprolite ore supply, which is mainly used for nickel pig iron and matte production. There were also discussions that the Indonesian government will convene with nickel market participants to discuss about the supply situation of limonite ore. There are currently four HPAL facilities operating in Indonesia. This includes Huayou's Huayue and Huafei projects , GEM's QMB project and Lygend's HPAL project. Others were also concerned that the availability of sulphuric acid could be a limiting factor to Indonesia's rapid expansion of HPAL production, as sulphuric acid demand from Indonesian HPAL projects is expected to reach 7.12mn t in 2025, almost 40pc increase from this year's demand at 5.17mn t, according to Argus estimates. Indonesia has been importing sulphuric acid from mainly China and South Korea to meet the growing demand for its production units at Obi Island and Sulawesi. But a ramp-up in sulphur-burning operations has pushed several MHP producers like Halmahera Persada Lygend to switch to buying lower-cost sulphur instead. For most sulphur burners, 1t of sulphur produces around 3t of sulphuric acid. The startup of Freeport McMoran's Manyar smelter in Java integrated industrial and port estate in East Java's Gresik, coupled with mining firm Amman Mineral Nusa Tenggara's (AMNT) copper smelter in the West Sumbawa regency of Nusa Tenggara province, is also expected to alleviate some supply concerns, with the two expected to add at least 3mn t/yr of acid capacity by the end of 2025. Proper disposal of tailings waste could pose another challenge to Indonesia's planned HPAL expansion, particularly with increasing scrutiny on the environmental, social and governance (ESG) standards by Indonesia's mining industry. The HPAL process generates a large volume of tailings, with energy consultancy Wood Mackenzie estimating an output of 1.4-1.6t of waste from every 1t of nickel produced through HPAL. There are three common ways to dispose tailings waste – tailings dam, deep sea tailings and dry stacking. Dry stacking is more widely used because it is considered as the more sustainable option. But dry stacking also comes with its own environmental and biodiversity risks, as Indonesia's seasonal wet weather and seismic activity of the site could be a problem for waste storage. To ensure a smooth expansion in HPAL production, it is crucial for Indonesia to find ways to secure the necessary sulphuric acid supplies and to adopt appropriate methods for tailings waste disposal. By Sheih Li Wong and Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US factory activity contracts for 6th month: ISM

01/10/24

US factory activity contracts for 6th month: ISM

Houston, 1 October (Argus) — US manufacturing activity remained in contraction in September for a sixth consecutive month, as a measure of prices shrank for the first time this year and new orders and production weakened, but at diminishing rates. The manufacturing purchasing managers index (PMI) registered 47.2 in September, matching August's reading, the Institute for Supply Management (ISM) said today. The PMI reading, below the 50 threshold signaling contraction, marked a 22nd month of contraction out of the last 23 months. Manufacturing accounts for about 10pc of the US economy, and the largest part of the economy — services — has expanded in six of the last eight months through August this year. ISM's services PMI report will be released Wednesday. "Demand remains subdued, as companies showed an unwillingness to invest in capital and inventory due to federal monetary policy … and election uncertainty," ISM said. "Production execution stabilized in September. Suppliers continue to have capacity, with lead times improving and shortages reappearing." The Federal Reserve on 18 September cut its target lending rate by a half point, its first cut since 2020, and signaled another 150 basis points of cuts were likely through 2025, as it has succeeded in bringing inflation close to its 2pc target. A key employment report on Friday will factor into the Fed's thinking, with little more than a month to go before the 5 November presidential election. The new orders index rose to 46.1 in September from 44.6 in August, reflecting a diminishing rate of contraction. Production rose to 49.8, still contracting but approaching expansion territory, from 44.8 the prior month. Employment fell to 43.9 in September from 46 the prior month, reflecting a more rapidly weakening labor market. New export orders fell to 45.3 in September, showing deepening contraction, from 48.6, and imports fell to 48.3 from 49.6. Prices fell to 48.3 from 54. Inventories fell to 43.9, returning to pre-August low levels, from 50.3, while customers' inventory levels rose by 1.6 points to 50 in September, suggesting a "demand level that is neutral to negative for future new orders and production," ISM said. The prices index registered 48.3, down from 54 the prior month, indicating raw material prices fell last month after eight straight months of increases. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK TRA gets approval on split HRC import quota proposal

01/10/24

UK TRA gets approval on split HRC import quota proposal

London, 1 October (Argus) — The UK Trade Remedies Authority (TRA) on 30 September received government approval of its recommendation to split and increase hot rolled coil (HRC) import quotas, but has been requested to reassess its proposal to temporarily suspend the quotas. The UKA TRA on 30 September made a separate recommendation to suspend the quota for nine months, in light of Tata Steel UK's closure of its blast furnaces and increased imports of HRC. It started its review of this in February 2024 at the request of Tata and steel importer Kromat. But following the government's approval of its recommendation to split the HRC import quotas , the TRA should reassess its recommendation to suspend the quotas, the secretary of state for business and trade, Jonathan Reynolds, said on 30 September. "I would like the TRA to analyse whether, following implementation of the TRQ review solution, the temporary change in market conditions still persists", he said, adding the reassessment should be completed by 31 December 2024. The government's acceptance of the recommendation to split HRC quotas means that from 1 October there will be a 1A quota and 1B quota in place, and the latter can only be used for companies completing downstream processing. The 1A quota for October-December will be 249,391t, and is divided on a country-by-country basis, with the EU getting the largest chunk of the quota at 187,484t. The quota for other countries will be 23,587t. The 1A quota totals 1mn t/yr. The 1B quota will be 578,587t for October-December, and can be sourced globally with a 40pc individual country cap, after which a 25pc duty would be payable. The 1B quota is 2.36mn t/yr, higher than the 1.9mn t/yr recommended by the TRA. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Some eastern US rail shipments restart after Helene

30/09/24

Some eastern US rail shipments restart after Helene

Washington, 30 September (Argus) — Some railroad operations in the southeastern US have resumed in the aftermath of Hurricane Helene, but major carriers warn that some freight may be delayed while storm-damaged tracks are repaired. Rail lines in multiple states were damaged after Hurricane Helene made landfall on the northeastern Florida coast on 26 September as a category 4 storm and traveled northwards as a downgraded but still dangerous storm into Georgia, Tennessee, and the Carolinas. The storm left significant rain and wind damage in its wake, including washed-away roads, flooded lines, downed trees and power outages. Eastern railroads CSX and Norfolk Southern (NS) said they are working around the clock to restore service to their networks. Norfolk Southern said it had made "significant progress" towards its recovery with most major routes back in service including its Chattanooga, Tennessee, to Jacksonville, Florida, line as well as its Birmingham, Alabama, to Charlotte, North Carolina route. Norfolk Southern said freight moving through areas that are out of service could "see delays of 72 hours". Several of Norfolk Southern's other routes remain out of service, including rail lines east and west of Asheville, North Carolina, because of historic levels of flooding. There are multiple trees to remove along a 70-mile stretch from Macon, Georgia, to Brunswick, Georgia. And downed power lines are keeping the railroad's lines from Augusta, Georgia, to Columbia, South Carolina, and Millen, Georgia, out of service. CSX said "potential delays remain" but did not provide specifics. However, the railroad said it had made "substantial progress" in clearing and repairing its network. The railroad's operations in Florida have mostly reopened, as have rail lines in its Charleston subdivision, which crosses South Carolina and Georgia. But bridge damage and major flooding has kept CSX's Blue Ridge subdivision out of service. A portion of the line running from Erwin, Tennessee, to Spartanburg, South Carolina, has been cleared, but CSX said "a long-term outage" is expected for other parts of the rail line. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Ge buyers seek new supply, alternatives as demand rises

30/09/24

Ge buyers seek new supply, alternatives as demand rises

London, 30 September (Argus) — Germanium consumers around the world are looking for alternatives while producers aim to lift output, as demand increases while restrictions on exports from China reduce availability. Prices for 99.999pc germanium metal exported from China have soared to $2,580-2,680/kg fob from $1,450-1,550/kg at the start of June and $1,110-1,210/kg at the start of 2023, according to Ar gus assessments. The upper end of the range in Europe tipped past $3,000/kg cif at the start of September and remains there. Germanium dioxide prices have similarly climbed. Demand for germanium for defence and advanced computing applications is growing. The adoption of artificial intelligence (AI) in a range of industries is driving strong demand for silicon-germanium owing to the compound's ability to operate at higher frequencies and lower power. That makes it well suited to the higher performance and efficiency that AI requires, according to Israeli firm Tower Semiconductor. Tower expects the utilisation rate of its Fab 3 facility to hit full capacity in the third quarter, up from 55pc in the second quarter in response. Beyond AI and data communications, automotive manufacturers are exploring the use of silicon photonics in light detection and ranging (LiDAR), the company said. As advanced driver-assistance systems (ADAS) become standard and autonomous vehicles are rolled out, consumption of germanium in infrared optics for thermal imaging cameras and night vision devices is increasing. But consumers are concerned about security of supply. The US increased its imports of germanium metal and dioxide in 2023 by around 20pc year on year to 38t, according to the US Geological Survey. Exports from China, the world's largest germanium producer and exporter, dropped sharply after the government introduced export controls in August 2023. Given the use of germanium in optical components, power devices and sensors, the US Department of Defense (DoD) is working with suppliers to ensure it has sustainable access. The Defense Logistics Agency has a partnership with LightPath Technologies to replace germanium in certain DoD applications. LightPath is working to reduce the amount of optics it produces from germanium, to reduce the risk of supply chain disruption and help customers convert their systems to use optics made from its Black Diamond chalcogenide materials, the company's president and chief executive, Sam Rubin, said in its second-quarter earnings call. LightPath's infrared component sales fell by $1.7mn, or 36pc, primarily after its largest customer did not renew a large annual contract for germanium-based products. The company last week announced a $500,000 initial production order for thermal imaging assemblies using Black Diamond from a new tier-1 defence customer. But for other products, the DoD is working to support an increase in its germanium consumption. It is investing in Canadian semiconductor materials firm 5N Plus to expand its capacity to produce space-qualified germanium wafers used in solar cells for defence and commercial satellites. It has awarded the company $14.4mn via the Defense Production Act Investment programme to upgrade and expand the production facilities and tools at 5N's facility in St George, Utah. The four-year project will work to improve germanium sourcing, recovery and refining, the DoD said, and supports product diversification to ensure the long-term viability of the business. It also aims to address process integration to meet solar cell producers' changing germanium substrate requirements. Germanium producers are looking to capitalise on the rise in demand by increasing output, as the higher prices make refining the metal more profitable. Mining exploration companies such as Anson Resources and EV Resources in Australia and Cantex Mine Development in Canada are pursuing projects with germanium content for potential production. But the fastest way to do so is by processing tailings to extract germanium. For instance, Hong Kong Sinomine Rare Metals, which has acquired the Tsumeb copper smelter and polymetallic tailings pile in Namibia, recently estimated that the tailings contain 746.21t of germanium metal. The company plans to add a germanium-zinc smelting production line to the copper smelting line, to commercialise output "as soon as possible". Earlier this year, Belgium's Umicore signed a long-term agreement with STL1, subsidiary of Democratic Republic of Congo state-owned mining firm Gecamines, to optimise germanium production at STL's processing facility commissioned in 2023 at the Big Hill tailings site in Lubumbashi. STL's germanium previously entered the market through third-party refiners outside the country. The company is looking to increase the value it generates from the metal by refining it domestically, while Umicore will diversify its sources of germanium supply with an offtake of "substantial volumes" for its downstream optical and electronic products. Umicore expects to refine the first test volumes of concentrates in the fourth quarter, and help analyse the germanium content in the tailings to further develop downstream products. A continued rise in prices could see further refining and recycling capacity come on line, unless substitution in germanium's various growing applications becomes more widespread. By Nicole Willing Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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