Viewpoint: Policy uncertainty dogs battery anode plans

Spanish Market: Battery materials, Metals, Petroleum coke
30/12/24

Former president Donald Trump's re-election is sparking uncertainty in the US' synthetic graphite battery sector, with companies worried about a possible halt to government finance and a weaker outlook for domestic demand.

"With Trump being elected president, everything's up in the air," one industry source said.

Battery materials companies expecting to receive government funding to build plants in the US could see their prospects dim with Trump coming into office, since these companies need the federal grants to compete with China, a second source said. Trump on the campaign trail said he would rescind all unspent funds in President Joe Biden's Inflation Reduction Act (IRA) and scrap Environmental Protection Agency tailpipe standards, which he called an electric vehicle (EV) "mandate".

The Biden administration is racing to try and secure projects set to be funded by the IRA. On 16 December, US battery materials producer Novonix received a conditional loan for up to $754mn for a new synthetic graphite plant from the US Department of Energy (DOE). If finalised, the loan would be used to build a new 31,500 t/yr synthetic graphite plant in Tennessee by the end of 2028. DOE previously awarded Novonix a $100mn grant and a $103mn tax credit to expand capacity at its Tennessee plant to 40,000 t/yr by 2025 and 150,000 t/yr by 2030. DOE on 16 December also closed on its up to $9.6bn loan to South Korean battery manufacturer SK On for the construction of three battery plants in the US, the largest loan ever awarded under its Advanced Technology Vehicles Manufacturing Program.

DOE also in September selected SKI US, part of India-based Birla Carbon, to receive $150mn build a 25,000 t/yr synthetic graphite production plant in South Carolina.

Some in Trump's orbit have warned they will review contracts they view as hastily pushed out before the former president takes office. But some Republicans are likely to oppose full repeal of the IRA, since the bill funds projects in their districts. And Republicans will hold a razor-thin majority in the House of Representatives.

Even if Republicans do not repeal the IRA or other EV subsidies like tax credits, the uncertainty surrounding the new administration's support could be a stumbling block.

"Who's going to put half a billion dollars into a battery plant right now when you don't have certainty on the push for EVs?" the first source said.

Battery projects require huge amounts of investment. Swedish battery maker Northvolt obtained record venture capital investment for a European start-up at $15bn. But on 21 November, the company filed for Chapter 11 bankruptcy protection in the US, in part because of difficulties "bridging financing between different stakeholders", outgoing chief executive Peter Carlsson said. The company had already closed down its R&D facility in the US and put plans for factories in Canada, Germany and Sweden on hold. Its financial woes intensified after the Swedish government declined to invest.

Other European governments have already reduced financial support for EVs, more for spending reasons than policy, which has softened demand in the region. France recently changed eligibility requirements for subsidies, and Germany ended its subsidy late last year.

Some companies, like Norwegian battery materials company Vianode, have been planning multi-billion dollar investment programmes to expand their reach in the automotive industry throughout North America and Europe. It is not clear if Trump's election will have an effect on these plans. Vianode opened its first anode graphite production plant, Via One, in Herøya, Norway, in October. The plant will have a capacity of 2,000 t/yr, enough to supply 30,000 EVs annually, according to Vianode.

Chinese firms have scaled up production of key battery materials at all stages of the supply chain, creating more competition for European and US producers. Chinese producers dominate the global EV market with about 70pc of market share, even as the EU and US have put policies in place to try to support their domestic industry.

China's lithium-ion battery exports to the US jumped in November as suppliers looked to get ahead of potential new tariffs. The Trump administration is likely to increase tariffs on Chinese lithium-ion batteries to as much as 60pc in the coming few months after Biden earlier this year lifted them to 25pc from 7.5pc. This could help support US-based battery plants. But tariffs on Chinese goods could also present additional challenges, as the raw materials for synthetic graphite often have some Chinese components.

Needle coke, traditionally the main raw material for synthetic graphite used in battery anodes, is not widely produced outside of China. And while companies in China have been researching options for using a wider range of petroleum coke qualities, specifications are still relatively narrow, with battery companies in China absorbing most of the world's suitable coke. One graphite anode plant in Europe has been struggling to procure petroleum coke, according to a market participant.

Sourcing coke for synthetic graphite in Europe and other ex-China locations is likely challenging, as most of these refineries and calciners have tied up their supply in long-term commitments, one producer said. Refineries are also reducing coke production, as the required feedstocks have become more costly.

By Lauren Masterson and Hadley Medlock

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02/01/25

Viewpoint: Gallium nitride to expand into auto industry

London, 2 January (Argus) — Gallium nitride (GaN) is already used in power devices for consumer electronics, but manufacturers are now developing the technology for use in the automotive sector, with the compound set to make its way into vehicles in the coming year. GaN semiconductors are currently used in consumer and industrial applications, including alternating current adapters and server power supply units. But use of GaN semiconductors in automotive applications is at an early stage — unlike silicon carbide (SiC) chips, which are increasingly being incorporated into electric vehicle (EV) power electronics. GaN has a similar crystalline structure to silicon but can deliver greater efficiency, faster switching speeds and higher thermal conductivity. Lower resistance, smaller form factors and the ability to operate at higher voltages mean GaN semiconductors consume less power than silicon semiconductors. Integrating GaN into silicon substrates rather than sapphire is opening up new uses for GaN in vehicle power devices and light detection and ranging (LiDAR). GaN is suitable for low and high-voltage applications for EVs, including on-board chargers (OBCs), power inverters and traction motors. US-based semiconductor firms Navitas Semiconductor and Texas Instruments (TI), and Chinese-owned Nexperia have been developing GaN chips for automotive for several years and are now moving quickly into higher voltages. Several manufacturers have now started producing devices and expect to gain traction over the next year. Navitas has been producing GaN devices since 2018 and expects to begin making the product for the automotive industry in 2025. Japan's ROHM Semiconductor in December partnered with the world's largest semiconductor company, Taiwan-based TSMC, to develop and produce GaN power devices for EVs. The companies will integrate ROHM's device development technology with TSMC's GaN-on-Si process technology and provide control integrated circuits to maximise performance. Israeli firm VisIC Technologies is developing GaN products for automotive and industrial uses. It announced plans in December to partner with Austrian automotive technology developer AVL to advance inverter technology for EVs. The firms aim to produce devices that offer higher performance and lower costs at both the device and system level, compared with SiC devices. VisIC's GaN-on-silicon power devices consume less energy during production and can be manufactured in 200mm and 300mm silicon foundries to scale up output. VisIC plans to work with AVL to expand the platform to include 800V power modules — the next generation of EV charging technology. China's Innoscience Technology is developing GaN-on-Si power products and recently launched two 100V automotive-grade devices optimised for LiDAR for advanced driver assistance and autonomous driving applications, as well as DC-DC converters and automotive audio applications. The company has started mass production and is fulfilling batch orders to meet demand. Several manufacturers and foundries are now building out capacity to accommodate commercial-scale output of GaN devices. US-based GlobalFoundries said in early December it has received $9.5mn in federal funding to continue adding new tools, equipment and prototyping capabilities at its Vermont facility, as it moves closer to full-scale manufacturing of its 200mm GaN-on-Si chips. And TI started producing GaN-based power semiconductors at its factory in Aizu, Japan, in October. As the site ramps up, TI's internal capacity will quadruple between its US and Japanese factories. The company has also piloted manufacturing 300mm wafers to increase volumes. Limitations in manufacturing have so far hampered the widespread adoption of GaN in EVs. Cost, supply-chain issues and concerns around thermal management and voltage spikes remain hurdles that manufacturers must overcome. The technology has yet to be proven for automotive applications, which have stringent standards for quality and safety. For this reason, manufacturers are starting with GaN in OBCs and converters to establish confidence. Companies such as Germany's Infineon and Swiss chipmaker STMicroelectronics anticipate there will be room for both SiC and GaN in the automotive sector, depending on the power, efficiency and cost requirements of the application. The availability of gallium compared with silicon may also become a factor as demand increases, given export restrictions out of primary supplier China. By Nicole Willing Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: Strong fundamentals to support Nb columbite

02/01/25

Viewpoint: Strong fundamentals to support Nb columbite

London, 2 January (Argus) — Increased demand from the aerospace and defence industries, alongside reduced supply from Brazil, has underpinned a steady increase in niobium columbite prices over the past two years, although further rises could face resistance from smelters switching to ferro-niobium when columbite becomes too costly. Defence and aerospace demand supported prices across the niobium complex throughout last year and are set to continue driving demand this year, owing to continued geopolitical tensions across all regions. Total military spending globally rose to $2.4 trillion in 2023, up by about 6.8pc in real terms from 2022, data from the Stockholm International Peace Research Institute show. And figures for last year are expected to increase further as Russia's continued war in Ukraine spurred greater NATO spending, conflict escalated in the Middle East and the Red Sea, and China ramped up military drills around Taiwan. Niobium metal is used in a range of high-temperature alloys in aerospace and defence applications, thanks to its high strength at extreme temperatures. In September last year, the US Department of Defense awarded a $26.4mn grant to major tantalum and niobium producer Global Advanced Metals through the Defense Production Act programme to support the production of high-purity niobium oxides at the company's Pennsylvania plant. One key alloy to which niobium metal is crucial is C-103, used in hypersonic missiles, jet engine afterburners and satellite components. C-103 is made up of 89pc niobium, 10pc hafnium and 1pc titanium. Firm demand for niobium metal has been keenly felt by the columbite market — the raw material — in which prices averaged $18.20/lb cif main port from January-mid-December last year, compared with an overall average of $14.50/lb in the past five years. Columbite prices began to trend higher from late 2022 — before the sustained increase in defence and aerospace demand — bolstered instead by tightened supply. The election of Brazilian president Lula de Silva in October 2022 brought with it a government crackdown on artisanal mining on indigenous lands in the Amazon. While this crackdown has focused chiefly on illegal gold and zinc mining on indigenous lands, niobium columbite market participants have also noted tightened supply and higher prices from the region since the Lula government took office. Furthermore, conflict in the eastern part of the Democratic Republic of the Congo has decreased the supply of tantalite from key mining areas this year. Tantalite and columbite materially are similar, making tantalite a useful source of niobium concentrates to many Chinese smelters. But this lower supply has raised the prices of tantalite with higher niobium content, even while tantalum demand has been slow this year. Looking ahead, market participants expect columbite prices to remain firm throughout this year, supported by a continuation of the fundamentals of the past two years. But further price increases could face resistance from consumers, as smelters could switch to ferro-niobium to avoid higher columbite costs. In the past, smelters in China have made the switch to ferro-niobium when columbite prices climb above $18/lb, often causing increases beyond this level to be short-lived. By Sian Morris Columbite prices, 2022-24 $/lb Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: Trade war may upend US coke prospects

31/12/24

Viewpoint: Trade war may upend US coke prospects

Houston, 31 December (Argus) — A possible renewed and expanded global trade war in president-elect Donald Trump's second term could lead to retaliatory tariffs from the US' major petroleum coke export destinations, pressuring US Gulf coast coke prices and adjusting trade flows. Trump campaigned on plans to impose tariffs of up to 60pc on imports from China , reviving memories of his trade policies in 2018 and 2019 that chilled coke trade with the country. He has also threatened to add 25pc tariffs on imports from Canada and Mexico, and up to 20pc on imports from all other countries. It is far from certain Trump will follow through on all his tariff threats once he does take office, or that they will be as large as he has promised. But if he does, China could repeat its retaliatory response to the prior Trump tariffs. And if other countries join in on those retaliatory measures, US coke exporters could face even more challenging conditions than in the past. First term fight In June 2018, the Trump administration announced plans for a 25pc tariff on what was then $34bn/yr of Chinese imports. Later that month Beijing retaliated, announcing a punitive 25pc tariff on US exports of fuel and calcined coke, thermal and coking coal and many other products. Total tariffs on greater-than-3pc-sulphur green coke, the US' largest grade exported to China, ultimately reached 33pc. The dueling tariffs led to significant shifts in US Gulf high-sulphur coke markets. Green coke exports from the US Gulf coast to China dropped by nearly 60pc year over year in 2018 to 638,000t, according to Global Trade Tracker (GTT) data, as no US Gulf coke shipments loaded for China from July-October. US Gulf export volumes to China stayed nearly flat in 2019 before surging back to 1.8mn in 2020 after China began issuing exemptions for its green coke tariff . US Gulf high-sulphur coke prices also started to fall sharply late in the third quarter of 2018 after China's retaliatory tariff came into effect in late August , while Indian and Turkish demand also fell. The average price of US Gulf 6.5pc sulphur coke dropped significantly in 2019, down by $27/t year over year. US coke exports to other countries were also hurt during that time. Turkey imposed a tariff on US-origin coke imports in 2018 after Trump doubled tariffs on Turkish steel and aluminium imports. US Gulf coke exports to Turkey fell by almost 50pc in 2019 compared with the year prior. Although some analysts think it is unlikely China will retaliate to tariffs as aggressively as it did during the first Trump term, Beijing would likely still target select industries. Coke could be high on this list, as these tariffs are still officially in effect and the government could easily withdraw the exemptions it has issued since 2020. A wider battlefront Trump's threat to issue tariffs against other countries in his second term, including 25pc tariffs on imports from top US trading partners Mexico and Canada, could lead to even more challenges. Already, Canadian prime minister Justin Trudeau and Mexican president Claudia Sheinbaum have indicated that they could retaliate if the US goes through with Trump's plans. While Canada has only taken about 800,000 t/yr of US coke since 2021, Mexico has been a large consumer. The US' southern neighbor has been the fourth-largest offtaker of US Gulf coast coke so far this year. It was the largest in 2018 and 2021 and second-largest in 2019 and 2020, helping to absorb some of the lost demand from China, alongside India, Brazil, Turkey and Italy. India has typically been the biggest offtaker of US Gulf coke in recent years, and it has increased its share of US Gulf exports to 24pc in January-October of this year from 14pc in 2022. This step-up in US coke shipments to India followed a significant drop in China's higher-sulphur fuel coke demand over the past two years, especially since the government began signaling in late May that it would limit its consumption , as well as an increase in Indian cement makers' use of coke in their kilns . While India is likely to absorb even more US Gulf coke if Chinese demand declines further, India already took 20pc more of this coke in 2023 than it did in 2019. This suggests that new buyers may have to come into the market for the potential overhang in next year's US Gulf coast supplies to be worked down. This will only occur if US coke remains at a wide discount to coals from countries like South Africa, Australia and Indonesia in order to encourage more coal consumers to make the switch to coke. If a wider trade war results in India implementing tariffs on US coke, sellers might prefer to sell to other destinations, particularly in the Atlantic basin, rather than discounting coke deeply enough to draw more Indian demand. No help from Europe But while European countries like Italy, Spain, France and Greece were top importers of US Gulf coke in 2018 and 2019 when Chinese demand dropped, these countries are not as well-positioned to absorb more coke now. Cement makers in the region have invested in alternative fuels over the last few years as the EU Emissions Trading System has increased the price of carbon emissions, lowering their overall appetite for fossil fuels. The US exported 31pc less coke to Europe in 2023, at 4.4mn t, than it did in 2018, at 6.4mn t. By Hadley Medlock and Lauren Masterson Top USGC coke export destinations 2017-2020 mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Zinc prices to drop in 2025 on higher supply

30/12/24

Viewpoint: Zinc prices to drop in 2025 on higher supply

London, 30 December (Argus) — Zinc prices increased this year as supply was tight, but prices are expected to soften next year because of improved supply and continued weak demand in key consumption markets. Zinc has been one of the best performers of the London Metal Exchange base metals this year, trading above $3,000/t going into December compared with a $2,537/t average in January. This puts this year's average price 6pc higher than the 2023 average. The price strength seen this year can be attributed to supply pressures, including production disruptions at key mines. Global mining group Glencore's McArthur River mine in Australia halted operations in March owing to extreme rainfall, and Chinese mining company MMG's Dugald River mine in China was placed under care and maintenance during the third quarter. The zinc market had a 164,000t deficit in 2024, according to forecasts from the International Lead and Zinc Study Group (ILZSG), additionally driven by reduced mined output from Swedish metals producer Boliden's Tara mine in Ireland, and Portuguese mining company Almina's Aljustrel mines in Portugal. Higher supply forecast Supply is expected to increase in 2025, with ILZSG forecasting a surplus of 148,000t for the year, as new mine supply is scheduled to ramp up. One of the biggest supply-side developments is the reopening of Canadian mining firm Ivanhoe Mines' Kipushi mine in the Democratic Republic of Congo. Kipushi is expected to produce 278,000 t/yr of zinc over its first five years, and will become Africa's largest zinc mine and the fourth-largest globally, according to Ivanhoe. In Europe, higher output from Bosnia and Herzegovina and Portugal, and the reopening of the Tara operations in Ireland, will contribute to the overall increase in supply, according to ILZSG. Russia's production is also expected to rise, supported by the recently opened Ozerneoye plant . Australia, Canada, China, Japan, the Netherlands and Norway will also all see concentrate supply increases next year, particularly in the first quarter, with an expansion at Boliden's Odda smelter due to ramp up output early in the new year. Global mined supply has declined over the past three years, but trading firm Macquarie expects global mine supply to grow by 5.8pc in 2025. Total project approvals this year reached around 570,000 t/yr of zinc, Macquarie said in its 2025 global commodity outlook, published on 5 December. Persistent weak demand But demand growth may be insufficient to absorb this additional output, leading to oversupply in the coming years. Global carbon steel demand has fallen this year, as construction sector demand has generally been weak across most major economies, including China. Construction steel accounts for 55pc of zinc end demand, according to Macquarie. The Argus weekly ex-works northwest Europe assessment for hot-dipped galvanised steel — one of the main products that use zinc — has dropped by nearly 17pc from the start of the year to €665/t ($690/t) on 4 December, reflecting a struggling steel sector in Europe. European manufacturing activity also remains weak, with the automobile sector facing a number of factory closures because of subdued demand. German carmaker Volkswagen announced in late October that it plans to close at least three plants and lay off thousands of employees, as the firm attempts to save money amid falling sales because of an overall decrease in European car demand. And global automaker Stellantis plans to cut its inventories going into the new year. Macquarie predicts that global refined zinc demand will grow by 1.7pc in 2025, which is lower than the previously anticipated 2.5pc growth rate because of uncertainty surrounding potential new US tariffs following the inauguration of president-elect Donald Trump in January. The proposed tariffs could impact the strength of the US dollar and global trade. Zinc premiums in Europe decreased in 2024. The Argus Rotterdam SHG zinc premium dropped by nearly 30pc throughout the year, reflecting weaker consumption from downstream industries, particularly construction and manufacturing. Ongoing uncertainty over global economic conditions, high energy costs and new supply in Europe will likely play a role in keeping premiums subdued. Price outlook 2025 Given the anticipated supply surplus and the ongoing demand lag, analysts are generally bearish on zinc prices in 2025. The 2024 zinc price currently averages at $2,800/t, but the World Bank and ratings agency Fitch both expect this to decline to $2,600/t in 2025, followed by a further drop to $2,500/t in 2026. Similarly, Macquarie forecasts the zinc price to drop to $2,650/t next year and to $2,450/t in 2026, reflecting expectations of a market surplus. By Roxana Lazar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Ti scrap’s rebound pinned on Boeing, melters

30/12/24

Viewpoint: Ti scrap’s rebound pinned on Boeing, melters

Houston, 30 December (Argus) — Domestic titanium scrap demand and, in turn, prices are expected to increase in the second half of 2025, supported by a recovery in aircraft build rates and expansions in titanium melters' capacity that have boosted sentiment across the supply chain following a disappointing year. Industry expectations of greater scrap requirements in 2024 — predicated on aerospace manufacturers increasing their build rates — failed to materialize after production missteps and supply chain bottlenecks forced Boeing to curb output of its main aircraft programs and Airbus to delay its ramp targets . US prices for aerospace-grade titanium scrap have tumbled this year compared with 2023 averages, with 6-4 turnings off by 25pc and 6-4 bulk weldable down by 13pc through mid-December from the same period the prior year. Titanium melters' efforts to control input costs have had a trickle-down effect across the scrap supply chain, compelling processors and dealers to reduce their bids also to protect margins. Scrap suppliers foresee stronger consumption signals for 2025, pointing to the return of Boeing's 737 MAX production following a seven-week strike and the gradual decline of scrap inventories that have remained elevated relative to demand. Dealer and processors also are looking forward to the return of normalized build rates for Boeing's 787 Dreamliner, its main wide-body model that contains about 15pc titanium compared with around 6pc for the 737. Production of the 787 has been hampered this year because of parts shortages , which the airframer expects to stamp out before year end. Still, those outlooks may be upended depending on whether US president-elect Donald Trump follows through with his plans to impose sweeping tariffs on all imports into the US, and sources told Argus that any recovery likely will not take place until the summer at the earliest, cautioning that it would take months before the scrap industry would benefit from the comeback in aircraft manufacturing. Feeding new furnaces Market participants are banking on additional ingot production capacity that is scheduled to come on line in 2025 to fuel demand for aerospace-grade scrap, saying titanium melters will want to keep their new furnaces running hot. ATI expects to finish product qualifications related to its expansion at its Richland, Washington, operations next year, which should boost its melting capacity by 35pc over 2022 levels. Titanium Metals (TIMET) this summer plans to commission its new plant in Ravenswood, West Virginia, which is expected to turn out 33mn lbs of ingot annually in the project's first phase. Still, lengthy product qualifications may push out any benefit for the scrap supply chain to 2026. Perryman currently is ramping up after expanding its facility in Coal Center, Pennsylvania, that should grow the company's melting capacity by 16mn lbs to 42mn lbs annually. All those additions could lead to a run-up in scrap prices because of greater competition by melters for the same units, while longer lead times to get milled titanium products into machine shops creates a lag effect that leaves downstream generation largely unchanged. Trump-induced uncertainty A major source of uncertainty for next year centers around Trump's tariff policies, which have caused concern in the market. Trump campaigned on vows to levy 60pc duties on shipments from China, and more recently pledged 25pc duties on shipments from Mexico and Canada, and a 20pc duty on all other imports. If those come to fruition, it would increase costs for imports of titanium scrap — currently freely traded for all countries except China. But the tariff threats could also be Trump's way of generating negotiating leverage for his aims. "A duty on scrap from Europe and Japan would be a disaster for the industry," one source said. US titanium scrap imports reached 23,578 metric tonnes (t) through January-October, eclipsing the 22,453t sent in the same period in 2023 — a four-year high — and nearing pre-pandemic levels. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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