Higher nickel prices raise superalloy costs in July

: Metals
20/08/04

The cost of nickel-based superalloys for the aerospace industry climbed last month on rising nickel prices, but reduced superalloy demand could limit end-user exposure to the price increase.

Argus estimates that the total intrinsic value of Inconel 718 alloy, with 52pc nickel, 19pc chromium, 5pc niobium and 3pc molybdenum, rose to $5.8355/lb on 30 July, up from $5.5996/lb at the start of the month. This increase was underpinned by the value of nickel in this alloy moving up to $6.376/lb by the end of July from $5.927/lb on 1 July, with prices for molybdenum, chromium and niobium all remaining broadly flat over the period.

Overall, the official three-month LME nickel contract surged to a six-month high of $13,806/t on 31 July, its highest since $13,840/t on 21 January, as prices realigned more closely with fundamentals and cost curves, following a sharp knock in March as Covid-19 ripped across industry globally. The nickel market is also being bolstered by expectations of growing longer-term demand from battery manufacturers.

This rise in costs for nickel-based superalloys may discourage buyers in the aerospace and oil and gas industries, which have been hit hard by the pandemic. But the impact may be diminished as low consumption rates encourage consumers to rely on their existing inventories rather than buy top ups in the spot market.

Nickel-based alloys used in the aerospace industry are corrosion resistant and high creep-rupture strength alloy that can withstand temperatures as high as 700°C. In the battery sector, nickel is a key component in lithium-ion, nickel-cobalt-aluminium (NCA) and nickel-cobalt-manganese (NCM) batteries, offering greater energy density and increased storage capacity.

Cr drops to 14-year low, Co edges up

Chromium prices in Europe and the US plummeted last month to their lowest since mid-2006, as the aerospace sector's malaise continued to permeate the high-temperature materials space.

Argus-assessed prices for min 99pc aluminothermic chromium reached $5,800-6,000/t dp Rotterdam on 7 July, their lowest since $5,900-6,100/t on 31 May 2006. By mid-2020, the market had erased March's gains in response to tighter feedstock availability and higher input costs. Similarly, prices for aluminothermic chrome sank to a 14-year low of $2.95-3.05/lb on 31 July.

By contrast, and despite weak superalloy demand, the US cobalt market registered a slight recovery in July, with rising costs for hydroxide and delays to shipments from South Africa and the Democratic Republic of the Congo supporting prices. Fob US prices for min 99.8pc cobalt warehouse fell to $13.28-14.10/lb on 14 July, but then rose for the first time in 21 weeks to reach $13.50-14.00/lb on 21 July. The market extended these gains to reach $13.70-14.20/lb on 28 July.

In Europe, higher hydroxide prices and tighter supply boosted prices for the chemical grade cobalt but the alloy grade remained unchanged.

European prices for 99.8pc min chemical grade cobalt rose to $14.25-14.70/lb on 30 July, swinging to a premium to the alloy grade for the first time since June 2019. Alloy grade cobalt on 30 July was assessed at $14.10-14.60/lb on limited demand.

Ti turnings supply tightens in Europe

Prices for titanium turnings in Europe strengthened slightly in late July on the back of a supply shortfall, as reduced aerospace manufacturing dented their production as shavings during the manufacturing processes.

Supply tightness was sufficient to more than offset a drop in consumption, with some European ferro-titanium producers moving to cut output to 50-60pc in anticipation of this turnings shortfall in the third quarter.

Argus-assessed European prices for unprocessed 6Al4V titanium turnings at 72-80¢/lb in late June — their lowest in more than three years — but values then rebounded to 74-81¢/lb on 21 July. Consumers of turnings typically do not build up inventories due to the material being a fire hazard.

Meanwhile, US dealers and recyclers — which have been struggling to sell aerospace-grade titanium scrap — began to bundle excess supply along with ferrous-grade scrap, targeting opportunities to sell into Europe.

US titanium demand was little changed in July from June, with mill capacity having been significantly scaled back. Scrap availability in the US market is higher because defence production is ring-fenced by the government, and does not slow even amid challenging economic conditions.

Dealer buying prices for ferro-titanium turnings (85pc Ti non-tin bearing) hovered near a 3.5-year low of 20-25¢/lb on 30 July. They were last assessed in the same price range on 29 December 2016.

By Anuradha Ramanathan

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24/12/20

Viewpoint: Copper volatility, uncertainty ahead in 2025

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Viewpoint: PGM demand from hydrogen sector to rise

24/12/20

Viewpoint: PGM demand from hydrogen sector to rise

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US Congress passes waterways bill

24/12/19

US Congress passes waterways bill

Houston, 19 December (Argus) — The US Senate has passed a bipartisan waterways infrastructure bill, providing a framework for further investment in the country's waterways system. The waterways bill, also known as the Water Resources and Development Act (WRDA), was approved by the Senate in a 97-1 vote on 18 December after clearing the US House of Representatives on 10 December. The WRDA's next stop is the desk of President Joe Biden, who is expected to sign the bill. The WRDA has been passed every two years, authorizing the US Army Corps of Engineers (Corps) to undertake waterways infrastructure and navigation projects. Funding for individual projects must still be approved by Congress. Several agriculture-based groups voiced their support for the bill, saying it will improve transit for agricultural products on US waterways. The bill also shifts the funding of waterways projects to 75pc from the federal government and 25pc from the Inland Waterways Trust Fund instead of the previous 65-35pc split. "Increasing the general fund portion of the cost-share structure will promote much needed investment for inland navigation projects, as well as provide confidence to the industry that much needed maintenance and modernization of our inland waterway system will happen," Fertilizer Institute president Corey Rosenbusch said. The bill includes a provision to assist with the damaged Wilson Lock along the Tennessee River in Alabama. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: Xcelsior aims to derisk minor metals investment

24/12/19

Q&A: Xcelsior aims to derisk minor metals investment

London, 19 December (Argus) — When UK-based Xcelsior Capital started exploring the investment landscape in the mining industry it noticed a significant interest in base metals but a lack of attention toward the lesser-known minor metals. These critical materials are often opaque and complex, leaving investors uncertain about where to start. Argus spoke with chief executive Liam Farley about Xcelsior's partnership with trading firm Wogen, the opportunities and risks associated with its investments, the influence of geopolitics, and Xcelsior's recent involvement in the Hillgrove antimony mine in Australia. What is Xcelsior Capital, and what is its investment model? Xcelsior is primarily a private credit investor that focuses on providing senior secured loans and working capital facilities and prepayments. As a financing partner of a physical commodity trader, Wogen Resources, we aim to establish a long-term sales and distribution agreement or offtake as part of our transactions. 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Minor metals have multiple end-uses, each with its different market dynamics. You must have a very deep understanding of the commodities themselves, the pricing mechanism, and the material specifications… these supply chains can be opaque. They can be very complex and fast-changing. Being able to navigate them is quite challenging for a lot of more generalist investors. It fundamentally creates a market risk component for critical metals, which can be a barrier. Additionally, many larger mining companies have traditionally avoid these markets because the assets are smaller and may not yield the expected revenue and profits compared with larger copper or iron ore mines. Which metals are on your radar? We are looking very closely at all the major commodities where Wogen has a prominent trading platform, including antimony, tungsten, vanadium, mineral sands, chrome and magnesium. We also are very interested in cobalt, but more on the recycling and processing side. In base metals, we are looking at tin. We focus on those commodities with energy transition links to new demand centres. New demand from sources like solar in small markets can significantly impact overall percentages and returns. For instance, electrification drives substantial demand growth for larger markets like copper, but its impact is smaller than that of markets like antimony. You recently signed an antimony deal with Larvotto Resources in Australia. Could you tell us more about it? We have signed a binding agreement with Larvotto Resources, whose subsidiary owns the brownfield antimony/gold Hillgrove project in New South Wales, Australia. We provided a $4mn loan in return for a seven-year production offtake agreement with Wogen, which will obtain the antimony concentrate from the mine and sell it globally through its customer base. Antimony prices have soared this year in part because of China's export restrictions. Do geopolitics play a significant role in investment decisions? There are large opportunities arising from the dislocation of value chains caused by geopolitics. We're now seeing this almost bifurcation in any material classified as dual-use in China like gallium, germanium and now antimony. This will result in increased volatility. The challenge is that you always want to underwrite projects based on long-term fundamentals, and we still do that. But we see the geopolitical shifts as an upside where we can capture that volatility in our investment strategy rather than rely on it as the sole basis for success. As global trade become more complex, do you see a need for more collaboration across different actors in the value chain? Private-public partnerships in critical metals are an absolute must for the success of western supply chains. One of our big focuses is to work with western groups, including government agencies, to facilitate the reshoring of critical metals and to figure out ways to incentivise new processing downstream. As a standalone investment, they can be challenging. They require very niche capital with great understanding. We are also looking for long-term partnerships with end-users and OEMs to form alliances and secure the supply of materials. There is a big opportunity in this area, but it takes a partnership approach, and that's something that everyone in our industry should prioritise in the next five to 10 years. By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU HRC imports drop a quarter on safeguards, AD probe

24/12/19

EU HRC imports drop a quarter on safeguards, AD probe

London, 19 December (Argus) — EU hot-rolled coil (HRC) imports have dropped by 24pc year on year in October, as a result of the safeguards changes introduced earlier in the year and the anti-dumping (AD) probe on key suppliers launched in August. Volumes amounted to 1.16mn t. The drop was underpinned by sharp declines from Japan, Egypt, Vietnam, Taiwan and South Korea. Meanwhile, other countries stepped in to fill the supply gap, such as Turkey, Ukraine and Serbia — deemed less risky for buyers, with all ramping up their volumes year on year by 292pc, 69.5pc and 172.8pc, respectively. Turkey was the top supplier with 222,760t in October. Imports from Indonesia also notably increased, by 41.5pc on the year to 29,140t. This volume will be likely to grow over November-March, but the country is expected to no longer be exempt from the safeguard measures from April onwards, market participants said. The European Commission this week launched an early review of the tariff-rate quotas, with changes, including on the developing countries list, to be introduced from April. Import supply is likely to drop further over the rest of the year, and into the first quarter, with January the last month in which residual larger volumes from countries under investigation can be custom cleared. Sales from Japan, Egypt, Vietnam and India, all under the scope of the AD probe , have mostly stopped over the current quarter. Cold-rolled coil (CRC) imports are meanwhile on the rise, with 281,336t clearing in October, up by 33.4pc on the year and 53.5pc on the month. Taiwan was the top supplier with 64,208t, followed by Turkey and India with just over 40,000t each. The increase in Taiwanese imports, which are expected to rise further, have fuelled talks in the market of a potential AD investigation. Similarly, hot-dipped galvanised (HDG) imports rose by 60.1pc on the year to 802,688t, of which 270,226t was from Vietnam, representing a 279.1pc increase year on year. Market participants have expected a probe on Vietnamese HDG for a while, but following the safeguards review launch said that a reduction in quota volumes might hit downstream products such as HDG and CRC in particular. Plate imports have also nudged up, but more modestly, by 6.9pc on the year in October to 222,133t. Rebar and wire rod arrivals were up by 170.6pc and 46.5pc on the year, respectively. By Lora Stoyanova EU HRC imports t Oct-24 ±% Oct-23 Total 1,164,750 -24 Turkey 222,760 292 Japan 164,691 -38.2 Egypt 148,979 -19.7 Vietnam 144,512 -54.7 Taiwan 127,350 -54.5 Ukraine 103,003 69.5 South Korea 90,674 -45.9 Serbia 55,372 172.8 Australia 30,690 -62.4 Indonesia 29,140 41.5 — GTT Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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