Category Archives: Metals

Investment in #Indonesia’s largest #Nickel-based industrial park hits US$18bil

Indonesia’s largest nickel-based industrial park in Sulawesi’s Morowali has seen investment more than quadruple to US$18 billion in the past four years, with analysts expecting South-East Asia’s largest economy to rely on the green metal – used to power electric vehicles – to break out of the middle-income trap.

Nickel boosts a battery’s energy density, while cobalt ensures the battery do not easily overheat or catch fire.

Indonesia has nearly a quarter of the world’s nickel reserve, and the metal has become one of its major exports and is forecast to surpass coal and palm oil.

Indonesia’s nickel-related exports surged to US$20.8 billion in 2021, from around US$2 billion in 2013. The first six months of 2022 recorded US$15.1 billion. Indonesia’s total exports in 2021 were US$231.5 billion.

Read more at: https://www.thestar.com.my/aseanplus/aseanplus-news/2022/09/28/investment-in-indonesia039s-largest-nickel-based-industrial-park-hits-us18bil

Singapore Exchange (SGX)set to unveil EV metals futures

SINGAPORE: Singapore Exchange (SGX) is set to launch its first lithium and cobalt contracts, adding to efforts by commodity exchanges to get battery materials companies and investors interested in using futures.

SGX is due to kick off trading in two lithium and two cobalt contracts.

The London Metal Exchange (LME) and CME Group Inc already offer futures for both metals, although trading liquidity is still far below established commodities contracts.

Demand for battery minerals is expanding rapidly as the global auto industry accelerates a push toward electric vehicles, triggering big price swings.

A global index of lithium prices has more than quadrupled in the past year, while Chinese lithium carbonate just hit a fresh record last week.

Read more at: https://www.thestar.com.my/business/business-news/2022/09/27/sgx-set-to-unveil————-ev-metals-futures

#China May Find It Hard to Cool #Lithium’s Rally This Time Around

Scorching gains for lithium, a raw material vital for powering electric vehicles, threaten to push costs even higher for Chinese battery makers, and the government is finding itself powerless to do anything about it.

Even after a meeting last week where Chinese authorities pleaded with major producers to stabilize prices, lithium carbonate surged to a fresh record, rising to 500,500 yuan ($70,716) a ton. In yuan terms, that exceeds the level prevailing when Tesla Inc.’s Elon Musk called prices “insane” earlier this year.

“In the short term, I don’t think the meeting will help China cool the rally,” said Peng Xu, analyst at BloombergNEF. Prices for seaborne spodumene — a partly processed form of lithium — are increasing amid a supply-demand mismatch and that’s squeezing the margins of Chinese lithium refiners, Xu said, adding there’s still room for further gains from current price levels.

Read more at: https://www.bloomberg.com/news/articles/2022-09-22/china-may-find-it-hard-to-cool-lithium-s-rally-this-time-around

#CBC: Electric car batteries could boost #Glencore’s recycling operations

The growing market for electric vehicle batteries is expected to boost Glencore’s recycling operations in Sudbury, Ont.

The mining giant has been recycling metals at its Sudbury smelter for 32 years. 

Those alloys, which come from things like aircraft engine turbines or even parts from machine shops, are melted down, granulated and shipped to a facility in Norway, where they are separated into their base elements like nickel and cobalt.

Read more at: https://www.cbc.ca/news/canada/sudbury/battery-recycling-glencore-sudbury-1.6590472

#Bloomberg: #Lithium Resumes Insane Gains to Add Pressure on Automakers

Lithium — the ubiquitous raw material needed in electric vehicle batteries — was trading at insane levels, and China’s authorities in March pushed key industry players to act, prices briefly began to cool. Now, they’re rising again to add pressure on automakers.

Lithium carbonate jumped to a new record Friday of 500,500 yuan ($71,315) a ton in China, according to data from Asian Metal Inc. The battery material has roughly tripled in the past year, and is more than 1,150% higher than a pandemic low touched in July 2020. Prices of lithium hydroxide are also gaining and closing in on an all-time high set in April. 

Read more at: https://www.bloomberg.com/news/articles/2022-09-19/lithium-resumes-insane-gains-to-add-pressure-on-automakers

#Glencore looking to trade #Lithium on soaring EV demand

Mining and commodity giant Glencore  is looking to add lithium to the suite of metals it trades, as the raw material is in hot demand due to the rapidly growing production of electric vehicles (EVs), two sources with knowledge of the matter said.

If it goes ahead, the Switzerland-based company’s trading team would be part of the zinc and copper business run by Jyothish George and Nick Popovic, the sources said.

Glencore declined to comment.

The company does not own lithium mines but produces copper, nickel and cobalt, other raw materials that it terms “commodities of the future,” as they are needed to manufacture batteries, electric cars and renewable infrastructure that will help the world transition to a greener economy.

Read more at: https://www.reuters.com/markets/europe/glencore-looking-trade-lithium-soaring-ev-demand-sources-2022-09-16/

Industrial users flee LME nickel, deepening market fissures

LONDON, Sept 14 (Reuters) – The London Metal Exchange faces a struggle to regain its dominant position in global nickel trading as volumes slide and participants flee an increasingly volatile market in the wake of trade mayhem earlier this year.

Nickel volumes on the world’s oldest and largest venue for trading metals collapsed after the LME suspended its contract for a week and cancelled all trades on March 8, when prices doubled in a few hours to a record above $100,000 a tonne.

LME data shows many participants have abandoned the nickel market, a trend several traders say looks set to continue leading to even lower volumes and more volatility as more people opt to negotiate prices directly.

Average daily volumes of nickel traded on the LME plunged 50% last month to 203,856 tonnes from the same period last year. This follows drops of 28%, 35%, 25% and 42% in April, May, June and July respectively.

Read more at: Analysis: Industrial users flee LME nickel, deepening market fissures | Reuters

#Shanghai’s #Nickel twist risks more market fracture

LONDON, Sept 12 (Reuters) – The London Metal Exchange’s (LME) controversial suspension of its nickel contract in March didn’t just impact trading in London.

In the immediate aftermath of the LME intervention, the Shanghai Futures Exchange (ShFE) was forced to suspend its nickel contract for two days and has arguably suffered even greater damage.

LME nickel volumes have unsurprisingly slumped since March with activity in August down 47% on the same month last year. But ShFE nickel volumes have fallen harder, collapsing 74% year-on-year in August and dropping by 70% over the first eight months of 2022.

Nickel activity in Shanghai is now back at levels last seen in 2015 when the contract was first launched.

ShFE’s response is to broaden the range of physical nickel that can be delivered against its contract to include briquettes.

The move would help address the Shanghai contract’s persistent problem of super-low inventory and align it more closely with the LME product.

But it also risks stimulating competition for LME stocks, which are overwhelmingly in the form of briquettes and already low.

The root problem is that both exchanges are competing for physical liquidity in what is a shrinking part of the global nickel supply chain.

ShFE first mooted the idea of including briquettes against its contract in 2020. It’s a form of nickel that has become more widely traded in China in recent years, largely because it’s a popular choice for electric vehicle battery makers.

This year’s market meltdown appears to have given the proposal fresh impetus.

It’s easy to forget that the short squeeze that caused the London March mayhem was foreshadowed by rolling tightness in Shanghai over the second half of last year.

Indeed, the resulting import-friendly arbitrage accentuated a run on LME stocks, laying the foundations for the price explosion that rocked the market in early March.

Persistent tightness in the Shanghai market is a function of chronically low exchange inventory. It fell below the 10,000-tonne level in April last year and hasn’t recovered since, currently standing at a meagre 3,523 tonnes.

Physical liquidity on the Shanghai contract is constricted by the fact that it only allows for delivery of full-plate nickel cathode with a limited number of registered brands.

Other than China’s domestic producers, only Russia’s Norilsk Nickel and Glencore’s Norwegian Nikkelverk brands are accepted.

Extending the delivery criteria to include briquettes looks like an easy win-win of making the contract more useful for domestic battery-nickel players and attracting more physical units to ShFE warehouses.

The only problem is where that extra metal might come from.

China doesn’t produce much high-purity Class I nickel, most of the country’s production taking the form of nickel pig iron for the stainless steel sector.

Briquettes have to be imported from Australia, Madagascar and Canada or from the LME warehouse system, where briquettes account for 87% of registered nickel stocks.

History provides a warning of what might happen if ShFE changes its delivery criteria.

Low stocks liquidity plagued the Shanghai nickel market from its launch in April 2015. Faced with the prospect of an immediate squeeze on its new contract, ShFE included Norilsk Nickel full-plate metal as a delivery option from June of that year.

In doing so, it generated a tectonic movement of Norilsk-brand nickel from LME warehouses into China.

LME warehouses held over 267,000 tonnes of full-plate nickel, accounting for 57% of total registered inventory, at the start of June 2015. By the end of 2017 that stockpile had dwindled to 71,340 tonnes, representing just 19% of registered nickel stocks.

China’s imports of refined nickel hit what remains an all-time record high of 371,000 tonnes in 2016, including 228,000 tonnes of Russian origin metal

ShFE nickel stocks rose from 10,000 tonnes in the middle of 2015 to what also is still an all-time high of 112,000 tonnes in September 2016. Since then the mountain has dwindled to next to nothing.

A similar shift in briquettes inventory can’t be ruled out, although there is simply not enough metal around to generate the volumes seen in the 2016 migration of full-plate cathode.

LME nickel stocks fell by 147,000 tonnes last year and they have halved again so far this year to 53,532 tonnes.

Although accentuated by the flow of refined metal to China in the closing months of 2021, the underlying demand for LME stocks has been coming from the battery sector.

The world is building ever more gigafactories and most of them need refined nickel to feed into the metallurgical mix.

Availability of refined nickel is challenged and that of briquette even more so.

Remaining physical stocks risk being split across two trading venues, disrupting rather than enhancing pricing.

The core issue facing both exchanges is that Class I refined nickel only accounts for around half of global production and the ratio is falling all the time as Indonesia builds ever more nickel matte capacity.

Tsingshan Group, which found itself at the centre of the March storm, is a massive nickel producer but none of its output is in a refined form that could be delivered against either the London or Shanghai market. With no option of delivering physically against its short position, its massive exposure could only be resolved at eye-watering financial cost.

The limitations on what sort of nickel can be traded on the London market played a key part in the market blow-up of 1988 when the LME also briefly suspended trading.

The problem was well understood even then but no-one could agree on what would constitute a benchmark specification for a product as chemically variable as ferronickel.

It remains to be seen whether the LME or ShFE can find a pricing solution to what is an increasingly diverse product spectrum, which now includes a fast-growing stream of nickel sulphate.

Competing for a declining slice of the physical market may not be the answer.

Read more at: Column: Shanghai’s nickel twist risks more market fracture | Reuters

Can #Indonesia’s electric car, battery sector have a smooth ride beyond #China?

  • US offers tax rebate for EV buyers whose vehicles’ batteries use minimal metal from ‘foreign entities of concern’, in reference to China, Russia firms
  • A lot of nickel, used for EV batteries, is from Indonesia, but experts say sector must become greener to gain more global market share.

A new regulation in the United States offering incentives to buyers of electric vehicles with battery components only minimally made by “foreign entities of concern” has paved the way for Indonesia to expand its burgeoning EV battery industry beyond the Chinese market.

However, the nation’s lacklustre green energy revolution may dampen that prospect in the future, analysts said.

The US Inflation Reduction Act (IRA), passed into law last month, offers a tax rebate of US$7,500 for EV consumers whose vehicles undergo final assembly in North America, and if their batteries use minimal metal components from “foreign entities of concern”, in a veiled reference to Chinese and Russian companies.

At least 40 per cent of the important metals in the EV battery, including lithium, nickel, cobalt and manganese, must also come from the US and its Free Trade Agreement partners. That percentage will rise to 80 per cent by 2026, according to Reuters. The new law will be effective until at least 2032.

There will be implications for Indonesia, “directly or indirectly, considering that China-made batteries imported by the US use Indonesian nickel”, said Putra Adhiguna, a Jakarta-based energy analyst in the transport sector at the Institute for Energy Economics and Financial Analysis. “But at this point in time, it’s unclear what the magnitude of that implication will be.”

While currently the largest markets for EV batteries are China and the European Union, “the Chinese market is still twice or three times bigger than the US market now,” Putra said.

But, Putra said that in the future, the US will be a “significant market” for nickel producers.

“The US is a significant growth market, so if they block products from China, and implement additional measures such as the IRA, our nickel industry’s future growth will feel the impact of the US’ drive to localise the EV supply chain.”

Read more at: Can Indonesia’s electric car, battery sector have a smooth ride beyond China? | South China Morning Post (scmp.com)

New cathode design solves major barrier to better lithium-ion batteries

Researchers at the U.S. Department of Energy’s (DOE) Argonne National Laboratory have a long history of breakthrough discoveries with lithium-ion batteries. Many of these discoveries have focused on a battery cathode known as NMC, a nickel-manganese-cobalt oxide. Batteries with this cathode now power the Chevy Bolt.

The team at Argonne National Laboratory developed a method for producing boundary-free single crystals. Testing of small cells with such single-crystal cathodes at very high voltage showed a 25% increase in energy storage per unit volume, with almost no loss of performance over 100 cycles of testing. By contrast, over the same cycle life, the capacity declined by 60% to 88% in NMC cathodes composed of single crystals with many internal boundaries or with coated polycrystals.

“We now have guidelines that battery manufacturers can use to prepare cathode material that is boundary free and works at high voltage,” said Khalil Amine, an Argonne Distinguished Fellow. ​“And the guidelines should apply to other cathode materials besides NMC.”

Read more at: New cathode design solves major barrier to better lithium-ion batteries | Argonne National Laboratory (anl.gov)

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