Weekly Metals News Digest – July 8-12
Chinese Aluminum Producers Eye Belarus for Expansion
Intentions Announced
Around 20 Chinese producers of aluminum semi-finished products have announced plans to cooperate with the Belarusian Universal Commodity Exchange during a recent meeting with its management.
Current Market Dynamics
Aluminum products such as pipes, sheets, foil, and profiles are currently sold through this platform. These products are either not produced in Belarus or are produced in minimal quantities due to the lack of bauxite deposits and aluminum smelters in the country. Consequently, Belarus relies heavily on aluminum imports from Russia.
Expansion Plans
The Belarusian Universal Commodity Exchange aims to increase its number of aluminum product suppliers. It has initiated negotiations with potential partners in Shanghai. For Chinese producers, the Belarusian market, though modest in size, offers a gateway to expand sales into Eastern Europe.
Future Prospects
Chinese companies are expected to increase their presence in the Russian market. While currently supplying flat aluminum rolled products in small quantities, establishing a warehouse with aluminum alloys for rolling and pressing could attract many customers. Russia hosts four major flat rolled product plants and numerous profile production enterprises.
Eramet's Continued Investment in Indonesian Nickel
Project Overview
French company Eramet plans to boost capital investments in Indonesia, despite the setback of a nickel and cobalt plant project on Halmahera Island, initially in collaboration with German chemical company BASF.
Project History
Eramet and BASF began discussing the project in 2020, finalizing its parameters early last year. The €2.6 billion hydrometallurgical plant was expected to produce 67,000 tons of nickel and 7,000 tons of cobalt annually. However, BASF withdrew due to a sharp decline in global nickel prices.
New Investment Plans
Eramet is exploring opportunities to invest in existing plants processing laterite ores via high-pressure acid leaching. Potential partnerships are being considered with companies that have existing or under-construction plants.
Potential Partner
Chinese company Huayou Cobalt is a potential partner, with Eramet possibly supplying raw materials to or acquiring a minority stake in Huayou Cobalt's plant.
Saudi Arabia's Emerging Role in Lithium Production
New Joint Venture
Australia's Critical Metals and European Lithium-Obeikan Group have agreed to establish and operate a lithium plant in Saudi Arabia through a joint firm, Arabian New Energy.
Raw Material Sourcing
The raw materials for the plant will be sourced from Austria, specifically the Wolfsberg pegmatite deposit owned by European Lithium-Obeikan Group. The deposit, located 270 kilometers southwest of Vienna, offers convenient transportation options for spodumene concentrate.
Project Support
The Saudi government is expected to support the construction of the lithium plant as part of its Vision 2030 strategy to reduce dependence on hydrocarbon exports.
Potential Partnership Between Norilsk Nickel and China Copper
Negotiation Details
Norilsk Nickel is in talks with China Copper to build a copper production plant in China. In April, Norilsk Nickel's CEO, Vladimir Potanin, announced plans to transfer copper smelting from Norilsk to China.
Plant Capacity and Location
The proposed plant is expected to produce 450,000 tons of copper annually, strategically located in China, the world's largest copper consumer. In 2023, China used approximately half of the 25 million tons of copper produced globally.
Potential Locations
The Guangxi Zhuang Autonomous Region and Shandong Province are potential sites for the new copper smelter.
China Copper's Position
China Copper, controlled by the Aluminum Corporation of China, is one of China's largest copper producers. In March 2024, it announced plans to secure copper supply projects to offset the loss of concentrate supplies from the closed Cobre Panama mine.
U.S. Imposes Tariffs on Mexican Aluminum
New Import Duties
The U.S. government will impose 10% duties on aluminum imports from Mexico that use raw materials from Russia, China, Belarus, or Iran, as announced by President Joe Biden.
Background and Impact
Aluminum imports from Mexico surged after the U.S. exempted it from import duties, despite Mexico lacking primary aluminum plants. The new duties will affect both primary and aluminum semi-finished products produced in Mexico using raw materials from the specified countries.
Decline in U.S. Production
Over the past 20 years, primary aluminum production in the U.S. has significantly decreased due to high electricity costs, with no signs of recovery.
Price Forecast
This isn't the first time the U.S. has imposed duties on Mexican aluminum, with a similar move in 2018. Given the continued decline in U.S. aluminum production, aluminum prices are expected to rise by at least 15% in the coming months.
