Weekly Metals News Digest – April 1-5
Shanghai Futures Exchange Sets Sights on Nickel Internationalization
The Shanghai Futures Exchange (SHFE), China's premier exchange platform, is embarking on an ambitious journey to internationalize nickel futures trading. This initiative aims to launch nickel contracts catering to the global market, challenging the longstanding dominance of the London Metal Exchange (LME) in setting benchmark prices for this crucial non-ferrous metal. The move comes in the wake of a dramatic surge in nickel prices on the LME in March 2022, where prices peaked at $100,000 per ton, causing concern among consumers and leading some to seek alternatives. Nickel prices are pivotal for industries like stainless steel production and electric vehicle battery manufacturing. Additionally, the SHFE plans to diversify its offerings by introducing trading in magnesium, tungsten, and recycled lead, further solidifying its position in the global base metals market.
Transformations in the Palladium Market
The palladium market is on the cusp of significant change following a period of price decline. Currently priced at around $1,000 per troy ounce, the market shows signs of an upturn, partly due to a reduction in palladium production in response to its prolonged price depreciation. Forecasts suggest that global palladium output could decrease to between 2.296 and 2.451 million troy ounces by the end of 2024, down from nearly 2.7 million three years prior. A resurgence in demand from the automotive sector, despite the rise of electric vehicles, could spur an increase in palladium prices as manufacturers continue to rely on palladium-based catalysts.
Electra Battery Materials: Aiming for Independence from China
Electra Battery Materials has entered into an agreement with Eurasian Resources Group for an annual supply of 3,000 tonnes of cobalt hydroxide. This strategic partnership supports the construction of a new facility near Toronto, poised to become North America's first cobalt sulphate plant, operational by 2026. Designed to serve the electric vehicle industry, the plant will significantly reduce North American dependency on Chinese cobalt sulphate, aligning with broader goals for material sovereignty in battery production. Plans for a similar facility in Canada indicate Electra's commitment to strengthening the North American battery supply chain.
Korea Zinc's Strategic Expansion in the US
In a notable development, Korea Zinc's subsidiary Pedalpoint Holdings has acquired Kataman Metals, a U.S.-based non-ferrous metal scrap procurement and processing company, for $55 million. This acquisition is pivotal for Korea Zinc, particularly in light of its copper expansion project at the Onsan plant, set for completion in the first half of 2025, which will necessitate up to 130,000 tonnes of scrap copper annually. The move reflects a broader trend of Asian steel companies venturing into the U.S. scrap metal market, signaling potential shifts in global metal trading dynamics.
Kazakhstan's Emerging Role in the Tungsten Market
The development of the Butyginskoye tungsten deposit in Kazakhstan, led by Zhetysu Tungsten and its Chinese partner Jiaxing International Resources Investment, marks a significant step toward Kazakhstan's entrance into the global tungsten market. With an annual ore processing target of 3.3 million tonnes to produce tungsten concentrate, the project represents a major investment in the region's mining sector. Beyond tungsten concentrate, plans to expand into the production of ammonium para-tungstate and tungsten carbide underscore the project's ambition to cater to the high-demand sectors of metal cutting tools. This venture not only highlights the deepening Chinese investment in Kazakhstan but also positions the country as a potential key player in the global tungsten market.
