Constellium Begins Using Hydrogen for Aluminium Casting
French metallurgical company Constellium has launched a project to produce aluminium semi-finished products using hydrogen as a fuel. The company's research and development center has successfully cast its first aluminium plate using hydrogen. Given the odorless and highly flammable nature of hydrogen, the research center installed an additional safety system to monitor hydrogen concentrations in the air, ensuring a safer supply to the aluminium casting furnace and preventing potential emergencies.
The hydrogen project is part of Constellium's broader strategy to reduce the carbon footprint of its products. Constellium is not the only major aluminium producer exploring hydrogen initiatives. In June, Norsk Hydro produced the world's first commercial batch of aluminium using hydrogen, although it involved recycled aluminium, which was subsequently used to manufacture parts for cars and window frames. Around the same time, Novelis received a £4.6 million grant from the UK government to experiment with hydrogen in a furnace to remelt scrap aluminium at its Latchford plant, which produces up to 195,000 tonnes of rolled products for the automotive industry.
Lithium Americas Secures Major Loan from US Department of Energy
The US Department of Energy has finalized a nearly $2.3 billion loan agreement with Lithium Americas. The loan has a term of two years, with interest rates varying by tranche based on changes in the US Federal Reserve's key rate. Lithium Americas plans to use the funds to develop the Thacker Pass project, which will involve constructing a facility in Nevada to extract lithium raw materials and produce 40,000 tonnes of battery-grade lithium carbonate annually, with the potential to expand to 80,000 tonnes per year.
Earlier, automotive giant General Motors announced an agreement to invest $625 million in Thacker Pass, giving it access to 38% of the project's output for 20 years once production begins. The support from the US Department of Energy aligns with President Joe Biden's policy to reduce US industry dependence on critical materials from China, particularly lithium, by boosting domestic production capabilities.
Glencore Maintains 2024 Production Forecast Despite Decline
Global mining and metals giant Glencore has reported its production results for the first nine months of this year, showing an overall decline. Copper output fell by 4% to 705,200 tonnes, primarily due to the sale of its Australian Cobar mine. Zinc production also dropped by 4% to 643,600 tonnes, mainly because of reduced utilization of the Antamina mine in Peru. Cobalt production decreased by 18% to 26,500 tonnes, following reduced output at the Mutanda mine in the Democratic Republic of Congo. Nickel production fell by 9% to 62,300 tonnes due to the shutdown of the Koniambo mine in New Caledonia.
In contrast, gold production remained stable at 543,000 troy ounces (16.9 tonnes) for January to September, while silver production fell by 4% to nearly 14 million ounces (434 tonnes). Notably, the drop in zinc production occurred despite the February 2024 restart of Glencore's Nordenham zinc smelter in Germany, which had been shut down in November 2022 due to rising electricity tariffs. Nickel production fell despite the February 2024 launch of the Anuri mine in Canada.
Despite these declines, Glencore has kept its non-ferrous metals production forecast for 2024 unchanged, expecting copper output in the range of 0.95-1.1 million tonnes, zinc production between 900,000-950,000 tonnes, and nickel production between 80,000-90,000 tonnes.
Rising Tensions in the Global Zinc Market
China's zinc smelter procurement group has set processing fees for the first quarter of 2025 in the range of $282 to $350 per tonne. In August, key Chinese zinc smelters discussed plans to overhaul facilities and postponed the commissioning of new capacity, while also considering a mechanism to set a minimum price for zinc concentrate processing services.
Meanwhile, zinc prices on the London Metal Exchange (LME) have been rising, reflecting a tense market situation. In early August, zinc was priced at $2,527 per tonne, but it has since surpassed $3,000. This trend is driven by large consumers actively buying zinc out of concern about potential supply reductions, particularly due to shipment difficulties from mines such as the Australian Century mine, which remains closed until mid-November.
According to the International Lead and Zinc Study Group, zinc raw material production (in terms of pure metal) has dropped by 4.2% in the first eight months of this year, while refined zinc production has fallen by 1%. Under these circumstances, further declines in zinc output are likely until the end of 2024 and into early 2025, potentially pushing zinc prices on the LME above $3,100 per tonne.
Global Market Faces Continued Copper Concentrate Shortage
By the end of 2024, the deficit of copper concentrates in the global market could reach 1.9 million tonnes, with further expansion expected over the next two years. At the same time, the global market is experiencing a surplus of blister copper smelting and copper cathode production capacity. These two opposing factors will continue to put pressure on rates for processing and refining copper concentrates, according to the Chilean state commission Cochilco, an important analytical body for the copper market.
The current situation in the global copper market suggests significant changes are on the horizon. China has seen the greatest growth in copper smelting capacity over the past decade, but new smelters are also being built in the Democratic Republic of Congo, Zambia, Indonesia, and India, which will transform global supply and demand dynamics. In the Democratic Republic of Congo and Zambia, copper production is expanding to address the challenges of transporting concentrates by road, as copper cathodes are easier to transport than concentrates. Meanwhile, Indonesian government policy aims to limit raw material exports and encourage processing into pure metal domestically, while India is experiencing growing demand for copper.
However, the shortage of concentrates could lead to lower pure copper output in several countries and delays in new smelter projects. Despite this, a surplus of copper cathode is expected to persist in the global market until the end of the year, largely due to weakening demand from China. The world's largest copper consumer has reduced orders for copper products (such as cables and wires) from the construction sector. Recent measures by the Chinese government to improve the construction sector are unlikely to have a direct impact on the global copper market or significantly boost copper prices.
