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Interview with Tim Armstrong, senior vice president of planning solutions for S&P Global MobilityLearn more about issues pivotal to the aluminum sector at S&P Global Commodity Insights Aluminum SymposiumConferences LIVE
Legislation and consumer demand are driving increased demand for electric vehicles, increasing the need for critical materials to build out battery supply chains. Tim Armstrong, senior vice president of planning solutions for S&P Global Mobility, puts the demand for critical materials into context and discusses the main drivers for EV expansion.Learn more about issues pivotal to the aluminum sector at S&P Global Commodity Insights Aluminum Symposium
Total US battery storage capacity climbed 52% year on year to 10.777 GW by the end of first quarter 2023, even as only a fraction of the proposed 2.448 GW additions actually came online, while nearly 3.2 GW is expected to be added in Q2. View Infographic
BASF CEO Martin Brudermueller tells Rob Westervelt of Chemical Week that the company plans to target a 10% share in the growing market for nickel-based lithium-ion batteries. BASF has the technology and scale to be a major player in this market, and is betting big on Asia growth opportunities.Find out more about e-mobility & electronic chemicals at the World Petrochemical Conference 2024
Seaborne iron ore prices picked up speed to exceed the $110/dmt CFR China mark Aug. 21, a three-week high, backed by a recovery in demand-supply fundamentals coupled with increasing clarity around China's steel production control and volumes, market sources told S&P Global Commodity Insights. The Platts-assessed Iron Ore Index, or IODEX, touched $110.35/dmt CFR China Aug. 21 but was largely rangebound between $100-$110/dmt CFR China earlier in August for delivered cargoes in the 2-8 weeks forward window, S&P Global data showed. Platts IODEX was last higher on July 27 when it was assessed at $113.10/dmt. Through the first half of August, Platts IODEX was bogged down by pockets of bearishness, falling to a low of $103.35/dmt on Aug. 10, but looks to be realigning with market fundamentals. Downstream steel mill margins drew a parabola through the month, kicking off on a positive note but slipping shortly after. News around steel production controls cast a dark cloud over market confidence through the first half of August, albeit no official confirmation was heard among market sources. "Steel mills have no clear [direction] on production control policies to recover market confidence," a north China-based mill source said. "Market will need some time." However, market sources said prices were heading north due to a slew of factors including bullish macroeconomic news re-instilling confidence in the market and sustained import margins as prices appeared to have bottomed out and reached a support level. The People's Bank of China lowered the one-year Medium-term Lending Facility rate to 2.50% from 2.65% Aug. 15, a sign that the government may be ramping up monetary easing efforts to boost a sputtering economic recovery. On top of which, the Asian iron ore market witnessed positive import margins for around 60 consecutive days, indicating that seaborne procurements were more cost competitive compared with purchases from Chinese portside, on an import parity basis. "The price difference [in import margins] is significant for recent seaborne trade activities to flourish," an iron ore trader said. The utilization rate in blast furnaces was also reportedly higher, an indication of an increase in iron ore consumption for crude steel output, sources said. "The main factor for the price increase will be the high operating rates and high crude steel output," another international iron ore trader said. Impact on production news cut fade Market sources attributed the recent recovery in seaborne iron ore prices to the impact of steel production cuts tapering off. "It could just be a correction [in seaborne prices] because of the overly bearish outlook from production control policies since production cuts in only specific areas allow other steel mills to increase the production instead, but I guess total production volume will not exceed [that of] 2022," a north Asia-based iron ore trader said. A Beijing-based Chinese trader said the recent rally in iron ore prices was mainly a correction following an overly bearish market outlook previously. "September we will see steel demand step out of the bottom as the peak season is coming. The supply of mainstream iron ore cargoes continues to be tight and port inventory has fallen to around 120 million mt level. The fundamentals of seaborne iron ore market itself are healthy," the trader said. Meanwhile, the policy for crude steel production cuts remained uncertain in terms of its implementation and whether it will lift seaborne prices in the interim, sources said. "The responses from the top steel-making hubs, including Hebei province and Shandong province, are key to the success of maintaining crude steel production flat from 2022. While by end-August we haven't yet seen any scaled production cut happening in Tangshan and it's questionable whether the target could still be met by the end of the year," another Beijing-based steel mill source said. Before the close of the trading week ended Aug. 18, an uptick in the finished steel output reported in China despite news of production controls reflected resilient buying interests, credits to stable operation rates and healthy import margins. Downstream steel sales also recovered in the second decade of August, signs in which HRC and rebar margins have improved.
China's steel markets remain under pressure amid piling up inventories at a time of robust production and weak demand, a development that comes at a time of growing signals over imminent output cuts in the country, industry sources said Aug. 7.Chinese domestic rebar prices in Beijing fell by Yuan 103/mt ($14.3) from Aug. 1 to Yuan 3,753/mt on Aug. 7, while the domestic hot rolled coil prices in Shanghai fell by Yuan 100/mt over the same period to Yuan 3,970/mt, S&P Global Commodity Insights data showed.Rebar inventories in the eastern trading hub of Hangzhou as of Aug. 4 were about 13% higher on the month and 35% higher on the year, sources said. Meanwhile, long steel inventories in northern Beijing -- mainly rebar and wire rod -- were still about 3% lower on the year, but up by 14% from early July, they said.The hot-rolled coil inventories as of early August in eastern China's Shanghai and southern China's Guangdong Lecong markets also showed upward trend, increasing by 17% and 3%, respectively, from early July, according to sources.Some steel traders said market sentiment was at the low point at the moment amid rising inventories. Unfavorable weather across China in the last two weeks further dented domestic steel demand, and it remains unclear when China's steel output cuts could actually begin, the trading sources added.Market chatter indicated that China's largest steelmaking province, Hebei, may soon announce steel output cut details around mid-August."Even if Hebei and other provinces announce to keep their 2023 crude steel output below 2022 levels, the question remains that when and how strictly the output cuts can be carried out," a trader said."Chinese steel mills are currently almost running at full operation, which is likely to cause inventories to continue rising at least through August...I'm just a bit cautious whether Chinese mills could achieve output cut goals all in the fourth quarter," another market participant said.However, some other market sources still expected China would keep its overall crude steel production in 2023 within 2022 levels, and Q4 could create a good opportunity to time steel output cuts due to low seasonal demand.According to data from the China Iron & Steel Association, the country's daily crude steel output in July may average 2.999 million mt.If the output in August remains the same as in July, the daily crude steel output over September-December will have to fall by 19% from July-August level to around 2.43 million mt, in order to keep China's annual crude steel output on par with 2022 levels, S&P Global calculations showed.
Umicore SA is a circular materials technology company that transforms metals from end-of-life materials and by-products into pure metals and applications. The automotive sector is one of the company’s major end markets and is becoming even more important through the growth of Umicore’s battery material business, its engagement in fuel cell catalysts as well as its activities in lithium-ion (Li-ion) battery recycling, said Umicore CEO Mathias Miedreich.Miedreich was appointed CEO of Umicore in October 2021. Prior to joining Umicore, he had spent almost 25 years of his professional career in the automotive industry with companies such as Siemens AG, Continental AG and Faurecia SE.Miedreich told CW that he did not change his initial plans as Umicore CEO despite the geopolitical and macroeconomic volatility at the time. "We experienced, much like every other company, headwinds due to energy and raw material price increases, as well as the disruption of the supply chain in our automotive business caused by semiconductor shortages. However, because of good preparation and because of Umicore being in the game for quite some time, we were quite good in absorbing these external shocks," he said. "I was impressed with the resilience of Umicore, in terms of its pricing power and how the company’s processes enabled its customers, especially in its automotive catalyst business, to participate in those fluctuations."Battery materials to drive growthElectrification is at the core of the company’s growth strategy, called Umicore 2030 — RISE, so battery materials are its main growth driver. The company has announced several investments in line with the strategy, including plans to construct a gigafactory for battery materials in Ontario.All the engineering preparation works have been completed or are close to being finalized, and the company is moving "fast and efficiently" in the right direction, in terms of permitting, Miedreich told CW. "This means we are on track to begin construction this year," he said. "Our plan is quite substantial. The first step includes installing cathode material manufacturing, but also precursor manufacturing at the same time and we are also currently looking into the next step, which includes refining, and it could also include recycling but that is something we need to decide about in the future. We are already thinking about it though as well as preparing and scouting for it."Umicore announced plans for the gigafactory in July 2022, and in the following month the US Inflation Reduction Act (IRA) was announced. The US IRA was a "pleasant surprise and a positive shock" because it has suddenly catapulted the US, which was not a frontrunner in electrification, ahead of Europe in terms of rollout, Miedreich said.Umicore has been involved in discussions with the European Commission, and the company believes Europe should not simply copy the US IRA. It has instead advised the commission to focus on permitting, talent and incentives, he said.Europe lags behind North America in terms of permitting and time to market, Miedreich said. "From our own experience, Canada is much faster than Europe," he said. Electrification also requires very specific talents and know-how, and Europe should look to create the right conditions for universities, research institutes and the industry to produce the talent to advance the EU’s electrification efforts even if this approach may not have an immediate payback, Miedreich added.Umicore also believes that if there is to be a type of incentivization or expanded scheme of grants and subsidies coming from the EU, they should be linked to sustainability and reward investments that create more sustainability. An example of possible incentivization could be the top 40% of companies delivering battery materials, in terms of scope 3 CO2 emission performance, should be eligible for beneficial tax treatment or other types of incentives, Miedreich said.Shaping the futureUmicore’s philosophy has changed in the past three years under Miedreich’s leadership. "In my view, you must always think that you do not have the right battery technologies today and you have constantly to work to bring new batteries. The question is what the battery technology of the future is, what is the one to bet on. Once you decide that then you must build your ecosystem around that," he said.Umicore’s approach to future battery technologies has transitioned from a passive approach where the company was listening to what cell makers wanted, to a more proactive or even aggressive approach where the company is constantly trying to introduce new technologies to the market, to solve problems for its customers, Miedreich said.For example, Umicore has launched a high lithium manganese (HLM) technology that replaces nickel with manganese. HLM has only a third of the nickel content of traditional nickel manganese cobalt (NMC) battery technology, Miedreich said. HLM offers a better total cost of ownership than lithium iron phosphate (LFP), a technology currently used for its lower costs in the low-range segment of the EV market and is popular in China, according to Miedreich. HLM also offers longer driving ranges than LFP, equivalent safety, much more reliable state-of-charge monitoring and better recyclability, according to Umicore."We are now developing our HLM with five or six different customers and we will be ready to go in mass production in 2026, but we are also working on solid-state battery materials," Miedreich said.Safety is the main reason automotive original equipment manufacturers (OEMs) want to implement solid-state batteries in EVs, according to Miedreich. "Solid-state batteries are safer than conventional lithium-ion batteries because they do not have any liquids. If you take a scissor, for example, and cut into the battery, nothing will happen, but if you were to do that to a Li-ion battery, such as that of a smartphone, there would be a thermal event," he said.Umicore has also recently joined forces with Idemitsu Kosan Co., Ltd., a leader in electrolytes, to develop a new battery material called catholyte. Catholytes are a combination between electrolytes and cathodes in nonmetallurgical chemistry and can be a game changer in terms of power density for solid-state batteries, Miedreich said."In addition, we are working on some more future-looking technologies such as the sodium-ion technology, which replaces the expensive and rare lithium with sodium that can be found abundantly everywhere in the world. We are working extremely hard on this technology that will probably be more relevant in the second half of the decade going toward 2030," Miedreich said.For the development of all these different technologies, the large network of partners the company works with at research institutes, universities and other technology companies plays an important role, Miedreich told CW. "I believe that the company with the best ecosystem in that environment will be the winning company. The strategy we are rolling out with our partners is that it is not so much about yourself because the task is simply too big," he said.Fuel cell catalysts, battery recyclingFuel cell catalysts and battery recycling are other areas where Umicore is expanding its presence through investments, such as the fuel cell catalyst plant at Changshu, China, the company announced in July 2022 and that will be the world’s largest fuel cell catalyst plant when it is up and running, Miedreich said. The company already operates two fuel cell catalyst plants — one in South Korea and a smaller unit in Germany."The plant in China will support the increasing demand, while the decision to locate our third fuel cell catalyst plant in China was easy since it is the world’s biggest market for fuel cell catalysts. It is a local-for-local approach, while we are progressing very well with the permitting and so far, we are completely on track with our planning," Miedreich said.China is the biggest market for commercial vehicles, and the Chinese government has decided that its commercial vehicle electrification strategy will mainly go through fuel cells and fuel cell technology, he added.Umicore has been active in China for many decades with different types of product. Its presence is especially strong in automotive catalysts, and it has made significant progress in the last three years in fuel cells from an end-market point of view, Miedreich said.The company, meanwhile, already has 15,000 metric tons per year of battery recycling capacity in Europe and is looking into scaling this up to 150,000 metric tons per year with a new facility in the region that will be operational by the end of 2026, according to Miedreich. "I am absolutely convinced there is no way around recycling of batteries for two reasons. One is to secure the availability of battery-grade metals that will only be possible if we include recycling into the stream. The other is that recycling is the only way to reach the CO2 targets of batteries because the recycled CO2 footprint of metals is up to 80% lower than virgin metals that you extract from the mine," he said.This means that battery recycling helps secure the supply of metals required at a very low CO2 footprint, Miedreich said. "It is because of this importance of recycling for the environment as well as for the battery materials market that there are already mandatory recycling quotas in Europe that require the use of a certain percentage of locally recycled battery materials in the supply chain. This will soon happen in the US too," he said.Expectations for 2023Umicore expects 2023 to be another record year in catalysts because it is "very confident" it can outperform last year, which broke records, Miedreich said. "This expectation is based on our market performance that has been very good so far this year. The market-share gains that we have recorded, the volumes we can gather but also the mix that we have are favorable," he said.Umicore anticipates headwinds from inflation, but also in terms of precious metal pricing that will be weaker than last year. "However, we will be able to compensate it with operational efficiencies and thus, we believe that in 2023 the catalysis business will outperform 2022 in revenues and earnings," Miedreich said.The rechargeable battery materials business unit, which forms the biggest part of Umicore’s energy and surface technologies (E&ST) business group, performed broadly during the first quarter of 2023 in line with the first quarter of last year, and its earnings in full-year 2023 will be on a par with the 2022 level, the company said.Umicore is preparing for a large ramp-up of volumes that will happen in 2024 because over the last 18 months the company has signed several new contracts with customers, Miedreich said. "These new deals will help us already in the last quarter of this year, but then very much in 2024 to have a very significant growth on the output for our battery materials. That will be the starting point for a growth trajectory that will not end probably for the next 20 years, as the automotive market is becoming fully electrified," he added.Meanwhile, the company’s recycling business group is doing "very well" operationally despite the effect of lower precious metal prices, Miedreich said..For more insight and news on electronic chemicals visit www.chemweek.com
The steady increase in the demand for critical metals, such as dysprosium, neodymium, manganese and niobium, used to advance electrification and digitalization, and the time it takes to scale up their production may result in their shortages in future, even if recycling increases, according to a survey led by Chalmers University of Technology, Sweden, on behalf of the European Commission."It is important to increase recycling. At the same time, it is clear that an increase in recycling alone cannot meet requirements in the foreseeable future, just because the need for critical metals in new cars is increasing so much. Therefore, there needs to be a greater focus on how we can substitute other materials for these metals. But in the short term it will be necessary to increase extraction in mines if electrification is not to be held back," said Maria Ljunggren, associate professor/sustainable materials management at Chalmers University of Technology.The survey showed that the proportion of critical metals has increased significantly in vehicles, a development that the researchers believe will continue. Several of the rare earth elements are among the metals that have increased the most, Chalmers University said."Neodymium and dysprosium usage has increased by around 400% and 1,700% respectively in new cars over the period, and this is even before electrification had taken off. Gold and silver, which are not listed as critical metals but have great economic value, have increased by around 80%," said Ljunggren.These critical metals are of "great" economic importance to the EU, as a growing number of electric cars are traveling on the roads of Europe and the increasing dependence on them is "problematic" for several reasons, according to Chalmers University."The EU is heavily dependent on imports of these metals because extraction is concentrated in a few countries such as China, South Africa and Brazil. The lack of availability is both an economic and an environmental problem for the EU, and risks delaying the transition to electric cars and environmentally sustainable technologies. In addition, since many of these metals are scarce, we also risk making access to them difficult for future generations if we are unable to use what is already in circulation," said Ljunggren.The European Commission’s Critical Raw Materials Act has "emphasized" the need to enhance cooperation with reliable external trading partners and for member states to improve the recycling of both critical and strategic raw materials, Ljunggren said. It has also "stressed" the importance of European countries exploring their own geological resources, she said.Ljunggren added that there is hope the recently identified deposit of rare metals in Sweden can help EU become "less dependent on imports in the long run."Sweden’s state-owned mining company LKAB (Luleå) identified mineral resources of rare earth metals exceeding 1 million metric tons (MMt) of rare earth oxides at the Per Geijer deposit near the company’s mining operations in the Kiruna area of northern Sweden, according to a statement by the company in January.For more insight and news on electronic chemicals visit www.chemweek.com
Mining company LKAB (Luleå, Sweden) has announced that today it is submitting an application for a processing concession for the Per Geijer deposit in the Kiruna area of northern Sweden. Meanwhile, the company said that according to further investigations at the Per Geijer deposit, the mineral resources for rare earth oxides is 25% higher than initially thought, at over 1.3 million metric tons "in situ."In January, the company had said it identified mineral resources of rare earth metals exceeding 1 million metric tons (MMt) of rare earth oxides at the Per Geijer deposit. The discovery was already the largest reported rare earth deposit of its kind in Europe when announced. Per Geijer is an iron ore deposit with high levels of both phosphorus and rare earth oxides, the company said.If the processing concession is approved, the company said it will continue to develop the deposit and prepare an environmental permit application. "However, this does not mean that we get permission to start a mine. The processing concession is also only one part of the complex Swedish review system," said Jan Moström, president and CEO of LKAB.In addition, if the processing concession is approved, it will give LKAB the conditions to invest in the extensive studies required as a basis for decisions on possible future mining, the company said. A permit is also required in accordance with Sweden’s Environmental Code from the Land and Environment Court, to open a mine, LKAB said."In Europe, there is now talk of two years for permits for strategically important minerals such as those for the rare earth metals, but our experience is that it can take between 10 and 15 years to get through the complex Swedish trial system. The processing concession is only one part of this. So, this will be an important test if the permit system manages to meet the expectations of the outside world," said Moström.LKAD added that the issue of "lengthy and unpredictable" permit examinations has been widely debated in recent years, and current and previous governments have promised reforms so that a critical climate transition does not fall on bureaucratic formal requirements without significance for the environment.For more insight and news on electronic chemicals visit www.chemweek.com