Commodities Roundup: Hot rolled coil heats up; European auto sector electrifies; US to add battery energy storage

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Here’s a quick rundown of news and thoughts from particular commodity markets, including coverage of hot rolled coil prices, Europe's automotive sector and more.

MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Hot rolled coil in Europe

Steel prices continue to rise, as buyers keep holding out hope a peak is coming.

For now, however, that doesn’t seem to be the case.

Earlier this week, MetalMiner contributor Christopher Rivituso delved into hot rolled coil prices in Western Europe.

“Offers for the flat rolled product from Western European mills are now €850-900 ($1,015-$1,070) per tonne ex works for May rolling and June delivery, traders told MetalMiner,” he wrote this week. “That moved up by an average one-third from the €750 ($894) that producers were offering in early February.

“Production cuts by Western European mills could, however, make it difficult to secure finished product at those times and prices.”

Automakers electrify

Meanwhile, staying in Europe, MetalMiner’s Stuart Burns overviewed the European automotive sector’s gravitation toward electrification.

“Rather than cause a retrenchment, the pandemic has helped accelerate the move to electrification,” he wrote.

“The greatest spur, however, has undoubtedly been government legislation.

“EU penalties on carmakers that fail to meet emission reduction targets are driving a mass migration from internal combustion engines (ICE) to hybrids and fully electric vehicles. After a slow start, European carmakers are adopting aggressive transition plans.”

Volkswagen is among the automakers making the shift.

“Just this past week, Volkswagen announced — to the joy of its shareholders, who piled in to push shares up 20% — that the German automaker aims to become the global leader in electric cars by 2025,” Burns added. “The automaker is placing heavy bets on next-generation lithium-ion batteries, the Financial Times reported.

“Volkswagen says it will sell 1 million electric or hybrid cars this year, a tenfold increase from 2019, with half being fully electric vehicles and the rest plug-in hybrids.”

China aims to curb pollution from aluminum output

China’s massive aluminum and steel sectors are significant polluters, particularly as much of the output therein still comes via coal-fired power generation.

In its latest five-year plan, however, Beijing appears to be taking steps to curb pollution levels.

“Government’s ambitions to reduce atmospheric pollution and consumers’ increasing desire for low or net-zero emission products is driving a rapid transformation in issues around aluminum smelter power supply,” Burns explained.

“Nowhere is this likely manifesting itself as dramatically as in China. Environmental pollution is one of few issues Beijing actually feels vulnerable about as a source of public unrest. The government’s latest five-year plan calls for dramatic reductions in emissions. The news has already hastened a move to hydro-rich Yunnan province, Reuters reported. The government effort against pollution could herald the closure of capacity elsewhere.”

US steel capacity utilization dips

Meanwhile, the US steel sector saw its capacity utilization rate take a modest step back last week.

The rate for the week ending March 20 reached 77.3%, down from 77.7% the week before.

Steel production during the week totaled 1.75 million net tons, or up 0.7% year-over-year.

US to see growing battery energy storage use

According to the Energy Information Administration, the US will see a “significant number” of battery energy storage systems join the US power grid in the coming years.

In 2050, 59 GW of battery storage will serve the US power grid, the EIA projected.

Copper mine production unchanged in 2020

Global copper mine production came in about flat in 2020 compared with 2019, the International Copper Study Group reported this week.

Despite significant hits to output in the first half of the year — stemming from the COVID-19 pandemic — production recovered in the second half of the year.

Top producer Chile saw its copper mine production fall by 1%. Meanwhile, Peru, the second-largest producer, saw its output fall 12.5%.

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