Commodities Roundup: Copper overheating?; Oil price movements; Deep sea mining

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Here’s a quick rundown of news and thoughts from particular commodity markets, including the copper market, oil price movements and much more.

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

Copper price heats up

Last week, the copper price soared to an all-time high of over $10,700 per metric ton.

Amid strong demand and a falling US dollar, commodities prices have continued to rise.

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But for the red metal, is it in danger of overheating?

"Speculators, at least, seem to be putting their dollars where their expectations are," MetalMiner's Stuart Burns explained. "Funds have moved out of copper and into iron ore and steel futures of late, at least for the time being. That signals what may be a pause, or maybe the peak, for prices.

"Watch those position reports. The price has been driven at least in part by investor sentiment. Position reports tell us a lot about that sentiment.

"What they are telling us today is sentiment is not behind further rises."

DRC looks to assume control of artisanal mining sector

Meanwhile, cobalt, in high demand for its use in electric vehicle batteries, could be seeing a shakeup in the top cobalt mining country.

The Democratic Republic of the Congo, where a majority of the world's cobalt is mined, is aiming to assume control of the artisanal mining sector. The unregulated sector has long been the subject of allegations regarding poor working conditions and use of child labor.

"The effort aims to clean up the DRC’s appalling reputational image as a supplier tainted with all manner of human rights abuses and lack of supply chain transparency," Burns explained earlier this week. "Reuters reports the state, in the guise of a new enterprise called the Enterprise Generale du Cobalt (EGC), aims to assume total control of the artisanal cobalt mining sector. That includes monopoly rights to buy all production."

However, cleaning up the sector's reputation is not the only reason behind the government's effort.

As with many things in life, it comes down to money.

"Tax take is a probably the biggest factor," Burns wrote.

"Last year, the artisanal mining sector is estimated by the state to have produced about 18,000 metric tons, worth a notional $800 million at current prices.

"On that, the government's tax take amounted to exactly zero."

ArcelorMittal to complete new hot strip mill in Mexico

Steelmaking giant ArcelorMittal will complete a new hot strip mill by the end of this year at its Lázaro Cárdenas site in Mexico.

The site will have annual capacity of 2.5 million metric tons, MetalMiner's Christopher Rivituso explained this week.

"The new mill would produce HRC for the non-auto, domestic and industrial use sectors," he added. "The mill is part of a $1 billion upgrade project that the parent group announced in 2017 for the Lazaro Cardenas site."

Under the sea

As electrification continues around the world, demand for rare earths and critical minerals will also continue to rise.

However, while those materials will contribute to a greener future, mining for those materials is still an environmentally damaging process.

With that in mind, two companies are teaming up to mine the sea, an alternative to surface mining.

"But now, two companies, the Vancouver-based The Metals Company and the Danish company Bjarke Ingels Group (BIG) have got together to mine the deep seas for these resources, a lesser destructive alternative to surface mining," MetalMiner's Sohrab Darabshaw wrote.

"Together, these companies recently unveiled designs for seafloor mineral collector robots and carbon-neutral vessels."

Oil price trends

Meanwhile, Burns checked in on what's going on with the oil price.

"The oil price took a hit from rumors that a deal was close with Iran on curtailing its nuclear program, the quid pro quo of which would be easing of the oil export restrictions the US has tried to enforce since former President Donald Trump walked away from the deal in 2018," he wrote.

"The oil price had been making a recovery since late March. Global demand picked up and OPEC+ has seemingly taken a cautious stance toward increasing output."

In the near future, we may be heading for a new kind of "peak oil," he explained.

"With all that in mind, oil bulls have an argument that shortages will be a feature down the line," he wrote.

"In the past, we have talked about peak oil as a concept based on rising demand hitting resource limited supply.

"But what we could see is stagnant or slowly declining demand hitting rapidly falling supply later this decade."

We also covered oil price trends in the April 30 Commodities Roundup.

The West Texas Intermediate (WTI) crude oil price closed Wednesday at $63.36 per barrel, down $2.72 from the previous week.

USITC holds sunset review on steel nails duties

Meanwhile, in a five-year sunset review of existing anti-dumping and countervailing duties on imports of steel nails, the United States International trade Commission voted to maintain the duties, arguing revoking them would likely cause "material injury" to US industry.

The ruling covering imports of steel nails from Korea, Malaysia, Oman, Taiwan and Vietnam.

More MetalMiner is available on LinkedIn.

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