The Canadian government is investing CAD 27 million ($20.0m) in E3 Lithium and its plans to build a lithium-extraction demonstration plant in Alberta, Kallanish reports.
The grant came from Canada’s Innovation, Science and Economic Development’s Strategic Innovation Fund (SIF) and will help fund the planned CAD 87m demonstration plant. The grant was made possible through the SIF’s Net Zero Accelerator initiative.
The demonstration plant is expected to produce 20,000 tonnes/year of battery -grade lithium hydroxide monohydrate from Alberta’s depleted oilfields and would enable E3 to become a major producer of lithium in North America from the Leduc Aquifer in Alberta’s Bashaw District.
The SIF investment supports all aspects of E3’s resource and technology development including drilling, piloting of proprietary ion-exchange technology, process development and engineering including downstream lithium hydroxide conversion. The investment also supports additional development testing during the feasibility phase and the engineering and design of a definitive feasibility study.
The company will be reimbursed at 33.94% for eligible costs. The company will be required to repay the government funds if and when it earns gross revenues. The repayment will take up to 20 years.
The funding will significantly de-risk the project as the company moves toward a commercial facility, says president and ceo Chris Doornbos.
The company is developing three test wells in Alberta, to determine lithium concentrations. The first well was completed near the town of Olds, Alberta, at the centre of the company’s Clearwater Project area. It is a candidate location for the company’s first commercial operation. The other two test wells will be tested soon.
E3 Metals has developed a proprietary lithium-selective sorbent to extract lithium from brine in its direct lithium extraction process. E3 Metals has inferred resources of 24.3m t of lithium carbonate equivalent inferred resources in Alberta.
Non-Indian-origin import offers are preventing hot rolled coil price hikes in the Gulf Cooperation Council market. Numerous buyers with very low inventories booked modest tonnages last week of tubemaking and re-rolling grade HRC from Chinese, Saudi and Indian mills.
In November, re-rollers have seen improving demand from their customers abroad and their sales registered a 25-40% growth on October. This week, imported HRC prices are unchanged from last week, Kallanish notes.
In United Arab Emirates last week, after a long period of absence from the market, the major Indian mill issued its offer. It concluded a deal for a small cargo of mismatched-size HRC at $605/tonne cfr UAE for 5mm thickness S275JR grade for December shipment. The mill is offering 2mm+ re-rolling grade (SAE 1006) at around $640/t cfr GCC for December shipment, which buyers find unworkable. Other suppliers’ offers are at $585-605/t cfr for January shipment.
In UAE and Saudi Arabia, a few tubemakers booked from a Chinese mill at $620-625/t cfr GCC ports for 1.2mm thickness SPHT-1 grade for January shipment. A re-roller in UAE booked 5,000 tonnes from a GCC mill for 2mm+ SAE 1006 grade at $620/t delivered to Abu Dhabi for late-December shipment.
This week's prices are the same as last week; a Japanese HRC supplier, not typically active in the bloc, is offering base grade HRC at $580/t cfr GCC for February shipment. The bloc's well-known major Japanese supplier's negotiable initial offer for 2mm+ SAE 1006 grade is meanwhile at $600/t cfr for January shipment. Buyers say the latter has a $10-20/t margin for compromise subject to tonnage and customer classification.
Re-rolling grade HRC offers from Taiwan and the South Korean mill's Indonesian subsidiary are at $585/t cfr GCC for January shipment. Meanwhile, a Russian mill's officials, while visiting potential UAE customers, are indicating $15/t lower than market price for their material. However, buyers are showing less interest due to sanctions imposed on the Russian steelmaker's largest shareholder.
An ex-China 0.34-1.17mm cold rolled full hard (CRFH) offer was heard at around $620/t, while South Korean 0.4-2mm thickness material is at $640/t, both cfr Abu Dhabi with January and February shipment, respectively.
Meanwhile, Vietnam-based Formosa's SAE 1006 and S235JR grade HRC offers through a Hong Kong-based trading company are at around $580-585/t cfr GCC ports for January shipment. S275JR grade incurs $10/t extra.
Well-known Indian HRC suppliers to the region are quoting at $600-610/t cfr GCC ports for mid-January shipment for tubemaking and re-rolling grades.
"We know the Formosa quality through our contacts in India, and their re-rolling grade HRC is exceptionally good,” a senior downstream mill official comments. "The price increase that happened two weeks ago is not sustainable; for this reason, next week we expect $600/t cfr GCC will be the threshold for higher margins."
Metinvest’s Kametstal steelworks has temporarily stopped production due to energy shortages after new shelling by Russia.
“During the week beginning 21 November, Russian attacks resulted in power outages throughout the country,” the company says. “Metinvest, along with other industrial enterprises operating in Ukraine, was also affected, as for the first time since the start of a full-scale military invasion, production at the group's Ukrainian enterprises was stopped on an emergency basis due to a lack of electricity.”
However, power supply has been partially restored, although industrial producers use electricity within the available quotas, which can change every day, it adds.
As of 28 November, all Metinvest enterprises have resumed their activities, except for Kametstal. An assessment is being made of possible damage to production facilities resulting from the shutdown, as well as of the timing of a production restart, the enterprise claims.
According to Metinvest, a long-term absence of deliveries of square billet from Kametstal may lead to the suspension of production at its Bulgarian Promet Steel re-rolling subsidiary. “We cannot predict how long Russia's attacks on Ukraine's energy infrastructure will continue and there may also future interruptions in production,” it adds.
Ukrainian iron ore miner and pellet producer Ferrexpo has meanwhile announced that repair work has now sufficiently progressed to allow for the partial resumption of production activities at its operations in central Ukraine, the company tells Kallanish.
“The supply of power to the group's operations, however, remains variable and limited, which has an impact on the cost effectiveness of production,” a Ferrexpo spokesperson notes. “As a result, the group is currently focused on drawing down on its stockpiles of finished iron ore products to maintain supplies to its customers. The ability to utilise such stockpiles has ensured a consistent supply to customers … and we can confirm that it has sufficient stockpiles to meet customer demand.”
Ukraine's Sukha Balka mine, part of DCH Steel, has decided to temporarily shut down production processes at the Frunze mine in the face of declining production volumes, consumption of raw materials and limited supply of energy resources.
Earlier, stainless seamless pipe producer Centravis reduced capacity utilisation amid energy blackouts (see Kallanish passim).
ArcelorMittal Kryvyi Rih (AMKR) also critically limited electricity consumption and suspended most production processes.
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EU ministers are hoping to agree on “concrete solutions” to the upcoming US green subsidies exclusions when officials meet next week, Kallanish reports.
In a Trade Foreign Affairs Council (FAC) meeting on Friday, ministers expressed their “serious concerns” the US Inflation Reduction Act, to be effective in January, will discriminate against the EU automotive, renewables, battery, and energy-intensive industries. Subsidies under IRA are only available to products made in North America, including EVs.
According to the European Commissioner’s vice-president and commissioner for trade, Valdis Dombrovskis, the EU-US working groups set up last month are working hard to deliver a package of “attractive results.” Now, issues are being discussed in a joint high-level task force.
“These are no easy discussions, but they must produce concrete solutions. What we are asking for is fairness. We want and expect European companies and exports to be treated in the same way in the US as American companies and exports are treated in Europe,” he adds.
The Trade and Technology Council (TTC), formed by US and EU counterparts, will meet for the third time on 5 December in the US. The “challenge” for this next meeting is to agree on “even more tangible outcomes, both in the trade and technology pillars,” says Czech industry and trade minister Jozef Síkela.
Ministers from the Netherlands, Sweden, and Ireland warned there’s a tight timeframe to reach an agreement. Their French counterpart added that the US transition should be done on the basis of fair competition, not breaches of WTO rules. He added that if a satisfactory deal isn’t reached soon, the EU will have to consider “other measures,” although that wouldn’t include a subsidy race.
“In the current geopolitical context, and keeping in mind our shared green targets, we should be building alliances in these important sectors – be that batteries, renewable energy, or recycling,” says Dombrovskis. “The last thing we should be doing is creating unnecessary distractions or potential new disputes.”
He also warned against the danger of conflating the IRA with the broader EU relationship with the US.
“These are separate tracks,” he adds.
Approaching December trading, sentiment has turned bullish in the US scrap market amid sharp increases recorded in export destinations, Kallanish notes.
Besides exports, tightening supply is also likely to impact pricing during the December buy-cycle. Most market participants think the eight consecutive months of price decline are coming to an end. However, the extent of the rebound is still being debated, while all US market participants believe the steel market situation will determine scrap values.
On the US West Coast, the Taiwanese market followed the recovery in Turkey last week. Besides Turkey, improved steel sales contributed to the Taiwanese recovery. US-origin containerised HMS 1&2 80:20 offers are seen standing around $330-335/t cfr Taiwan, although no deal has yet been heard done in this range.
On the East Coast, price rises in Turkey continued on Monday on a fresh deal concluded from the US. A western mill bought HMS 1&2 80:20 at $360/t and bonus and shredded at $380/t cfr Turkey, for December shipment. This is up from the previous premium HMS 1&2 80:20 deal at $351/t cfr last week.
Although US suppliers are targeting even higher prices in Turkey following the latest booking, the Turkish market is questioning the viability of this given steel sales are yet to recovery satisfactorily.
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Throughout last week, both supply and demand of Chinese domestic hot rolled coil were weak, while stimulus and harsher Covid lockdown policies were offsetting each other. Chinese HRC prices thus saw negligible changes at home and overseas, Kallanish notes.
In Shanghai on Friday afternoon, 5.5x1,500mm Q235 HRC was traded at around CNY 3,850-3,870/tonne ($538-540/t), remaining unchanged week-on-week. On the Shanghai Futures Exchange, meanwhile, the most-traded, January 2023 contract for HRC gained CNY 50/t from Thursday and CNY 28/t on-week to CNY 3,835/t.
Spot prices of Chinese HRC tried to climb twice last week on the back of futures hikes, but sluggish transactions hit sentiment and rapidly erased any increases. Although production is at low levels, reduced demand due to Covid outbreaks has prevented this from pushing up steel prices.
Coking coal and coke prices were also rising and supporting steel values. However, suffering mills are not expected to accept any further cost increases and they also have little room to raise production in winter. Coke will struggle to see another round of price increases after a CNY 100/t hike was concluded last week.
A fresh daily record-high number of new confirmed Covid cases has reversed policy easing as restrictions swept through more big cities including Wuhan and Chengdu. This winter, demand is more likely to be impacted than production, preventing HRC price increases in December.
Export markets were meanwhile lacklustre. Some Chinese exporters lowered their offers after India announced the removal of steel export duties. However, more mills then chose to hold offers steady as they do not expect more buying interest at lower prices, and they want to avoid losing more money.
South American buyers recently booked some quantities of Chinese SAE 1006 HRC at around $550-560/t fob China levels. “I heard the same price level for deals totalling just hundreds of tonnes, and it is still very difficult to sell in larger volumes,” one exporter in eastern China comments.
Limited quotations for January-shipment SAE 1006 HRC were also at around the same levels on Friday. “This means $565/t for Vietnamese buyers and is absolutely not acceptable for them,” one source says.
Kallanish assessed 2mm SAE 1006 HRC at $545-555/t fob China on 25 November, remaining unchanged from the prior week.
As Indian materials re-enter the global market and Vietnamese exporters are willing to sell at lower prices to secure dollars, Chinese HRC is being squeezed out.
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Pacific Nickel says its Solomon Islands Kolosori nickel project JORC mineral resource estimate (MRE) has delivered a significant increase in contained nickel, Kallanish notes.
An updated JORC MRE shows Kolosori mineral resource stood at 9.21 million tonnes at 1.46% nickel at a 1% nickel cut off. This shows an approximately 134,000 t of contained nickel, an increase of some 21,000 t over the previously reported MRE.
The MRE also shows Kolosori has 7.08m t of nickel at 1.57% nickel at a 1.2% nickel cut off. This shows an approximately 111,000 t contained nickel, an increase of some 18,000 t over previously reported MRE.
The updated estimate compares with the previously reported JORC MRE of 6.02m t at 1.52% nickel at a 1.2% nickel cut off (approximately 93,000 t contained nickel) reported on 29 September.
The revised MRE provides an increase of 17% in total mineral resource tonnages and a 3% increase in nickel grades above the 1.2% nickel cut-off for an approximate 20% increase in contained nickel.
Further drilling is planned in 2023 to further upgrade inferred resources and to test extensions to the current deposits.
“The increase in resource combined with the revised exploration target and noting that the production is based on wet metric tonnes gives us a clear indication that we are looking at a materially increased mine life for the Kolosori project,” Pacific Nickel chief executive officer Geoff Hiller says. “We look forward to re-establishing a regional exploration program in 2023 to further expand the Kolosori resource base."
He also says the increased grade and tonnage details are now being factored into the definitive feasibility study, due for release in December.
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