TELF AG Market Roundup 2024 Week 12
Energy & Freight
Following the tumultuous disruptions caused by the COVID-19 pandemic, major shipping lines are experiencing a gradual return to pre-pandemic profitability levels. Despite ongoing geopolitical uncertainties, the profitability margin is improving, albeit with fluctuations. In the fiscal year 2023, all major shipping lines witnessed a significant year-on-year revenue decline, ranging between -46.6% and -62.6%. However, the annualized revenue growth rate in 2023 aligns with the figures recorded during the pre-pandemic period of 2018-2019.
Ferroalloys Market
China: Recent developments in China’s ferroalloys market have reverberated globally. Tsingshan’s decision to hike its monthly ferrochrome tender price by 500 yuan per metric ton to 8,995 yuan ($1,248) for April deliveries has sparked a surge in market sentiment. This unexpected move prompted a notable uptick in domestic ferrochrome prices for the first time since December 19. Additionally, imported charge chrome prices experienced an increase, driven by both the tender price hike and higher indications from buyers and sellers. However, concerns linger over the sustainability of the upward price trend, especially amid declining demand and prices in the stainless steel (STS) market.
Europe and USA: Stability characterizes the high-carbon ferrochrome markets in Europe and the United States. Despite some debate over the availability of cheaper material slightly outside specifications at lower prices, high production costs, and supply tightness due to recent furnace closures provide support to prices, particularly in the lower-grade market segments.
Bulk Ferroalloys & Steel
EU Critical Raw Materials Act: The EU Council’s approval of the Critical Raw Materials Act aims to secure the sustainable supply of 34 critical raw materials essential for various sectors, including steel production. This policy initiative seeks to reduce dependence on external sources, particularly China, and stimulate local production, processing, and recycling. By 2030, the EU aims to have at least 10% of these critical materials locally extracted, 40% processed within the EU, and 25% sourced from recycled materials.
Steel Production: Germany’s steel production landscape exhibits signs of stabilization and incremental growth. In February 2024, German steel enterprises notably increased steel production by 4.4% compared to the same month in 2023, reaching 3.12 million tons. This marked a 1.8% rise from the previous month, indicating a positive trajectory. Blast furnace (BF) and electric arc furnace (EAF) routes experienced production increases, reflecting resilience amid high electricity costs and economic downturns.
Base Metals
Copper Sector: The copper sector is grappling with various challenges and opportunities. Chinese copper smelters, including Jiangxi Copper Co. and Tongling Nonferrous Metals Group Co., are set to convene in Shanghai to address plummeting processing fees, threatening profitability. Concurrently, Antofagasta is securing project financing to expand its Centinela mine in Chile. This expansion project aims to enhance copper production by adding 170,000 tons per year of copper-equivalent production, comprising copper, molybdenum, and gold by-products.
Battery Metals
EV Industry: Amid the burgeoning demand for electric vehicles (EVs), key players in the automotive and battery sectors are making significant investments to capitalize on this transformative trend. Toyota announced plans to invest a further $1.3 billion into its Georgetown vehicle manufacturing plant in Kentucky, underscoring its commitment to hybrid and electric vehicle production. Similarly, LG Energy Solution’s five-year supply agreement with Changzhou Liyuan for cathode materials reflects the growing demand for cost-effective EV solutions and battery energy storage systems.
