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Fastmarkets predicts that China will surpass Australia by 2026 as the world's largest lithium miner.
Fastmarkets has forecast that China will surpass Australia by the end of next year as the top producer of lithium for battery use. Its market dominance is also expected to increase through 2035, even though many Chinese producers are still unprofitable. These projections highlight Beijing's dominance in the global metals industry. China is the largest miner and refiner of over half the minerals deemed critical by the U.S. Geological Survey. Paul Lusty said, "China has a very specific strategy for developing its mineral resources" on the sidelines at the Fastmarkets Lithium and Battery Raw Materials Conference, held in Las Vegas. Since taking over the top spot from Chile, Australia is now the largest lithium producer in world. However, Australian miners have cut back on production or delayed expansions due to a drop in global lithium prices. Fastmarkets estimates that Chinese miners will likely extract between 8,000 and 10,000 more metric tonnes of lithium next year than their Australian counterparts. This would be a significant jump from 2023 when China was the third largest lithium producer in the world. According to forecasts, Chinese miners will likely extract 900,000.00 metric tonnes of lithium by 2035. This compares to Australia's 680,000.000 metric tonnage, Chile's 435,000.000 tonnage, and Argentina's 380.000.000 tonnage. China's growth is largely due to the mining of lepidolite ore, a hard rock ore that is abundant in the south of the country. Lepidolite mining in China is more expensive than lithium extraction from brines of salt. It can also cause greater environmental damage due to toxic byproducts like thallium or tantalum, which pollute water sources. China's miners of lithium have resisted cutting production because they are supported by the Chinese government and "pressured" to keep their operations open, thus preserving local jobs. They also want to maintain a market share, as the demand for the metal is increasing, Lusty explained. He said: "This continued production, despite the lackluster profitability in the market, starts to make more sense when you take all these factors into consideration." Chinese battery giant CATL, one of the world's largest lepidolite producers, paused production in a major mine last September and resumed output in February. China has held a 70% share of the global ultralight metal market for many years, despite its mining. The metal is refined into a form which can be used in batteries. Fastmarkets predicts that other countries' efforts to increase their own lithium refinery will reduce China's share of the market to 60% by 2035. According to LG Energy Solutions, China is also a leader in the electric vehicle industry. More than 60% of all EVs sold globally last year were produced there. (Reporting and editing by Leslie Adler; Ernest Scheyder)
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US announces new policy for offshore mineral exploration
The U.S. administration of President Donald Trump announced Wednesday policy changes that it claimed would accelerate the search and exploration for critical minerals offshore. The Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement update policies at all stages of the development process to "reduce delay, improve coordination and give greater certainty to industry", according the U.S. Interior Department released a statement. Why it's important The Trump administration is working to reshape a vital mineral industry that has been dominated by China - the U.S.'s top economic rival. The Interior Department's policy update follows an April executive order from Trump aimed at improving U.S. accessibility to critical minerals such as nickel, copper, and others. DETAILS Interior Department stated that BOEM plans to extend early-stage permits from three to five years. The administration will reduce "unnecessary compliance and paperwork steps" in order to expedite approvals for mapping and testing. BOEM will identify potential areas for development, without issuing an official request for information. The department also said that it would form a task force in conjunction with federal and state agencies to accelerate the leasing process. The U.S. Geological Survey is providing the Bureaus with scientific data about critical mineral resources as well as environmental impacts and hazards related to seafloor development. Ismail Shakil, Ottawa; Ed Osmond, Ottawa.
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Germany's retail and industrial sectors, as well as the energy sector, criticise the power subsidy plan
On Wednesday, representatives of the energy, retail and industrial sectors criticised Germany's plan for a reduction in electricity tax. They warned that it could have a limited impact and distort the competition. The average electricity price in Germany is 38 cents per kilowatt hour, which ranks fifth in the world. In early this year, the ruling coalition in Germany of conservatives (conservatives) and social democrats (social democrats) agreed to reduce electricity tax for all consumers to the European Minimum. The Finance Ministry's framework budget for the year 2026, which was presented on Tuesday, limited the relief planned to the industries of agriculture, forestry and industry. It excluded many consumers and companies, citing financial problems. The first dispute since the CDU/CSU and SPD took over government last month is the disagreement between the parties about the size of the subsidy. Alexander von Preen of HDE, the head of trade association, stated that "by breaching the coalition agreement the government has thrown away the trust of business and torn the rug from underneath companies." Sepp Mueller, deputy leader of CDU/CSU's conservative parliamentary group, stated that reducing the cost of electricity for all remained the goal of the party. Mueller said, "Now we need to discuss quickly when we can implement it." The German Chamber of Industry and Commerce said that the reductions were a slap on the face to many companies, as the government sold the scheme as a quick fix. Peter Adrian, DIHK's President, said: "Nobody understands why this small but important relief, which is already possible, should not be available, despite planned debt records." Katherina Reiche, Germany's Economy Minister, said on Wednesday that the country will present a concrete idea for a price of industrial electricity after the European Union implemented a new framework for state aids which would allow such subsidies. BDEW, the German utilities lobby, also warned about market distortions as well as a slowdown of renewable energy expansion. The BDI association says that the limited scope and many restrictions of this measure leaves too little room for lowering electricity prices to a level where they are internationally competitive. The ZDH Central Association of Skilled Crafts stated that an industrial electricity rate would distort the competition and harm small and medium-sized businesses. These companies must also co-finance these reliefs. (Reporting and editing by Ed Osmond, Holger Hansen and Christian Kraemer)
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Cutifani, Chair of Vale Base Metals, to step down. Pimenta will take over.
According to a filing with the Brazilian Securities Commission, Vale announced on Wednesday that Mark Cutifani would step down as Chairman of its copper-nickel spinoff Vale Base Metals in order to "pursue professional projects." The company announced that Vale CEO Gustavo Pimenta would replace him in July. This will "ensure strong leadership and alignment with Vale’s broader strategic goals" within the business. Vale, the iron ore giant, spun off its base metals division as a separate company with headquarters in Toronto by 2023. The goal is to eventually list it. Cutifani, who was chief executive of London-listed Anglo American for nearly a decade, until 2022, won plaudits. Cutifani stated in a press release that "we thought it would take two to three years to set them up (Vale Base Metals)," for an IPO. Since then, we have seen a 40% rise in productivity and a 20 percent reduction in costs. "Gustavo... is the one who will make the final decision as to whether and when to IPO," he said, without commenting about his new professional endeavors. Cutifani resigns just months after Shaun Usmar, a veteran mining executive, was appointed as CEO of Vale Base Metals. Marina Calero, an analyst at RBC Capital Markets, said: "The elephant in VBM's room is the timing for an IPO. We do not expect it to happen anytime soon."
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JSW Steel petitions India's highest court to review the Bhushan Power collapse.
JSW Steel, an Indian steelmaker, said it filed a review application before India's highest court on Wednesday in relation to the rejection by the court of its $2.3 billion acquisition plan of Bhushan Power and Steel. The Supreme Court of India, in its ruling on the resolution plan for JSW Steel to acquire BPSL, ordered the liquidation of the company four years after it was acquired. The court halted liquidation proceedings on May 26 after JSW Steel, and some BPSL creditors informed the Supreme Court they would be filing a review against the order. The court said the liquidation proceedings would continue until a petition for review is submitted and considered. Reports in May stated that the collapse of the deal has caused concern among potential buyers of distressed assets. Many lawyers and bankruptcy law specialists have said the ruling has caused concern to potential buyers of insolvent firms or bankrupt companies. JSW Steel said that the Supreme Court had cited serious procedural errors as a reason for its ruling. The company said that the order had no impact on them. (Reporting and editing by Shash Kuber in Bengaluru, Manvi Pant)
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EIA: US crude and fuel inventory falls due to higher demand
Energy Information Administration (EIA), a government agency, reported on Wednesday that crude oil and fuel stocks in the United States fell last week due to increased refining and demand. The EIA reported that crude inventories dropped by 5.8 millions barrels, to 415.1 million in the week ended June 20. This was more than analysts expected in a poll. The EIA reported that crude stocks at Cushing, Oklahoma's delivery hub, fell by 464,000 barils in the past week. This week's report is all about supply and demand. The market is likely to stabilize following all of the geopolitical news reports if there's a significant drawdown in stockpiles. The decline in oil stocks was larger than expected. Oil prices increased. Brent crude futures traded at $67.97 per barrel by 10:55 am EDT (1455 GMT), up 83 cents. U.S. West Texas Intermediate (WTI) crude rose 90 cents to reach $65.27. The EIA reported that refinery crude runs had increased by 125,000 barrels a day. Utilization rates also rose, rising by 1.5 percentage points, to 94.7%, their highest level since July 20,24. The gasoline stock fell by 2.1m barrels and now stands at 227.9m barrels. This is also higher than the analysts' expectation of a 381,000 barrel build. The gasoline supply, which is a proxy of demand, increased 389,000 barrels per day (bpd) last week, to 9,7 million bpd. This was the highest level since December 2021. The data revealed that distillate stocks, which includes diesel and heating oil fell by 4.1 millions barrels to 105.3million barrels. This was in contrast to forecasts of a 410,000 barrel increase. The EIA reported that net U.S. crude oil imports increased last week by 531,000 barrels per day. (Editing by Margueritachoy)
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A2A, an Italian company, links district heating to warmth generated in data centres
BRESCIA (Italy), June 25, 2018 - Italian utility A2A, and French tech company Qarnot inaugurated on Wednesday a data center in Italy which aims to capture the waste heat from computers servers and direct it into a local heating network. The facility is located in Brescia in northern Italy and uses liquid cooling technology. The rapid expansion of data centers, and the increasing electrification in consumption, require large investments in electricity grids. Data centers offer an opportunity to cities that have district heating networks, said A2A CEO Renato mazzoncini at the inauguration. Brescia is expected to provide heating for more than 1,350 homes and reduce carbon dioxide emissions by 3,500 tonnes annually, which is equivalent to the capacity of 22,000 trees to absorb CO2. Mazzoncini said that "in (the Italian region) Lombardy, alone, we estimate 150,000 apartments can be heated in this way", Mazzoncini added. The project aims to address the global challenge of managing digital infrastructure that is becoming increasingly energy-intensive. Qarnot wants to increase its presence in Italy, as a high-performance computing service provider. (Reporting Giancarlo Navach. Mark Potter edited the story.
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Brazil increases the mandated level for ethanol and biodiesel in Brazil, Energy Ministry says
According to Pietro Mendes of the Mines and Energy Ministry, the National Energy Policy Council of Brazil (CNPE) approved on Wednesday increasing the percentage of ethanol in gasoline from 27% to 30% and the amount biodiesel to diesel from 14% to 15%. Mendes stated that the changes in fuel mixtures will be effective from August 1. Before This year The CNPE has decided to keep the biodiesel mix at 14%, despite industry groups' objections. Brazil's Ministry of Mines and Energy said in March that increasing the percentage of gasoline from 27% to 30% was a good idea Tests are a good way to back up your claims demonstrating "consistent performance", "real environmental impact" benefits." The International Energy Agency states that biofuels such as ethanol and biodiesel are important in decarbonizing global transport and reducing greenhouse gas emissions linked to burning nonrenewable fuels. Reporting by Ana Mano, Pedro Fonseca and Oliver Griffin Writing by Margueritachoy
US foreign investment slump: anomaly or warning? McGeever
The 'dedollarization' debate has largely focused on the foreign exposure of U.S. stocks and bonds. Investors shouldn't ignore the foreign direct investment flows. This is the traditional sticky capital which may be sending out warning signs.
Foreign direct investment (FDI), is when an overseas entity purchases the assets or increases its holdings of a foreign company. This can be done by purchasing machinery, plants, or a controlling interest. FDI, therefore, is a more stable investment than portfolio flows.
Donald Trump, the U.S. president, says that he has brought record-breaking foreign investment to his country. The White House website has a "non comprehensive running list" of new U.S. investments since Trump began his second term. The total running is in the trillions and includes pledges made by several foreign countries.
The United Arab Emirates (UAE), Qatar, Japan, and Saudi Arabia have all pledged more than $4 trillion of investments in the United States. Trump said during his trip to the Middle East in the last month that the U.S. was on track to receive $12-13 trillion in investments from around the world. This includes "projects... mostly announced...and some to be revealed very soon."
In time, these flows will be revealed in their entirety. Official figures released on Tuesday revealed that FDI fell to $52.8 Billion in the first three months, the lowest level since the fourth quarter 2022. This is well below the average quarterly figures of the last 10 and 20 year.
Commerce Department figures showed that U.S. current-account deficit widened in the third quarter to a record $450,2 billion, or 6%, of U.S. Gross Domestic Product. FDI inflows only covered 10% of this shortfall.
Should the Trump Administration be concerned?
Tariff Distortions
The short answer to this question is most likely not, or at least not just yet.
FDI flows tend to be smaller than portfolio investments in equity and fixed-income securities. Therefore, from the perspective of funding a current account deficit, FDI declines are not as concerning.
If foreign investors also buy fewer U.S. Securities, then capital will need to be raised from somewhere else to cover the deficit.
Additionally, the balance of payments in America in the first quarter were distorted because domestic consumers and business leaders rushed to import goods before Trump's tariffs kicked in later in the year.
Trump is betting that the deficit will shrink in this year and beyond, as his "America First" policies encourage more "onshoring", as domestic firms bring production home. The weaker dollar also helps U.S. Manufacturing by making exports competitive. The boom that follows will bring in investment from both companies and governments abroad. Theoretically.
These dynamics are not only one-sided.
Citi estimates that the European Union will account for 45% in 2023 of all U.S. FDI. Combining the European continent's German fiscal splurge with U.S. Tariffs and concerns about 'dedollarization' could easily reduce that flow.
Section 899, a possible tax of 20% or more on foreigners' U.S. earnings that could be included in Trump's budget plan, is another potential risk for U.S. bound FDI. Tax Foundation reported in May that Section 899 "would hit inbound investment that makes up more than 80% of U.S. FDI inbound stock."
Section 899 may be diluted by industry pushback, but it still remains a cloud over U.S. investments.
Citi reports that the U.S. will be the largest recipient of FDI in the world by 2023. This is up from 15% just before the pandemic. Its economy is one of the biggest in the world. It's a hub for innovation, cutting-edge technology, artificial intelligence, and money making potential.
This will always attract FDI. It remains to be determined whether it will attract as much FDI in the new environment.
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(source: Reuters)