Battery Metals

Copper prices hit seven-week highs on Thursday as the dollar slipped after the U.S. central bank signalled further interest rate rises could be shelved, but gains were capped by shrinking activity in China’s manufacturing sector. Benchmark copper on the London Metal Exchange ended up 0.5 percent at $6,169 a tonne. Earlier the metal, used widely in power and construction, touched $6,199 a tonne, its highest since Dec. 13. “Copper will ultimately be driven by economic and industrial production growth in China, where lead indicators like credit growth and capital investment are slowing,” said Liberum analyst Richard Knights.

RATES: The Federal Reserve left interest rates unchanged on Wednesday and discarded its promises of “further gradual increases”. Fed Chairman Jerome Powell said the case for rate rises had “weakened” in recent weeks. That weighed on the U.S. currency, which when it falls makes dollar-denominated assets cheaper for holders of other currencies. CHINA: China’s manufacturing sector contracted for the second straight month in January. Even with government efforts to spur activity, concerns are growing that China may be at risk of a sharper-than-expected slowdown if the trade war with the United States drags on. DEMAND: China accounts for nearly half of global copper consumption estimated at around 24 million tonnes this year. GROWTH: China’s economy grew at the weakest pace in nearly three decades last year due to weak domestic demand and the trade dispute with the United States. WARRANTS: Copper has also been helped by worries about a tight LME market as cancelled warrants – metal earmarked for delivery from LME registered warehouses – at 44,125 tonnes make up nearly 30 percent of total stocks. NICKEL: Prices of the stainless steel material were up 1.0 percent at $12,480 a tonne from an earlier three-month high at $12,515 a tonne. Its rise has been fuelled by falling LME stocks and worries about disrupted supply from Brazil’s Vale . But the discount for the cash contract against the three-month at nearly $70 a tonne indicates the market is not concerned about nearby supplies. ZINC: Prices of the metal used to galvanise steel gained 1.2 percent to $2,718 a tonne. Earlier, it touched a seven-month high at $2,737, partly due to concerns about falling supply from China due to an environmental crackdown.

ELECTRIC VEHICLE makers are partnering with nickel miners and processors to explore possible joint development of batteries to help bring down the cost of e-tricycles and e-jeeps.

“If [the battery is] locally manufactured, it might lower the cost because the supply chain is here. But there’s a probability that it would lower the cost,” Edmund A. Araga, president of the Electric Vehicles Association of the Philippines (EVAP), told reporters on Wednesday.

He made the statement after his group tied up with the Philippine Nickel Industry Association (PNIA) to support “The Nickel Initiative 2019,” a pioneering event next month that gathers, among others, the consumers and producers of nickel.

“Just to give you some details, the battery is about half the cost of each e-vehicle,” he said.

Mr. Araga said the development of battery manufacturing is crucial for the Philippines at a time of increased adoption of the e-vehicles and the government’s public utility vehicle modernization program.

He said as of last year, about 7,000 e-vehicles were registered with the Land Transportation Office (LTO), although the count included e-trikes that had been distributed. He was referring to the program funded by the Asian Development Bank that was scaled down because the expensive units failed to attract buyers.

This year, Mr. Araga said he expects e-vehicle sales to reach a conservative estimate of “more than around 12,000.”

“We already have e-vehicle manufacturing, but battery manufacturing is the only thing lacking.

The infrastructure on the batteries has to level up,” he said.

In a news conference ahead of the event next month, Clarence J. Pimentel Jr., chairman of The Nickel Initiative, said most lithium-ion batteries for e-vehicles now rely on nickel.

Aside from EVAP, the European Chamber of Commerce of the Philippines (ECCP) has also joined the nickel industry to support the event.

Florian Gottein, ECCP executive director, said many European car manufacturers are looking to e-vehicles and that they are “radically” changing their models in the next couple of years.

“So I think there’s a huge demand. Currently, I think the big question also with those companies in Europe is where do we source the batteries from. And I think that’s definitely a chance for this country and also for us here,” he said, adding that bringing industry players together is an important step in the right direction.

ECCP, which has close to 800 members, is a foreign chamber that promotes European interests in the Philippines. It offers a business network that promises to help its members realize business opportunities.

The Nickel Initiative conference, which takes place on March 18 to 19, will tackle issues that cut across the industries involved in the nickel supply chain, its inter-relationships and potential areas for collaboration.

“The Philippines is the world’s second-largest supplier of nickel ore and as such, it is imperative that we take the lead in discussing the future of nickel consumption and on how we can make it sustainable and collaborative so that it can drive further development not just here in the Philippines but globally,” said Dante R. Bravo, president of PNIA.

Inkjet-printed switches make multiple frequency bands easier and cheaper to manage in wireless devices.

Frequency-tunable communication modules, such as antennas and filters, are expected to help miniaturize wireless devices. Researchers at KAUST have created switches that enable control over these modules in response to stimuli.

Mobile devices to support multiple standards, such as a global positioning system and a global system for mobile communications, require antennas that are capable of covering several frequency bands. “Radio-frequency switches are the key to realizing cost- and space-saving frequency-tunable antennas and filters,” says Ph.D. student Shuai Yang, who worked on the project with his supervisor Atif Shamim.

Commercially available radio-frequency switches have performance limitations and involve convoluted fabrication approaches that require expensive materials and tools.

Now, Shamim’s team has developed a cost-effective inkjet printing method to generate switches. “Just as for newsprint, the cost of printed electronics is extremely low,” says post-doctoral fellow, Mohammad Vaseem, who is also an author on the paper. The switches consisted of thermally and electrically responsive single layers of vanadium dioxide.

The researchers synthesized vanadium-dioxide nanoparticles with a specific crystal arrangement to create the desired ink. They printed two different switch configurations that could be triggered thermally and electrically. The performance of these switches was comparable to their nonprinted analogues, but at much lower cost.

As a proof-of-concept experiment, the team incorporated the switch in a tunable antenna printed on a flexible substrate. At room temperature, the antenna could work in the range corresponding to future 5G communications. When heated, the switch allowed the antenna to operate in the WiFi and Bluetooth range.

“When fully printed electronics become mature for industrialization, our switch will be useful for mass-producing smartphones and other wireless devices,” says Yang.

In preparation for these developments, the team is building an accurate switch model for computer simulations. “We are also working on improving the performance of the switch,” adds Vaseem.

A decade ago, scientists noticed something very strange happening when buckyballs — soccer ball shaped carbon molecules — were dumped onto a certain type of multilayer graphene, a flat carbon nanomaterial. Rather than rolling around randomly like marbles on a hardwood floor, the buckyballs spontaneously assembled into single-file chains that stretched across the graphene surface.

Now, researchers from Brown University’s School of Engineering have explained how the phenomenon works, and that explanation could pave the way for a new type of controlled molecular self-assembly. In a paper published in Proceedings of the Royal Society A, the Brown team shows that tiny, electrically charged crinkles in graphene sheets can interact with molecules on the surface, arranging those molecules in electric fields along the paths of the crinkles.

“What we show is that crinkles can be used to create ‘molecular zippers’ that can hold molecules onto a graphene surface in linear arrays,” said Kyung-Suk Kim, director of the Center for Advanced Materials Research in Brown’s Institute for Molecular and Nanoscale Innovation and the study’s senior author. “This linear arrangement is something that people in physics and chemistry really want because it makes molecules much easier to manipulate and study.”

The new paper is a follow-up to earlier research by Kim’s team. In that first paper, they described how gently squeezing sheets of layered graphene from the side causes it to deform in a peculiar way. Rather than forming gently sloping wrinkles like you might find in a rug that’s been scrunched against a wall, the compressed graphene forms pointy saw-tooth crinkles across the surface. They form, Kim’s research showed, because the arrangement of electrons in the graphene lattice causes the curvature of a wrinkle to localize along a sharp line. The crinkles are also electrically polarized, with crinkle peaks carrying a strong negative charge and valleys carrying a positive charge.

Kim and his team thought the electrical charges along the crinkles might explain the strange behavior of the buckyballs, partly because the type of multilayer graphene used in the original buckyball experiments was HOPG, a type of graphene that naturally forms crinkles when it’s produced. But the team needed to show definitely that the charge created by the crinkles could interact with external molecules on the graphene’s surface. That’s what the researchers were able to do in this new paper.

Their analysis using density functional theory, a quantum mechanical model of how electrons are arranged in a material, predicted that positively charged crinkle valleys should create an electrical polarization in the otherwise electrically neutral buckyballs. That polarization should cause buckyballs to line up, each in the same orientation relative to each other and spaced around two nanometers apart.

Those theoretical predictions match closely the results of the original buckyball experiments as well as repeat experiments newly reported by Kim and his team. The close agreement between theory and experiment helps confirm that graphene crinkles can indeed be used to direct molecular self-assembly, not only with buckyballs but potentially with other molecules as well.

Kim says that this molecular zippering capability could have many potential applications, particularly in studying biomolecules like DNA and RNA. For example, if DNA molecules can be stretched out linearly, it could be sequenced more quickly and easily. Kim and his team are currently working to see if this is possible.

“There’s a lot of potential here to take advantage of crinkling and the interesting electrical properties they produce,” Kim said.

Kim’s co-authors on the paper were Mrityunjay Kothari, Moon-Hyun Cha and Victor Lefevre. The work was supported by the National Science Foundation (CMMI-1462785 and 1563591).

China set a new record last year in terms of how much copper it sucked in from the rest of the world.

Imports of refined metal reached 3.75 million tonnes, up 16 percent from 2017 and eclipsing the previous high of 3.68 million tonnes registered in 2015.

New smelting and refining capacity continues to be built and there was no shortage of mined concentrates to feed it last year thanks to a robust performance by the world’s copper mines.

China also imported more copper concentrates than ever before, close to 20 million tonnes in gross weight terms.

In part, the explanation for China’s increased call on units from the rest of the world is one of simple restocking after relatively weak imports in 2017.

In part, however, it’s also down to scrap, the often overlooked component of the copper supply chain.

Copper scrap imports slumped last year as Beijing tightened purity rules on the type of material it is prepared to accept, part of a broader campaign against “foreign waste”.

And with more rule changes coming this year, scrap will remain the wild card in China’s copper import picture.

SCRAP DISRUPTION

Imports of copper scrap fell by 32 percent to 2.4 million tonnes gross weight in 2018, the lowest headline figure this century.

This was by no means unexpected.

China had flagged in advance its intention to ban imports of what it calls Category 7 scrap at the end of last year.

Category 7 scrap covers a broad spectrum of materials. Much of it, such as radiators and engine motors, needs to be physically disassembled before the metal can be extracted. All of it is relatively low-grade, typically containing below 70 percent copper and often a lot less than that.

Although the ban kicked in only at the end of the year, import restrictions and tighter regulatory oversight began with the first round of 2018 import licenses.

A step-change in the sort of scrap entering China quickly became evident. Average copper content jumped from 42 percent in 2017 to around 60 percent last year, according to analysts at Refinitiv.

On paper, last year’s year-on-year change in terms of how much copper was contained in China’s scrap imports was marginal.

In the real world, however, the clampdown on Category 7 flows caused significant supply-chain disruption, which was compounded by China’s imposition of tariffs on imports of scrap from the United States, a key source of higher-purity material.

Scrap has a double impact on the refined metal segment of the copper market. It is used both to make new metal via secondary refining and as a direct-melt input into first-stage processing into copper products.

Analysts at Barclays Capital, citing research by Wood Mackenzie, note that while total copper consumption increased by 2 percent last year in China, demand for refined metal rose by 5 percent.

“This implies a decline in scrap consumption in the semis industry of close to 300,000 tonnes,” according to Barclays. (“Metals Magnifier”, Jan. 24, 2019).

The follow-through inference is that Chinese consumers built stocks of both refined and scrap copper to cushion the impact of the scrap rule changes.

That accentuated a broader cyclical stocks build that followed a year of destock in 2017. Imports of 3.2 million tonnes of refined copper that year were the lowest since 2013.

MORE DISRUPTION IN 2019

The scrap disruption effect is only going to intensify this year.

Beijing has moved imports of higher-quality Category 6 copper scrap to the “restricted” list of commodity imports effective July 2019.

They are not yet banned, and there are even hopes that the highest-quality material might still be exempted, but quotas, restrictions and tougher inspections start applying in six months’ time.

Most analysts expect a preemptive surge of Category 6 scrap to enter China ahead of the July deadline. This is what happened with Category 7 material, imports from countries such as the Philippines and Thailand accelerating in 2017 as importers rushed to beat the clock.

Not everyone agrees, however.

Analysts at research house Roskill argue that such a surge is “unlikely”. (“Copper: Chinese copper scrap consumers boost imports in December ahead of new restrictions”, Jan. 28, 2019).

Firstly, there is the problem of the extra tariffs on copper scrap from the United States, the single biggest source of high-purity material in the first half of 2018.

Imports from the United States unsurprisingly slumped over the second half of the year and despite a small bounce in December seem unlikely to recover to pre-tariff levels any time soon.

Moreover, Roskill argues that Chinese customs’ current inspection focus on transshipments reduces the potential for U.S. scrap to enter China indirectly via Hong Kong.

Secondly, the global recycling industry is still reacting to last year’s Category 7 restrictions by building new shredding and granulation capacity.

The lead time on such investment, typically two to four years, “means that the international recycling industry has no chance of being ready for the start of (new) restrictions in July 2019”.

The pace of Chinese scrap regulation, in other words, is running ahead of the rest of the world’s ability to adapt.

Scrap is once again the known unknown in the bigger Chinese copper import picture.

If the consensus about a preemptive rush to get scrap into China ahead of July is right, it implies a softening in demand for copper in other forms, whether concentrates as feed for refineries, or refined copper at the semi-manufacturing stage of the supply chain.

However, if Roskill is right, Chinese demand for both concentrates and refined metal will be stronger than expected.

Only time will tell.

And talking of timing.

China’s crackdown on “foreign waste” isn’t stopping any time soon. Beijing is proposing a ban on all scrap of less than 99 percent purity at the end of 2020.

No one in the recycling industry thinks that is realistic. However, given the speed and scale of rule changes over the last two years, no one should doubt Beijing’s ability to disrupt further global copper scrap flows.

Nickel prices rose to a three-month high on Wednesday as investors worried that one of the world’s largest producers, Brazilian miner Vale , could curtail supply in an already tight market. Benchmark nickel on the London Metal Exchange (LME) closed up 1.9 percent at $12,350 a tonne.

The stainless steel ingredient hit more than two-year lows on Jan. 2 as concerns over slowing economic growth in China cut demand expectations, but it has since rallied around 17 percent as supply deficits reduce exchange inventories.

Iron ore and nickel producer Vale on Wednesday said it would sacrifice production for safety after a tailings dam burst in Brazil last week, killing at least 84 people. The news pushed Chinese iron ore futures to their highest in nearly 17 months and stirred the nickel market. “There is a bit of concern that there could be some impact on Vale’s nickel assets,” Deutsche Bank analyst Nick Snowdon said.

But it was unclear what, if any, effect there would be on Vale’s nickel output, Snowdon said, adding he expected supply shortfalls both this year and in 2020 and nickel prices around current levels were justified.

Vale produced 288,200 tonnes of nickel in 2017, around 14 percent of total global output, of which around 25,000 tonnes is mined in Brazil.

NICKEL STOCKS: At 202,032 tonnes inventories of nickel in LME-registered warehouses are down from around 370,000 tonnes at the start of 2018 and near the lowest since 2013. SPREADS: Suggesting that availability of nearby metal is tightening, the discount of cash nickel compared to the three month contract has shrunk from around $95 a tonne in July to around $60. WARRANTS: One entity holds between 50 and 79 percent of LME nickel warrants, increasing concerns over short supplies. TRADE TALKS: The United States and China launch a critical round of trade talks on Wednesday amid deep differences that will make it difficult to reach a deal before a March 2 U.S. tariff hike. NORILSK: Russia’s Norilsk Nickel said on Wednesday its output of nickel from Russian raw material would increase in 2019 to 220,000-225,000 tonnes from 216,856 tonnes in 2018. COPPER: LME copper ended up 1.4 percent at $6,136 a tonne after 12,500 tonnes of cancellations cut on-warrant stocks in LME-warehouses to 104,950 tonnes, reversing recent gains and pushing levels towards October’s 13-year low of 56,650 tonnes. OTHER METALS: Aluminium finished up 0.8 percent at $1,909.50 a tonne, zinc closed 1.1 percent higher at $2,686, lead gained 0.7 percent to $2,090 and tin rose 0.6 percent to $20,800.