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China’s march towards carbon neutrality is forcing its aluminium smelters away from using captive coal-fired power, says Wood Mackenzie.
Wood Mackenzie’s latest report reveals that China’s march towards carbon neutrality by 2060 can complement both energy security and economic goals.
Scrap metals demand growth is expected to outpace primary metals over the next two decades. However, it will remain underutilised compared to its overall availability, says Wood Mackenzie.
More than $1 trillion of investment will be needed in key energy transition metals - aluminium, cobalt, copper, nickel and lithium - over the next 15 years just to meet the growing demands of decarbonisation, according to Wood Mackenzie. This is almost double the figure invested over the previous 15 years.
According to Wood Mackenzie's Accelerated Energy Transition (AET) scenario, which sees global warming limited to 2.5 degrees (Celsius), the battery raw materials supply chain requires much more investment by 2030.
Global emissions must reach net-zero by the second half of the century to keep global temperature rises below 2°C. Emissions from metals production will need to halve over the next 20 years in order to hit this target, according to Wood Mackenzie.
Prior to the coronavirus outbreak, peak gold supply was becoming a real possibility. Now, with exploration programmes paused or cancelled and project disruptions hampering production, the summit is in sight.
South Korea's hot metal production will decline by 4.2 Mt or almost 10% in 2020. There is of course a risk that production decline would be greater, if containment of the virus is unsuccessful.
Rio Tinto has announced it will spend $1bn to reach net zero emissions by 2050
2020 will see lead transition into a market surplus after several years of significant deficit, according to Wood Mackenzie.
Potential supply disruptions in the Gulf and West Africa are key to the outlook for aluminium in 2020, according to Wood Mackenzie.
The most important driver of the zinc market in 2020 will be the performance of the world’s zinc smelting industry, according to Wood Mackenzie.
All eyes will be on the Indonesian nickel market in 2020. The knives may be out for the country’s nascent stainless industry but the staggering potential for expansion in NPI may reduce the impact of the nickel ore export ban to a minor inconvenience. Although the global battery sector share of nickel demand is much smaller than other metals, getting the quantity of nickel that EVs will need by the mid-2020s will remain a challenge.
Gold is poised to perform strongly in 2020, with geopolitical risk set to remain elevated, according to Wood Mackenzie.
As we look to 2020, copper is faced with a finely balanced market. For now, positive investor sentiment around copper’s fundamentals is supporting higher prices.
Chinese steel demand will likely peak this year at 890 million tonnes, a growth of 1.5%, according to Wood Mackenzie. With China responsible for half of global steel demand, Chinese government policy remains core to Wood Mackenzie’s view.
Slower demand growth (especially in China) and a decent recovery in seaborne supply will continue to feature prominently in the iron ore industry in 2020. Prices will fall, with annual average price forecast for 2020 at $80/t.
US President Donald Trump has announced an increase in Section 232 tariffs on Turkish steel from 25% to 50%
Chinese president Xi Jinping’s mantra that “houses should be for living in, not for speculation” has been used to allude to the government’s policy to curb rising property prices for the past couple of years. Despite the cooling measures, steel demand in the property sector has shown resilience.
Over 650 GW of new onshore and 130 GW of new offshore wind capacity will be installed between 2018 and 2028. This will consume in excess of 5.5Mt of copper, according to a recent analysis by Wood Mackenzie.
The U.S has increased tariffs on $200bn of Chinese goods to 25%, from 10%, impacting a number of metals. Commentary below comes from the Wood Mackenzie metals team:
Implementation of IMO 2020 regulation is just eight months away and its implications will be felt beyond refining and shipping. Wood Mackenzie's Asia Pacific experts weigh in on what this means for the different sectors.
Indonesia heads to the polls on 17 April 2019. Wood Mackenzie and sister company Verisk Maplecroft discuss what this means for the energy, and mining and metals sectors.
Commenting on today's announcement from Donald Trump regarding the US' intentions to double tariffs on aluminium imports from Turkey, Wood Mackenzie Senior Research Analyst, Kamil Wlazly, said:
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