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Metal Miner

Metal Miner

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Battery Metal Prices Slide Sideways

  • Industrial metals are facing headwinds.
  • Battery metal prices have not faced the same downward pressure as some other metals.
  • The rise in electric vehicle demand has helped prop up battery metal prices.
BatteryMetals

Via AG Metal Miner

The December Renewables MMI (Monthly MetalMiner Index) traded sideways, practically in a straight line. Overall, metal prices within the index only dropped 0.83%. This sideways trend contrasts sharply with the steep drop renewables saw just six months ago.

Battery metals within the index, such as cobalt and silicon, held a steady sideways trend, only rising or dropping slightly. However, steel plate dropped both domestically and globally, with the only exception being Japanese steel plate. In general, the index appears pushed and pulled in different directions. This is largely due to the changing demand and supply of the various metals under the renewables umbrella.

While battery metals are likely to persevere thanks to the global push for things like EVs, steel plate’s future remains less certain. Indeed, zero-COVID continues to significantly impact metal prices as a whole, including steel plate.

Renewable Resources: Chinese Solar Panel Concerns Impacting Metal Prices?

The US Department of Commerce recently investigated a potential issue with Chinese solar panel trading. According to an article on the topic, the DOC concluded that four of the eight Chinese solar panel companies under US investigation are “attempting to bypass US duties by doing minor processing in one of the Southeast Asian countries before shipping to the United States.” 

If this is true, it represents a violation of US trade laws and could warrant repercussions. However, this would cause problems. For starters, most US solar panels come from China. It’s true that new manufacturers are cropping up around the US for internal solar panel production. Unfortunately, this isn’t enough to meet the current domestic demand.

Further complicating matters is the fact that most silicon reserves sit within Chinese borders. Silicon makes up 95% of a solar panel’s body. That said, the US itself lies within the top 5 countries in the world in terms of silicon production. So the possibility of directing traffic away from China exists, but it will be slow going. In many ways, this is not unlike searching for rare earth sources outside of China, which is a topic MetalMiner discussed earlier this week.

Metal Prices: Cobalt Declined in the Short-Term, but Moved Sideways in the Long-Term

Since Q2 of 2022, cobalt prices have declined slightly month-over-month. Despite this, cobalt remains in a steady sideways trend. Demand steadily grew over the past few years. This has a lot to do with the easing of COVID restrictions within China. MetalMiner currently anticipates that cobalt will enjoy a distinct advantage over other declining metals. In our opinion, this is due to the consistent high demand for cobalt in consumer electronics.

With much of the world’s cobalt supply coming out of the Democratic Republic of the Congo, the central African nation is now in the international cobalt spotlight. China, for instance, has its eye on DRC for this exact reason. Recently, an article highlighted North Mining Limited, part of the Norinco Conglomerate, currently controls cobalt mining initiatives within DRC remotely from Beijing. This means that China could be trying to dominate the growing battery metal market. With heavy demand for cobalt and other metals used for things like EV batteries and electroplating, this could give China firm control over the global cobalt market.

As China attempts to get a lucrative hold on the green energy movement, MetalMiner anticipates the strong demand for cobalt will continue. However, the uncertainty regarding when zero-COVID restrictions will ease continue to impact the market and metal prices.

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By the MetalMiner team

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