The price of lithium is falling, but some Western companies have recently announced more investments in the Lithium Triangle – a region of South America comprising parts of Argentina, Chile and Bolivia.

Overall, brine demonstrates the cost advantage in producing lithium carbonate while, with the exception of the Greenbushes mine in Western Australia, integrated spodumene suppliers have higher costs.

At current spot lithium salt and spodumene prices, the industry is moving fairly deeply into the cost curve. It is not only the weak price, but also the weaker demand outlook, that is causing a broad-based review, with some entities along the supply chain scaling-back their production, or rethinking investment schedules and plans.

Rio Tinto has signed a definitive agreement to acquire Arcadium Lithium. The agreement, valued at about $6.7 billion, has been unanimously approved by both companies’ boards of directors, and is expected to close in mid-2025 subject to an Arcadium shareholders’ vote.

Arcadium Lithium was formed from a merger of Allkem and Livent in January 2024 and has capacity for 75,000 tonnes per year of lithium carbonate equivalent (LCE) across all of its products.

Meanwhile, Rio Tinto, until now, has been a relatively small participant in the lithium sector, with a number of assets in the pipeline. These assets include the Rincon project in Argentina, which will use direct lithium extraction (DLE) technology to produce 3,000 tpy of lithium, set to begin production this year.

The merger of the two companies creates an environment in which Rio Tinto can leverage Arcadium’s lithium expertise. This is particularly in the field of DLE, where Arcadium has been a long-standing participant through its Salar del Hombre Muerto project, one of the highest grade lithium projects in Argentina.

“It’s good to see that Western companies are investing and interested in Argentina. We need Western companies here to balance China’s influence and show that Western companies are growing in lithium production,” a source told Fastmarkets.

“A deal like this, with a counterparty of Rio Tinto’s stature, shows that the lithium market is reaching a key level of maturity in its evolution,” a consumer said to Fastmarkets.

Separately, Paris-based minerals firm Eramet announced the buy-back of Tsingshan Holding Group’s 49.9% stake in Eramine Sudamerica, effectively regaining full ownership of the Centenario lithium project in Argentina.

The plant will begin production in the coming weeks, the company said.

The purchase of Tsingshan’s stake in the Centenario project is interesting in several ways, Fastmarkets’ head of base metals and battery research, William Adams, said.

“The decision to regain full ownership of this project shows that a Western miner is still confident in the project despite the current weak prices, and why wouldn’t it be?” Adams said. “The oversupply and price weakness are temporary, the world is going down the green transition route, and as more things are electrified or more renewable power generation is added, demand for energy storage is only going one way.

“The bigger the whole industry becomes, the harder it will be for producers to keep up with demand,” he added. “Western companies need to compete with Chinese companies to ensure sovereignty. This deal increases Western sovereignty as well as giving Eramet full control over how the operation expands.”

Trump effect

Participants in China’s electric vehicle (EV) and battery industries expect more uncertainty under a second Donald Trump presidency of the US, because of the president-elect’s stated intention to scale back the country’s Inflation Reduction Act (IRA) and to pursue expanded protectionist trade policies.

Trump’s election victory over incumbent Vice President Kamala Harris on November 6 potentially means a different approach to EVs compared with that taken by current President Joe Biden, complicating the process of electrification, industry sources said.

Throughout his campaign, Trump made it clear that he is not a fan of battery-electric vehicles, instead vowing to boost fossil fuels and internal combustion engine (ICE) vehicles.

Fastmarkets’ research team forecasts that EV sales in the US will reach 9.55 million units by 2034 under a Trump presidency, 5% lower than forecast for a Harris-victory scenario during the same period.

For more information on our long-term price analysis of the global lithium market, see Fastmarkets’ lithium 10-year long-term forecast.

“Trump’s policies will focus more on traditional energy sources, such as oil, coal and gas,” one producer said. “Trump is not a fan of renewable resources, so we think the result is bearish for the markets.”

Albemarle believes that it is still too early to discuss what the second Donald Trump administration may do to the lithium industry, Kent Masters, the lithium producer’s chairman and chief executive officer, said during the company’s earnings call on November 7.

“The energy transition is kind of a global phenomenon that is happening,” he said. “It’s really driven first by China. Europe is probably the second-largest market in that, and then North America. And I don’t want to speculate on what a Trump administration might do.”

Masters also said that “our strategy had been to pivot to the West. We’ve kind of backed off, given that prices have been so low and [because of the] economics of building-out that supply chain in the West. We still hope to do that, but we have to wait and see what the Trump administration wants to do.”

US investment in the region

According to Fastmarkets’ research team, there are more than 110 lithium mines in Argentina and Chile. Only two are owned by US companies, while the others have mainly Canadian, Chinese and Australian ownership. The same applies to lithium concentrators.

“The future presence of US companies is really challenging in Argentina and Chile,” Fastmarkets battery raw material analyst Atanas Atanasov said. “Maybe they have to focus on lithium concentrators because building is faster, and because acquiring an advanced-stage lithium mine is quite expensive. And in general, of 100 lithium advanced-stage mines, only 4-5 have been acquired by other companies.”

Meanwhile, in the context of the Inflation Reduction Act, our analysts believe that, over time, the US will forge other special trade agreements with non-free trade agreement (FTA) countries, such as Argentina, because there is a growth in mine and processing supply from countries that are not FTA partners, but which are also not foreign entities of concern (FEOC) as defined by the Act.

“With Chile as an FTA-partner country, we see huge opportunities for Chile to increase its sales to the US market,” Adams and Amy Bennett, principal consultant of BRM Research, said.

“On the other hand, China is continuing to expand its footprint in developing lithium provinces, including Argentina and Bolivia, as well as its mid- and down-stream processing and manufacturing industries,” they added.

“Chinese involvement in lithium projects in Argentina leaves lithium from the country on a more questionable status, because Argentina currently is not a US FTA-partner nation. On the other hand, we believe that, as long as joint ventures between China and non-FTA countries ensure that the Chinese equity is below 25%, then that material might be IRA-compliant,” they said.

But the definitions of IRA-compliant lithium have yet to be clarified. Market participants are not sure what is required for lithium to be IRA-compliant.

Besides, Trump has said that he plans to repeal the IRA, at least partially, and rescind its unspent funds.

He has not specified which programs he plans to target, but it is safe to say that with Trump elected the 47th President of the US, the centerpiece of incumbent Joe Biden’s economic achievements is set to undergo some changes.

“With the election of Trump,” Bennett said, “we would expect that any IRA money that has already been spent is safe, but any undelegated funds are likely to be rescinded.”

Current lithium pricing

Fastmarkets assessed the lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price, cif China, Japan & Korea, at $8.50-10.00 per kg on Thursday November 21, up by 5.71% from $8.00-9.50 per kg the previous day.

Fastmarkets assessed the lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, stable on Thursday at $10.80-11.40 per kg, unchanged since Tuesday.

This article is part of a special report on the Lithium Triangle. You can read the other two parts here and here.

If you’re interested in learning more about Argentina’s mining sector, fill out the form here to access our recent webinar replay. This comprehensive session provides in-depth insights and expert opinions, offering valuable information for anyone looking to explore this burgeoning market. 

The post The Lithium Triangle: Growing foreign investment in the region appeared first on Fastmarkets.

The Lithium Triangle, a region of South America comprising Argentina, Chile and Bolivia, has proven potential in lithium production, but each country faces its own specific challenges.

These include poor infrastructure, remoteness, impurities in output, and government intervention. These must all be overcome for the projects to succeed in the near future, industry specialists have told Fastmarkets.

The region is expected to gain more importance in lithium production in the coming years, because it has vast resources and offers low-cost operations.

Fastmarkets’ research team notes that, in 2023, 94% of global lithium supply came from just four countries: Australia, Chile, Argentina and China.

But supply is diversifying, so in 2034, the forecast is that Eastern Asia (China) will be the largest single producer globally, accounting for 30% of supply, followed by South America with 28% and Australia and New Zealand with 25%.

By 2034, Fastmarkets expects 61% of processing to be in China, 21% in South America, 5% in North America, 6% in Europe, 3% in Australia and 3% in other parts of the world. Ex-China processed production will increase at a compound annual growth rate (CAGR) of 13% to 1.02 million tonnes of lithium carbonate equivalent (LCE) in 2034, compared with 298,000 tonnes of LCE in 2023.

For more information on our long-term price analysis of the global lithium market, see Fastmarkets’ lithium 10-year long-term forecast.

But on the way to reaching this level of importance in mine and processed supply, South America still must find solutions for its problems.

Eduargo Gigante, a lithium and battery market consultant for the region, told Fastmarkets that the lithium resources in the triangle are very specific and require different approaches in each country.

“Bolivia is the worst, with a very long history of problems, and it will not be a main participant in the market,” he said. “The approach, the government and the poor framework of resources in Bolivia are really bad. The state controls the entire value chain. Bolivia will not have a great future in the near term. We can hope for better prospects in perhaps 5-10 years’ time.”

“Chile is better than Bolivia, but it also has a problem with the framework,” Gigante added. “With the new lithium national strategy and the new state management… we are not sure what will happen.”

“On the other hand, Argentina is better positioned,” he said. “Its lithium production will grow very strongly in the next 2-3 years. The country has a better approach to the legal framework, it’s very open to investment, and the new government is very attached to the mining sector. And we have RIGI.”

Argentina recently introduced its new RIGI incentive regime for large investments, which provides financial leverage for various sectors – including mining – as well as tax, customs, Forex and regulatory stability for 30 years.

The RIGI scheme offers several tax benefits, such as a reduced income tax rate of 25%, faster amortization periods, and the ability to carry forward losses without restrictions.

Projects with investments worth $200 million or more can benefit from the RIGI scheme, but companies are required to spend 20% of their investment locally, ensuring that the benefits of mining are felt within the country.

The fact that Argentina is better positioned, while Bolívia and Chile have bigger challenges to overcome, dominated the sideline conversations at the Litio en Sudamérica conference held in Jujuy, Argentina, in October. More than 1,500 participants across the value chain discussed the future of production in the region.

Jason Luo, chief executive officer and president of Ganfeng Argentina, told delegates in his presentation that RIGI is creating a new scenario that adds value to the industry.

“It is crucial to have long-term solutions,” Luo said. “We only undertake projects that we consider necessary to strengthen the industry. This means increasing production and creating more jobs through close collaboration with our suppliers.”

Ganfeng is pursuing activities in Argentina, specifically in the provinces of Salta and Jujuy, where it is running five lithium projects. These are the Mariana Project; Pozuelos-Pastos Grandes; the Cauchari-Olaroz Project; the Incahuasi Project; and the Sal de la Puna project.

Many market participants told Fastmarkets on the conference sidelines that RIGI favors and provides legal security for lithium projects, bringing more investment to Argentina.

“Argentina is the best positioned country in South America, with low costs and good government policies, such as RIGI. Bolivia, on the other hand, is a disaster. There are no rules. All the plants are government-owned and the government wants to take over everything. In Chile, there are also many restrictions because of the government,” a source that is developing a project in the Lithium Triangle said.

“Argentina is the best positioned in South America,” a second producer source said. “Bolivia produces little and its lithium is of low quality, because it has a lot of impurities. Chile also has government involvement.”

And according to a third producer source, the market must understand that the triangle is a hybrid region, so some projects have better competitive advantages than others.

Also, salt flats differ in their levels of lithium concentration. “The market will become more demanding and will select the best, low-cost projects, and this could be an advantage for Argentina. There are many projects that will not go ahead in South America, but some have a competitive advantage in Argentina,” the third producer source said.

“I don’t know how quickly Bolivia can adjust to a new scenario,” a fourth source said. “It’s not market-driven market, it’s institutionalized. They have the material, but politics is a problem there.”

Chile challenges and DLE

Another market participant told Fastmarkets that they saw great investment opportunities in Chile, which is the longest standing lithium-producing country in the world, but was disappointed by the level of government intervention.

In April 2023, the Chilean government announced that it intended to nationalize its lithium resources under the “National Strategy for Lithium.”

The goal would be to establish a state-owned company, National Lithium, to oversee the entire production cycle of the critical mineral.

According to the UN Trade and Development (UNCTAD) website, the country’s existing state-owned copper companies, Codelco and ENAMI, will play leading roles in this endeavor. The state will retain a majority stake in projects deemed strategic for the country.

Some market participants saw this nationalization plan as having the potential to impede further foreign investment into production in the region.

Lithium-ion battery supply chain consultant Jose Hofer told Fastmarkets that Chile has wonderful resources of lithium, but faces a lack of human capital and government intelligence.

“Chile has significant production, but the future capacity will take 8-10 years to expand,” Hofer said. “This is not what we see in Argentina, for example, where production will quintuple in 10 years. The current Chilean government is radical left-wing, and is pushing for the state to have control.”

One of the main points of the new national strategy is that companies that want to invest in the country must now adopt direct lithium extraction (DLE)-based processes to partner with the Chilean government, because the country is focusing on the adoption of new lithium extraction technologies that minimize their environmental consequences.

Gigante believes that the Chilean government’s decision regarding mandatory DLE is a big mistake.

“I don’t know any company in the world that is working on an industrial scale for DLE,” he said. “Traditional evaporation is a better option, not expensive, very productive, and friendly to the environment. In Chile, there are no new projects, and if you start a project, you’ll need maybe 7-10 years to develop a DLE project.”

For Hofer, it was important to note that DLE uses more fresh water and interferes in the chemical balance of what is below the salt flat. “Besides,” he added, “many of these technologies have not been proven to be commercially feasible.”

According to Fastmarkets’ research team, unconventional resources are necessary to offset the supply/demand deficit forecast for the future, while also promising higher recovery rates and better environmental-social-governance (ESG) credentials, although the technology is costly compared with conventional recovery methods.

There are five DLE technologies, which are not new, according to Fastmarkets’ research team.

“Livent has been using absorbent DLE technology for 26 years,” they said, “but all the absorbent technologies are at pre-commercial stages, so it’s possible to see potential delays to projects using DLE. The commonality across all five is the promise to increase recovery, cut costs, reduce production times and improve the ESG footprint of lithium production, compared with traditional methods.

“Whether these technologies will scale-up has yet to be proven,” they added. “If successful, DLE has the potential to unlock 25 million tonnes of LCE in unconventional resources, while simultaneously lowering the environmental footprint of traditional salar brine resources.”

Argentina, not a paradise

Argentina stands out for many reasons and for receiving a lot of private capital, with a high percentage of salt flats in foreign hands. But despite being considered to be in a better position, market participants noted that the country must face its challenges and many projects will be delayed.

“Ramp-ups in Argentina are very underestimated. Although we have the plants, ramping up and achieving full capacity will take more time,” a producer source said, adding the low prices are affecting the development of projects in the country.

According to Gigante, the biggest problem in Argentina is infrastructure. The mines are in very isolated locations, and the roads to get there are poor.

“We don’t have very good ports, and they are far away from the Triangle,” he said. “Catamarca, Salta and Jujuy are the poorest areas and are where the lithium is concentrated in Argentina. We don’t have trains in Argentina – all the production is going on trucks. This is a problem, because the logistics cost is high. I don’t know if the roads are ready to respond to this lithium growth in Argentina. It might be a problem.”

Luo also said in his speech at the Litio en Sudamérica event that Argentina faces problems with logistics, value chain and infrastructure. The Mariana project, he said, “is very ambitious and is located in a remote location, without access to natural gas or electricity. Therefore, we are building one of the largest off-grid solar plants, designed to supply our entire chemical plant.”

Hofer said that logistics were a problem in the Lithium Triangle, mainly in Argentina, where output must cross the Andes region to get to Chilean ports. “The country with the greatest advantage in this regard is Chile, because it has the main important ports in its territory,” he said.

The main Chilean ports are Antofagasta, Angamos and Mejillones.

Current lithium pricing

Fastmarkets assessed the lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price, cif China, Japan & Korea, at $8.50-10.00 per kg on Thursday November 21, up by 5.71% from $8.00-9.50 per kg the previous day.

Fastmarkets assessed the lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, stable on Thursday at $10.80-11.40 per kg, unchanged since Tuesday.

This article is part of a special report on the Lithium Triangle. You can read the other two parts here and here.

If you’re interested in learning more about Argentina’s mining sector, fill out the form here to access our recent webinar replay. This comprehensive session provides in-depth insights and expert opinions, offering valuable information for anyone looking to explore this burgeoning market. 

The post The Lithium Triangle: A potential giant but with challenges to overcome appeared first on Fastmarkets.

The countries that comprise the Lithium Triangle currently control more than 50% of global lithium resources, with production concentrated in the salt flats regions of Argentina, Chile and Bolivia, where there are lithium brine deposits.

Mineral Commodity Summaries by the US Geological Survey in January 2024 showed that the world’s lithium resources have increased substantially and now total 105 million tonnes.

You can see how/where the Lithium Triangle is located in the image below:

Currently, according to Fastmarkets’ research team, Argentina has 85 lithium projects at different stages of exploration and construction. These are mainly in the most arid areas of the country – Catamarca, Jujuy and Salta – with seven operations working.

Chile, on the other hand, has 19 projects between exploration and construction, with two operations working and one expected to begin production in 2025.

Bolívia has no active lithium projects at the moment.

The tables below show the operational and advanced projects that are filtered and used to create Fastmarkets’ long-term forecasts.

For more information on our long-term price analysis of the global lithium market, see Fastmarkets’ lithium 10-year long-term forecast.

Production forecast

Fastmarkets’ updated 10-year production forecast for the three countries that form the Lithium Triangle are as follows:

Argentina
Argentinian production was expected to increase at a compound annual growth rate (CAGR) of 15% between 2024 and 2034, to reach 355,200 tonnes per year.

Although brine production was a relatively low cost procedure, new projects and further expansion in the country were likely to be delayed or halted in the current price environment.

Despite the near-term challenges, Fastmarkets expects Argentina to become an increasingly significant participant in the global lithium market. But many projects are focusing on direct lithium extraction (DLE) as opposed to traditional processing routes, so there is additional risk to the downside.

Chile
Chilean production is forecast to increase at a CAGR of 3.6% between 2024 and 2034, to reach more than 371,000 tpy.

Given the scale of the lithium resources in Chile and the cost-competitiveness of the industry, Fastmarkets expects more Chilean projects to be established over the next decade.

SQM plans to expand its production capacity in the Salar de Atacama to 300,000 tpy from about 200,000 tpy. Chile’s National Mining Company, ENAMI, intends to start construction on its first lithium project in the country as early as 2027.

The country is also turning its attention to increasing lithium hydroxide production, which is set to grow to 50,160 tonnes of LCE in 2034 from 22,000 tonnes of LCE in 2023 – a 128% increase.

Bolivia
Bolivia has awarded the rights to develop projects in the Uyuni and Oruro salt flats.

State-owned producer Yacimientos de Litio Bolivianos will play a central role in the project that intends to create two lithium plants, each producing as much as 25,000 tpy of battery-grade lithium carbonate. The operation intends to produce 100,000 tonnes by 2028 using DLE.

Bolivia has also entered into an agreement with Russian state-owned company Uranium One Group to build a DLE pilot plant that is expected to commence operations in 2025, producing 1,000 tonnes of battery-grade lithium carbonate in its first year.

The Bolivian government is clearly much more amenable than in the past to international partnerships, which bring significant investment and development expertise. But given that much of the planned production is based on DLE, there is significant technical risk to achieving the announced production targets.

Current lithium pricing

Fastmarkets assessed the lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price, cif China, Japan & Korea, at $8.50-10.00 per kg on Thursday November 21, up by 5.71% from $8.00-9.50 per kg the previous day.

Fastmarkets assessed the lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, stable on Thursday at $10.80-11.40 per kg, unchanged since Tuesday.

This article is part of a special report on the Lithium Triangle. You can read the other two parts here and here.

If you’re interested in learning more about Argentina’s mining sector, fill out the form here to access our recent webinar replay. This comprehensive session provides in-depth insights and expert opinions, offering valuable information for anyone looking to explore this burgeoning market. 

The post The Lithium Triangle: Three countries control more than 50% of global resources appeared first on Fastmarkets.

This is why green aluminium is increasingly in demand and is quickly transforming the metal industry landscape. This article will take a deep dive into green aluminium, exploring its impact on sustainability and what it means for industry professionals, buyers, traders and manufacturers. 

We’ll also explore the current market demand, the environmental benefits and the challenges the industry faces.  

What is green aluminium? 

Green aluminium represents a significant shift from conventional aluminium production, primarily distinguished by its commitment to sustainability. Unlike traditional aluminium, which relies heavily on energy-intensive processes, green aluminium focuses on reducing carbon emissions and conserving natural resources. This is achieved through practices such as low-carbon smelting and increased use of recycled aluminium materials. 

The concept of green aluminium revolves around the sustainable lifecycle of the product. From mining to smelting to recycling, every stage is optimized to minimize environmental impact. In particular, the use of renewable energy sources and advanced recycling techniques plays a crucial role in differentiating green aluminium from its conventional counterpart. 

Green aluminium is not just about reducing emissions – it’s about transforming the entire aluminium production value chain. This shift not only benefits the environment but also caters to a growing market of eco-conscious consumers and businesses looking to align with sustainable practices. For industry professionals seeking to stay ahead, understanding green aluminium is essential in navigating this evolving landscape. 

Understand more about low-carbon aluminium production, forecasts and price market trends by visiting our hub page.

How is green aluminium produced? 

The production of green aluminium involves several innovative techniques designed to reduce environmental impact. One of the most significant advancements is low-carbon aluminium smelting. This process replaces traditional carbon-intensive methods with alternatives that use renewable energy sources, such as hydropower and solar energy. By doing so, the carbon footprint of aluminium production is significantly reduced. 

Another key component in green aluminium production is recycling. Recycled aluminium requires only 5% of the energy needed to produce new aluminium, making it an incredibly efficient and sustainable option. The industry is increasingly focused on maximizing the use of recycled content in aluminium products, further enhancing the environmental benefits. 

The production process also emphasizes closed-loop systems, where waste and by-products are reused within the production cycle. This not only minimizes waste but also reduces reliance on raw materials. For metal industry professionals, understanding these processes is crucial for adapting to the demand for green metals and implementing sustainable practices in their operations. 

Green aluminium in the market 

The market demand for green aluminium is on a steady rise, driven by environmental concerns and regulatory pressures. Consumers and businesses are increasingly prioritizing sustainability, leading to a surge in demand for low-carbon aluminium products. This trend is particularly evident in industries such as automotive, construction and packaging, where the push for eco-friendly materials is strongest. 

The growth of the green aluminium market presents numerous opportunities for buyers, traders and manufacturers. For those willing to invest in sustainable practices, the potential for market expansion and competitive advantage is substantial. Companies that can offer certified green aluminium products are well-positioned to capture the growing demand from environmentally conscious customers. 

However, navigating the green aluminium market can be challenging due to the complexities of certification and the need for transparent supply chains. Industry professionals must stay informed about market developments and regulatory requirements to effectively capitalize on this burgeoning trend. 

Environmental benefits of green aluminium 

By reducing reliance on fossil fuels and minimizing waste, green aluminium plays a crucial role in reducing carbon emissions and combating climate change. This aligns with global efforts to achieve net-zero emissions by mid-century, a goal that is increasingly becoming a priority for governments and businesses worldwide. 

Green aluminium also contributes to resource conservation by promoting the use of recycled aluminium. This not only reduces the need for raw material extraction but also minimizes the environmental impact associated with mining activities. The shift towards a circular economy, where materials are reused and recycled, is essential for sustainable development. 

For companies committed to sustainability, adopting green aluminium is not just an environmental imperative – it’s a strategic advantage. It enables businesses to meet regulatory requirements, enhance their brand reputation and attract environmentally conscious customers.

The current global aluminium market  

The global market for low-carbon or green aluminium is witnessing noteworthy developments as sustainability becomes a cornerstone of industrial growth. In Japan, Mitsui‘s strategic increase in its stake in Nippon Amazon Aluminium Co (NAAC) to 46% this year highlights the growing focus on aluminium produced with low-carbon energy sources. This move aligns with the escalating demand for green aluminium, as evidenced by Mitsui boosting its annual offtake from Albras in Brazil to 140,000 tonnes, recognizing the potential of this eco-friendly material. 

Albras, partly owned by NAAC, is a significant player due to its low carbon emissions, producing aluminium with a greenhouse gas emission rate of just 1.97 tonnes of CO2e per tonne. This achievement is powered by renewable energy sources, primarily from the Tucurui hydroelectric power plant and soon to be supplemented by the Boa Sorte solar power complex. 

In Europe, the market for low-carbon aluminium remains stable, with differentials for value-added products showing slight upward movements due to concluded transactions. However, the demand remains cautious, with some companies prioritizing cost over sustainability amidst economic uncertainties. This balancing act is critical as the market continues to adjust to the evolving landscape of green materials. 

The United States presents a different narrative, with the aluminium industry increasingly turning to scrap recycling to achieve its green objectives. This shift reflects a pragmatic approach in the absence of abundant renewable-powered electricity for primary production. While the spot market for low-carbon aluminium remains quiet, there is a growing interest from auto manufacturers who are beginning to inquire about long-term contracts, hinting at a future premium for such materials. 

Companies like Companhia Brasileira de Alumínio (CBA) are pivotal in this transition, investing in modernizing production processes to reduce carbon emissions, such as introducing technology for the disposal of dry residue. These efforts not only enhance operational efficiency but also prepare the company for a future where green aluminium is in higher demand. 
 
Brazil is a leading proponent of low-carbon aluminium production, as its industry already has carbon-emissions levels that are significantly below the global average. It also plans further emission cuts by increasing the use of renewable energy and recycling. 

As the market dynamics continue to evolve, the role of low-carbon aluminium differentials and premiums becomes increasingly significant. Although some sectors remain hesitant to pay a premium for these eco-friendly products, the gradual shift in consumer and industrial preferences towards sustainability suggests that the market is poised for growth. With only 25% of global aluminium production currently classified as green, there is substantial room for expansion, positioning companies that prioritize low-carbon solutions at the forefront of the industry’s future. 

Fastmarkets’ low-carbon aluminium differentials 

Fastmarkets first launched its European low-carbon aluminium differentials for P1020A and value-added products in March 2021, following a growing demand for transparency in this evolving sector. Differentials for low-carbon material in the US, Japan and Korea have since followed as this becomes a global trend. 

Fastmarkets’ currently defines low-carbon aluminium as metal produced with a maximum of 4 tonnes of CO2 equivalent per tonne of aluminium produced under Scope 1 and 2 emissions. 

Under the Green House Gas Protocol, Scope 1 carbon emissions refers to the direct carbon emissions from a smelter. Scope 2 carbon emissions refers to the carbon emissions from a smelter’s power source. 

Challenges and future of green aluminium 

Despite its promising potential, the widespread adoption of green aluminium is not without challenges. One of the primary hurdles is the cost associated with transitioning to sustainable production methods. Investing in renewable energy sources and advanced recycling technologies can be capital-intensive, posing financial challenges for manufacturers. 

Supply chain complexities also present a challenge, as ensuring the transparency and traceability of materials is critical for certifying green aluminium products. Additionally, the industry must address the energy-intensive nature of aluminium production, even with low-carbon methods, to further reduce its environmental impact. 

Looking ahead, the future of green aluminium hinges on innovation and collaboration. Continued advancements in technology and increased investment in sustainable practices are essential for overcoming current challenges. Industry stakeholders must work together to develop standardized certifications and promote the adoption of green aluminium across all sectors. 

Reshaping the metal landscape 

Green aluminium is not just a trend – it’s a transformation that is reshaping the metal industry. For metal industry professionals, buyers, traders and manufacturers, understanding and adopting green aluminium is crucial in navigating the shift toward sustainability. The environmental benefits, coupled with growing market demand, make green aluminium a vital component in the quest for reducing carbon emissions and achieving a more sustainable future. 

By staying informed about industry developments and investing in sustainable practices, businesses can position themselves as leaders in the move toward green metals.

For those looking to explore further, Fastmarkets provides low carbon and green aluminium prices, which can deepen your understanding for your business operations. 

The post How green aluminium is transforming the metal industry  appeared first on Fastmarkets.

“People feel that Trump is going to be bullish for the market, particularly in terms of continuing tariffs and maybe keeping interest rates a little lower,” one source told Fastmarkets. “But at the same time, some of the higher tariffs may become restrictive on other origins; could also be inflationary.”

Analysts noted that despite immediate election volatility, aluminium prices have remained resilient.

“In the very short term, Fastmarkets research still deems any weakness in aluminium price action to be temporary, as the election uncertainty will soon give way to a more positive macroeconomic backdrop — namely further cuts in interest rates from the US Federal Reserve Bank,” Fastmarkets analyst Andy Farida said.

While tariffs and trade sanctions remain on the horizon, tight upstream supply and recent disruptions continue to keep the price up, Farida said.

The election result has removed some uncertainty, and aluminium traders are now more willing to finalize contracts for the upcoming year.

“One uncertainty is out of the market,” another US-based source said. “I think it’s positive for business getting done into the next year.”

Aluminium prices update

Aluminium prices have recently been bolstered by upstream supply constraints, including disruptions in Guinea’s bauxite exports and low alumina inventories. Some sources believe these factors, combined with anticipated Trump-led policy shifts, could push prices higher in the short term.

Fastmarkets last assessed the aluminium P1020A premium, ddp Midwest US at 20-21 cents per lb on Thursday November 7, unchanged since November 1.

Analysts cautioned that further protectionist policies could eventually impact global trade dynamics, with the latter half of 2025 potentially facing headwinds.

Aluminium market participants are waiting to see whether Trump’s administration will further intensify trade measures against China, as well as the potential impact on US trade relationships with Canada and Mexico.

“Trump’s stance on China is clear. We’re watching closely for any changes in trade policy that might affect aluminium imports,” one source noted.

Latin America

Market participants highlighted to Fastmarkets that they are worried Trump might approve restrictive measures like he did in the past, affecting the Latin American aluminium industry.

“Latin American aluminium [participants] may suffer with the Trump administration due to protectionism, as there are many markets that are dependent on the USA for exports. In Latin America, the most affected would be Mexico, because greater taxation may be imposed by the new president,” a trader source in the region said.

“We are worried that Trump might increase tariffs and cut the nearshoring,” a Mexican producer said.

Data from the Mexican government shows that in 2023 83.8% of Mexican “aluminium and its products” was exported to the US, while 72.7% of unwrought aluminium went to the country.

In 2018, Trump imposed 25% tariffs on steel imports and 10% on aluminium, using Section 232 of the Trade Expansion Act of 1962.

According to the Congressional Research Service, Section 232 allows the President to impose import restrictions based on an investigation and affirmative determination by the Department of Commerce that certain imports threaten to impair US national security.

In January 2020, Trump expanded the scope of the tariffs to include certain derivative goods. US imports from Mexico are exempt from Section 232 tariffs due to an independent agreement between the US, Mexico and Canada previous to the United States-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020. The USMCA replaced the North America Free Trade Agreement (NAFTA).

Actions under Section 232 have generated debate in Congress and at the multinational level in the World Trade Organization (WTO).

Fernando Garcia Martinez, vice-president of operations at Mexican aluminium institute IMEDAL, said that the most important issues for the aluminium industry regarding the Trump administration are his protectionist policies and the review of the current trade agreement.

“The United States will seek a tightening of the requirements of origin and greater restrictions on the use of materials from Chinese companies, particularly in the automotive industry,” Garcia said.

“In all cases, the weapon that will be used to pressure Mexico will be the increase in import taxes. It is clear that the policy followed in the past of increasing tariffs has not caused, as expected, greater investments in the United States industry to generate more jobs. Instead, it has caused greater inflation, because who ends up paying these increases is the consumer himself. On the other hand, the United States must recognize that it needs Mexico, due to the current integration of the productive chains and the advantages that Mexico offers,” he added.

For Farida, Trump’s second term is a confirmation that the price all finished goods and perhaps even raw materials imported from Mexico, or any Latin American region that allows Chinese factories to be operational, will increase by several folds.

“While the tariffs discussed appear mind-blowing, we are unsure what the final numbers will be and if the final cost of import will settle or perhaps simply match with the price of an item that is made from neighboring Canada or even in the USA. Rather, those extra tariffs are likely to result in tit for tat war-like protectionist control that will surely reignite inflationary pressure and soon creep into higher costs of living for the American consumer,” Farida added.

In July, the White House announced that aluminium that is shipped from Mexico must not contain primary material that was smelted or cast in China, Russia, Belarus or Iran – otherwise it does not qualify for the section 232 exemption and will be subject to a 10% tariff. Material from Russia was already subject to a 200% tariff, thus resulting in a total rate of 210%.

The new measure requires aluminium importers into the US to present proof to US Customs and Border Protection (CBP) of the material’s country of origin in the form of a certificate of analysis, showing that the country of first smelter, second smelter and casting is not one of the four listed above.

Janaina Donas, the executive president of the Brazilian Aluminium Association (ABAL), told Fastmarkets that it is still too early to have a definitive opinion about the impact of the American elections on the Brazilian aluminium sector.

“Although [Trump’s] trade policy followed a more protectionist line with the implementation of Section 232, which imposed tariffs on imported aluminium, it is important to note that the subsequent Democratic administration did not undertake any movement to review or reverse these tariffs. This scenario suggests a certain continuity in the American approach to protecting strategic industries, regardless of the current administration,” Donas said.

“For Brazil, in line with most emerging countries, a large part of national aluminium production is intended to meet domestic demand, with international trade playing a secondary, but still relevant, role. The possibility of new surcharges or barriers is a concern for the sector, as these measures not only make it difficult to access markets in which we are competitive, but also increase the risk of trade diversion. Furthermore, they increase Brazil’s exposure to unfair trade practices from other regions, reinforcing the need for strategies that protect the competitiveness of Brazilian industry in an increasingly challenging global environment,” she said.

Fastmarkets assessed the fortnightly aluminium P1020A premium, low-VAT market, delivered São Paulo region at $250-300 per tonne on October 29, stable since October 1.

Meanwhile, the aluminium P1020A premium, high-VAT market, delivered São Paulo region stood unchanged from a fortnight earlier, at $140-180 per tonne on October 29.

Europe

Participants in Europe were also watchful of the newly announced presidency and its potential impact on the market.

“The Trump win is definitely bullish [for the Midwest] premium – whether because of tariffs, improved manufacturing activity, or both,” one trader in the region said.

“If it gets to a point where the US is actually competing again for the fairly limited global supply of unplaced P1020, then it would indeed be extremely bullish for European premiums, which have moved higher without even having the element of having to outbid the US for metal,” the trader added.

Rising freight costs, lean domestic inventories and elevated premiums achievable in some Asian markets helped support higher transaction levels in Europe across 2024.

Fastmarkets assessed the aluminium P1020A premium, in-whs dp Rotterdam at $325-355 per tonne on Tuesday, unchanged from the previous week’s assessment, but rising by 68% from $190-215 per tonne at the beginning of the year.

The duty paid premium in Rotterdam peaked at a midpoint of $342.50 per tonne earlier in the year, its highest level since October 2022.

Fastmarkets assessed the aluminium P1020A premium, in-whs dup Rotterdam at $280-300 per tonne on Thursday November 7, unchanged since September 17.

But while the US has remained largely rangebound throughout the year, European participants are noting some concern over domestic availability should the US premium gain support.

“[It’s possible in the near term] that a strong [Midwest premium] keeps Canadian tonnes in North America and attracts [Australian] tonnes out of Asia, indirectly also reducing tonnes that could come to Europe,” a third trader added.

“The [Chicago Mercantile Exchange] contango on [the Midwest premium is] also incentivizing plans to send metal there,” they said.

The CME aluminium Midwest US premium cash-settled forwards were most recently trading at 22.6 cents per lb for January 2025, and 23 cents per lb for July 2025.

“A landslide re-election win for [Trump] signifies that additional trade tariffs and sanctions could emerge in the coming months,” Farida said on Wednesday November 6.

“Additional trade tariffs and sanctions on China is no longer a new idea. Instead, tariffs and sanctions may have less of the desired price and impact. Still, we think Trump and the Republicans controlling the senate and congress will allow Trump to make his mark,” Farida added.

Others pointed to a more negative impact on regional demand, however.

“The ‘Trump effect’ is too early to assess, but we could see more protectionism policies, which will impact demand even more,” a fourth trader said. “We have another two plus months before we get more clarity on the issue.”

Discover how the 2024 US election is impacting and could impact US and global commodity markets with Fastmarkets. Head to our US election hub.

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At a seminar on critical minerals, hosted by the UK Department for Business & Trade and the Embassy of Brazil in London on October 3, Goodenough emphasized that Brazil’s progress in this area could inform the UK’s policies.

“It seems to be widely perceived that we no longer engage in mining in the UK [and] that the UK’s mining history is over,” Goodenough said. “Instead, we [should] focus on finance and perhaps train some individuals who then go overseas.”

In recent years, Brazil has been emphasizing mining as a vital part of its economy, creating job opportunities and making substantial progress, according to speakers at the seminar.

“The UK still has a mining heritage,” Goodenough said, pointing to the need for updated assessments to identify potential untapped resources in the country.

“Although we train people – perhaps fewer than we used to – we still don’t adequately discuss the importance of mining and mineral resources in this country,” she said. “While it’s important to have international partnerships with various countries that are producing critical minerals, we should also focus more on our own resources.”

What is the UK’s critical minerals strategy?

The UK possesses some capabilities in the critical minerals sector across the mining lifecycle, including low-carbon solutions. London already serves as a global mining finance and trading hub, and is home to the London Metal Exchange, the world center for industrial metals trading.

Last year, the UK government unveiled its first-ever Critical Minerals Strategy, outlining a comprehensive approach to securing the UK’s supply of critical minerals.

The strategy will adopt a three-pronged “ACE” approach:

• Accelerate the UK’s domestic capabilities
• Collaborate with international partners
• Enhance international markets.

Under the “Accelerate” pillar, the UK intends to maximize domestic production where economically viable and environmentally sustainable. The strategy also emphasizes rebuilding skills in mining and minerals, proposing investments in research and development to solve challenges in critical minerals supply chains.

The country’s mining heritage is evident in Cornwall, in the south-west of England, which hosts a growing mining cluster of more than 110 companies. Two of these, Cornish Lithium and British Lithium, were already developing projects to produce lithium salts in the region.

Meanwhile, Pensana was developing a rare earth processing facility at the Humber Freeport, and Peak Resources was planning a similar facility at the Teesside Freeport, both in north-east England.

These projects aligned with the UK government’s broader investment in green industries. In 2020, it committed £12 billion ($15.7 billion) as part of its Ten Point Plan to support green jobs and transition to net-zero carbon emissions by 2050.

The recent £25 million investment by UK Research & Innovation (UKRI) in green industry centers, including £4.5 million for the University of Exeter to accelerate critical minerals mining, further demonstrated the UK’s commitment to developing its domestic capabilities.

Brazil’s critical minerals headway

Brazil has long been recognized for its significant mineral resources, particularly in critical minerals. “For instance,” Goodenough said, “Brazil is the world’s leading producer of niobium, which dominates that sector.”

According to Goodenough, Brazil has various other elements with considerable potential. “When discussing battery raw materials, Brazil stands out as a producer of nickel and graphite, being one of the largest producers globally,” she said.

Brazil has a diverse portfolio of resources essential for the global energy transition. The country dominates the niobium market and is rapidly expanding its presence in the production of lithium, graphite and rare earth elements (REE).

According to Olivier Masson, Fastmarkets’ nickel analyst, Brazil produced only 2% of global refined production in 2023. But that supply was equivalent to 18% of global ferronickel supply, excluding nickel pig iron.

Ferronickel, it should be noted, is primarily used in the stainless-steel sector and is not suitable for battery production.

Brazil is currently the fourth-largest producer of natural graphite in the world, accounting for approximately 3% of global production. But its output of 30,000 tonnes in 2023 was significantly lower than those of China (800,000 tonnes), Mozambique (100,000 tonnes) and Madagascar (79,000 tonnes), limiting its role in international graphite markets.

According to the Geological Survey of Brazil, Brazil’s graphite production still needs to be improved, and there is room for growth in the industry. The Brazilian government has shown interest in developing the country’s graphite production, and investment in the sector was expected to increase in the coming years.

At present, around 50% of Brazil’s graphite production is consumed in the domestic market, primarily by traditional sectors such as the steel industry, lubricants, and others.

The country has limited exposure to the rapidly growing lithium-ion battery sector.

Fastmarkets data analyst Georgi Georgiev expected Brazil to play a more significant role in battery raw materials supply chains for graphite in the Americas in the coming years. He added that the shift would be driven by two key factors.

First is the Inflation Reduction Act (IRA) regulations in the US, which will incentivize the sourcing of critical minerals, including graphite, from countries with free trade agreements with the US.

While Brazil currently does not have an FTA with the US, discussions were being held about potential trade agreements that could benefit Brazil’s graphite industry in the future.

The second key factor is new graphite projects coming online in Brazil, such as the Santa Cruz mine. This project, being developed by South Star Battery Metals, was expected to produce 12,000 tonnes per year of graphite when it reaches full capacity, which should be this year.

Given these developments, Fastmarkets’ data analysts project that Brazil’s graphite production could exceed 56,000 tpy by 2028, potentially raising its global market share to 2.7%. This growth could position Brazil as a key supplier of graphite for the expanding electric vehicle (EV) battery market in both North and South America, especially if trade agreements with the US are established.

Fastmarkets launched a monthly price assessment for graphite flake, 94% C, -100 mesh, cif US ports, on October 3 this year, reflecting the growing interest in US graphite pricing.

Lessons from ESG, tech advancements

Another panelist at the London seminar, Rafael Bittar, vice-president at iron ore and nickel producer Vale, discussed the Brazilian multinational’s efforts to implement new technologies.

Bittar mentioned Vale’s recent technology investments, including the use of robotics to eliminate upstream tailings facilities, and the use of artificial intelligence (AI) to improve production efficiency and reduce resource consumption.

“We need to have roadmaps for zero-residue, carbon neutrality, and circularity in mining operations,” Bittar said.

The panel discussion highlighted that successful mineral resource development must go beyond extraction. It will require a comprehensive approach encompassing sustainable practices, community engagement and technological innovation.

Ligia Pinto from Sigma Lithium pointed to that company’s commitment to sustainable operations in Brazil.

“We operate with zero toxic chemicals use, zero carbon emissions, and zero tailings dams,” Pinto said, emphasizing the importance of long-term sustainability over short-term profits.

Pinto also detailed Sigma’s micro-credit program for women in local communities, which has already reached 2,000 women and was hoped to support 10,000 within two years.

But it was worth noting that, for some critical minerals such as rare earth elements, Brazil’s current production was still relatively low despite its significant reserves. This indicated that the country had yet to fully capitalize on its potential in this sector.

Last year, Brazilian mining association IBRAM signed a cooperation agreement with the British government mission in Brazil and with Mining Hub, a local industry innovation initiative. The intention was to finish a new inventory of sectoral greenhouse gas (GHG) emissions and to develop a decarbonization roadmap.

Stay informed, make confident decisions and navigate the dynamic rare earths market with Fastmarkets. Learn more.

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According to the CEO, however, the lack of willingness to pay for green aluminium might change in the medium-to-long term.

“Currently, there is an available supply of green aluminium for an incipient market, concentrated mainly in the auto sector and end-consumer products, but if this market starts to demand more or other sectors start to [increase] demand, few companies will be prepared to meet this, so there may be a bigger demand for differential premiums for producers like us,” Alves said, adding that currently only 25% of the total global aluminium production is considered green. 

Fastmarkets launched its first low-carbon aluminium differentials for Europe in 2021, and for the US in 2023.

The aluminium low-carbon differential P1020A, US Midwest was assessed by Fastmarkets at 0 cents per lb on Friday, September 6. The premium had been at zero since it was launched in December 2023.

Fastmarkets assessed the aluminium low-carbon differential P1020A, Europe at $0.00-30.00 per tonne on September 6, down by 14.29% from $10.00-25.00 per tonne on August 2. 

Plans to modernize aluminium production

Currently, CBA’s green material has an emission of 3 tonnes of carbon dioxide (CO2) per tonne of aluminium produced, covering Scope 1 and 2 emissions. They use 100% renewable energy, which comes from hydroelectric power and wind farms. Scope 1 emissions refer to direct emissions generated by an entity or its subsidiaries, while Scope 2 are the indirect emissions from energy used by an organization.

The company is investing to reduce its carbon emissions with new projects to modernize its primary aluminium production. 

Some of the new technology will enable the disposal of dry residue in the company’s alumina refinery. The dry residue can have a future usage, like in the construction sector. The bauxite mine tailings and bauxite residue, which are currently stored in waste dams, can be used in the production of building materials and cement, respectively. 

In addition, CBA will automate its Salas Forno plant, where it produces liquid aluminium, which will make the process more efficient, with fewer costs and emissions. 

Alves highlighted that some companies that are seeking green certification are also increasing scrap consumption, which is contributing to supply tightness in some regions of the world. 

In the US, for example, with the US primary aluminium industry lacking renewable-powered electricity sources, it has turned to scrap to decarbonize its aluminium production.

“The US aluminium industry is getting greener not from prime production but from extending its scrap recycling,” Fastmarkets principal consultant Kirstine Veitch said. “That is the US’s route to greening aluminium production in the country.”

CBA participates in the low value-added tax (VAT) aluminium market in Brazil, primarily selling material at a deferred tax in the state of São Paulo.

Fastmarkets assessed the aluminium P1020A premium, low-VAT market, delivered São Paulo region at $260-315 per tonne on September 3, stable from a fortnight earlier.

And Fastmarkets assessed the aluminium P1020A premium, high-VAT market, delivered São Paulo region at $170-220 per tonne on September 3, widening downward from $200-220 a fortnight earlier.

Focus on value-added products 

In April, Fastmarkets reported that supply coming from CBA was said to have tightened, helping to boost the P1020A ingot premium. Ingot buyers and traders then reported fewer deliveries, although there have been no major changes in demand or supply. 

Sources questioned whether there was a problem in CBA’s production process or whether it was a commercial strategy for the company.

According to Alves, CBA is focused on producing more value-added products (VAP). Their total sales per year is around 500,000 tonnes, with P1020 sales accounting for only 20,000-30,000 tonnes.

“Our demand in Brazil is more healthy for VAP. We will prioritize this chain because we have more long-term customers in it and greater profitability. It’s our choice to sell a smaller volume of ingots P1020,” he said. 

Follow discussions around decarbonizing the aluminium industry with the latest price trends, market insights and forecasts with Fastmarkets. Learn more from our dedicated green aluminium hub.

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“Transactional pricing is out there but it would be great if we had more transparency in the markets,” Harris added. “[Lithium] is not listed on [the London Metal Exchange] for example, we don’t have a future market.”

Fastmarkets’ latest price assessment for lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $10.00-11.20 per kg on Tuesday August 20, down by 0.93% from $10.00-11.40 from Monday August 19.

Meanwhile, Fastmarkets assessed the price for spodumene min 6% Li2O, spot price, cif China at $750-790 per tonne on August 20, stable from August 19.

Chinese lithium prices have been on a general downtrend in 2024, pressured by weak demand and oversupply. Several Chinese lithium producers are considering production cuts or complete suspension to mitigate losses from high costs amid the ongoing price declines and muted demand.

On April 4, Fastmarkets launched weekly price assessments for spot battery-grade and technical-grade lithium hydroxide and carbonate for the United States and Canada.

The movement followed feedback from market participants who are interested in seeing regional price references for lithium in the US and Canada that reflect the evolving battery supply chain in the region.

“In North America, demand is growing, [electric vehicle] penetration is slower than people thought but it’s still growing around 25% per year. We know that the market needs domestic supply but almost nobody’s doing anything about it, car companies or battery companies,” Harris said. 

The chairman believes that, although the lithium market has been characterized by low prices and oversupply, there will be an inflection point between 2024 and 2030, when people are going to need to secure domestic supply.

“In the long term, people want green energy, the government wants to support green energy and businesses are looking to provide green energy. EVs are a natural solution,” Harris said.

Surge Battery Metals owns the Nevada North Lithium Project, which has an estimated resource of 4.7 million tonnes of lithium carbonate equivalent with a grade of 2,839 part per million of lithium and an overall composite grade of 4,939 ppm in the Granite Range southeast of Jackpot, Nevada. 

“Our grade is 3-4 times the conventional clay deposits that people have been working on in North America and it is considered the highest clay lithium resource in America,” Harris noted. 

New projects in North America are facing challenges from Chinese investments in some regions such as Africa, which offer a cost advantage, according to Harris.

“They may have a competitive cost advantage, but, with the Inflation Reduction Act (IRA), they are not going to allow those batteries to be rebate eligible in North America,” Harris said.

The chairman also said that investing in non-US trading partner countries is not a solution due to the IRA. 

“We are not getting involved in a project in Argentina, for example, because if they ship raw lithium products to China to be upgraded and incorporated into batteries, those batteries will not qualify in the US under the current IRA,” Harris said, adding that it is better to focus on domestic supply.

Supply side for lithium

The market faces an oversupply in the short term, but it won’t last long as the market dynamics will adjust, according to Harris.

“As long as prices stay low, some companies will cut production, some will delay expansion and some of the feasibility stage companies will not get funded,” Harris said, but added, “The cure to low prices is low prices.”

“Since it takes a long time for supply to come on stream, it is inevitable that there will be another supply crunch. EV demand is still growing at 25%,” he said. 

Fastmarkets research team forecasts that available production for lithium in 2025 will reach 1,439,400 tonnes of lithium carbonate equivalent (LCE), while demand will reach 1,390,370 tonnes. 

According to ANZ analysts Daniel Hynes and Soni Kumari, slowing growth in EV sales and an oversupply in China’s battery capacity are likely to weigh on demand for battery metals. 

“Lithium, cobalt and nickel are likely to remain oversupplied in the short term, but the response from producers in cutting output amid the low prices should limit the downside. We see a strong long-term outlook. Supply still needs to increase by a factor of 1.5-3.5 over the next five years, which is a difficult goal,” they said in a report published on Sunday August 18.

The Nevada North Lithium Project

Surge Battery Metals produced its initial assessment of the Nevada North Lithium Project in February 2024. According to the estimate, the project contains an inferred mineral resource of 4.67 million tonnes of LCE with a grade of 2,839 ppm of lithium at a 1,250 ppm cut-off.

“We are in the preliminary economic and development phase. Based on additional drilling in 2024, we will release an updated [estimate] in September. We  are aiming to deliver a Preliminary Economic Assessment (PEA) in December this year,” Harris said.

“We don’t have a specific date to start producing, but based on similar project timelines, we estimate 2030 as a target start date,” Harris added.

The process to extract lithium will utilize the same flow sheet used at the sedimentary-clay deposit at Thacker Pass, which is the largest-known measured and indicated lithium resource in North America, according to owner Lithium Americas. 

The Thacker Pass project will use a newly-developed process to extract lithium from the clay deposit, similar to mining techniques for coal deposits. Usually, lithium is mined by either hard rock mining or brine mining. 

According to Lithium Americas, the production process is designed to use conventional and commonly available equipment, arranged to take advantage of the distinctive qualities of the high-grade ore. The process comprises a series of steps to concentrate, separate and produce battery-quality lithium chemicals.

“One of the key advantages of clay, unlike spodumene where you sell a concentrate and you get a discounted price, is that we can actually produce carbonate and/or hydroxide directly, ” Harris said.

“We can extract a premium price from the clays as we are producing a premium end product, ” Harris added, noting that spodumene is typically shipped to China to be upgraded into battery-grade lithium, which would disqualify it under the IRA.

Harris said, however, that producing lithium from clay requires more capital expenditure (capex) compared with spodumene.

“[There is less capex] in spodumene but you are getting a much lower price for your product. With clay, and our Nevada North project containing such high-grade lithium, we are hopeful that the [operational expenditure] will be more in line with traditional lower-cost brine projects,” Harris said.

In addition, Surge Battery Metals will try to secure funding from the Department of Energy.

“We will certainly be applying for [funding] because, for mining companies, when we are looking at traditional construction debt financing, it’s expensive. And… the IRA  that would greatly enhance the economics of the projects,” the chairman aid.

The IRA, which was signed into law on August 16, 2022, prohibits using critical minerals and battery components from a “foreign entity of concern,” which includes companies based in China, Russia, North Korea and Iran.

Data from the US International Trade Commission’s Interactive Trade DataWeb shows that the US imported nearly 154,000 lithium cells and batteries (excluding spent products) from China in 2022, up from nearly 109,000 units in 2021 and more than double the approximately 71,000 units imported in 2019. Indonesia, Japan and Singapore were the other major suppliers in 2022. 

From January through May of this year, however, US imports of lithium cells and batteries from China, Indonesia, Japan and Singapore fell significantly versus the same five-month period last year.

However, the global lithium market is still seeking more clarity on what lithium supply will qualify for the financial incentives offered by the policy. The definitions of IRA-compliant lithium have yet to be clarified and opinions on whether there would be any IRA premium for lithium are divided.

Gain a competitive edge with our lithium prices. Talk to us about our market-reflective lithium prices, data and analysis.

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The following paragraph was changed in the rationale for MB-AL-0020 aluminium P1020A premium, ddp Midwest US, US cents/lb:

“The LME C/3M spread was most recently trading at a $53.50/t contango on Tuesday, compared to $50/t on Monday”.

The published price was unaffected by this change.

This price is part of the Fastmarkets base metals package.

For more information or to provide feedback on this correction notice or if you would like to provide price information by becoming a data submitter to this price, please contact Yasemin Esmen by email at: pricing@fastmarkets.com. Please add the subject heading “FAO: Yasemin Esmen, re: Aluminium P1020 DDP US Midwest premium.”

Please indicate if comments are confidential. Fastmarkets will consider all comments received and will make comments not marked as confidential available upon request.

To see all Fastmarkets pricing methodology and specification documents, go to https://www.fastmarkets.com/methodology.

The post Correction to P1020 US premium rationale on August 13 appeared first on Fastmarkets.

But the White House announced on July 10 that aluminium that is shipped from Mexico must not contain primary material that was smelted or cast in China, Russia, Belarus or Iran, otherwise it does not qualify for that exemption and will be subject to a 10% tariff.

Material from Russia was already subject to a 200% tariff, thus resulting in a total rate of 210%.

The new measure requires aluminium importers into the US to present proof to the US Customs and Border Protection (CBP) of the material’s country of origin in the form of a certificate of analysis, showing that the country of first smelter, second smelter and casting is not one of the four listed above.

“[The decision] does not surprise us […]. Companies have the option of seeking alternative markets. In terms of volume, around 80% of all the aluminium exports from Mexico goes to the US,” Julio César Martínez Rivas, president of the National Chamber of the Aluminium Industry in Mexico (Canalum), told Fastmarkets.

“But the biggest concern right now is that [Mexican exporters] will have to seek certification. Regardless of what it is, if you are importing, you have to present a certificate of origin, which was not mandatory before. You must have a certificate even if you do not buy from China or Russia to demonstrate its origin. That’s [what] companies should be working [on] now. At Canalum, we are going to check which documents can be used,” Canalum’s president added.

Fernando Garcia Martinez, vice-president of operations at Mexican aluminium institute IMEDAL, said the US government has yet to clarify what the certificate of origin and analysis should cover, as well as if supplementary documentation will be required.

“Anyone who wants to export [Section] 232 products to the US must generate a license and declare the origin of their raw material. This has existed since last year. The new thing is that you must present a certificate of analysis, which previously was not necessary,” IMEDAL’s Garcia said.

“What we need to know is if it is a mandatory additional document. Perhaps it is now mandatory to present a certificate with chemical analysis and mechanical properties that mentions the country of first smelter, second smelter and casting with traceability data. We must wait for this requirement to be clarified,” he added.

A Mexican extrusion source told Fastmarkets that there is a lot of uncertainty – and there will be even more if former President Donald Trump wins the US presidential elections in November, according to the source – which prompted them to take a “stand by” approach.

“When asking for a certificate of origin, we will have a problem. I don’t know exactly how to get it. Even if I buy billet [from] Brazil or Argentina, they will ask me for this new certificate of origin,” they said.

No big impact

For IMEDAL’s vice-president of operations, the White House decision was not unexpected because the possibility of removing the exemption of Section 232 tariffs for aluminium coming from one of the four countries was already being discussed.

“What we didn’t know exactly was how this would be done,” Garcia said, adding that the measure does not widely affect the Mexican industry.

The products most affected by the new rules are products from Section 232, according to IMEDAL. They are:

• HS Code 7601: Ingot, billet, slab
• HS Code 7604: Extrusion Profiles, bar
• HS Code 7605: Wire rod
• HS Code 7606: Rectangular plate, sheet, strip
• HS Code 7607: Foil
• HS Code 7608: Tubes
• HS Code 7609: Tube accessories
• HS Code 7616: Castings

“[The measure] only affects these products; and most of the Mexican aluminium exports to the USA are already incorporated into finished products that are not [included in Section] 232,” Garcia said.

“For example, 60% of aluminium production in Mexico is castings, which are components for cars, and this is already incorporated into the vehicle. And many other products, such as air conditioning, are not affected because they are not exported as semi-finished products,” he added.

According to Garcia, the largest export from Mexico that is affected by Section 232 is secondary aluminium ingot, but because it is produced from Mexican scrap, it meets origin requirements. Also, extrusions are exported in a great quantity to the US.

“[Secondary aluminium ingot and extrusions] are the ones with the largest export volume, I would say. The good news is that almost no one uses aluminium from these four sources [Belarus, China, Iran and Russia],” he said.

“In a nutshell, we see that Mexico would have to be supportive of these measures and it seems like a fair solution that does not affect our industry and effectively limits indiscriminate use of Mexico as a platform for simulated source export,” Garcia added.

A Mexican secondary producer told Fastmarkets that they are happy with the measure.

“I only use Mexican aluminium post used scrap and I only import from non-sanctioned countries,” they said.

Stay ahead of the curve with market-reflective aluminium price data, aluminium price charts for aluminium scrap to low carbon aluminium. Learn more with our aluminium prices hub.

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