aluminum

In case anyone needed a visual reminder of how the EV revolution is adding fuel to the fire of the overall critical minerals challenge we’re facing, Visual Capitalist has put together a handy graphic depicting the material inputs for EV batteries.

Here’s a snippet – for the full graphic and context, click here.

The infographic uses data from the European Federation for Transport and Environment, which bases the mineral content on the ‘average 2020 battery’ — the weighted average of battery chemistries on the market in 2020.  Friends of ARPN will recognize familiar elements:  graphite, copper, manganese, nickel, aluminum, cobalt and, of course, lithium.  (All of which – with the exception of copper – are U.S.-Government designated “Criticals.”  To revisit our case for copper as a “Critical,” see HERE and HERE.)

As Visual Capitalist notes,

“The EV battery market is still in its early hours, with plenty of growth on the horizon. Battery chemistries are constantly evolving, and as automakers come up with new models with different characteristics, it’ll be interesting to see which new cathodes come around the block.”

Of course, as ARPN has consistently argued, the issue goes well beyond the “battery criticals,” and we’re thankful to see that as mainstream awareness is rising, so is the realization that our critical minerals challenge extends across vast swatches of the periodic table, and encompasses both sourcing and processing of many metals and minerals.

Some steps have been taken, but much more remains to be done. Against the backdrop of ever-increasing stakes, the time for stakeholders to act decisively to implement an all-of-the-above strategy on critical mineral security is now.

In recent months, industry news has been dominated by headlines like “carmakers face raw material bottleneck.”

And while, rightfully, against the backdrop of the accelerating green energy transition and EV revolution, much of the coverage focuses primarily on supply chain challenges arising for the battery criticals Lithium, Cobalt, Nickel, Graphite and Manganese, it’s not just the battery materials that are giving automakers headaches these days.

A case in point is luxury carmaker Ferrari’s recent announcement that “soaring commodity prices would begin affecting the prices of its new supercars.”

While the company has reportedly seen “better-than-expected fourth-quarter earnings as shipments jumped during the pandemic” according to ZeroHedge.com, prices for its supercars, currently ranging between $200k and $400k would likely see increases as there is “some pressure on the energy on the aluminum cost (…),” with aluminum being a material on which Ferrari relies heavily in the construction of its frames, engines, transmissions, body, suspension, paneling and rims.

However, aluminum is not just a key component for luxury supercars – its light weight, corrosion resistance and its recyclability make it a material of choice in the lightweighting revolution (ARPN followers may recall the Light Rider) and the overall green energy transition.

But, as the Ferrari announcement indicates, trouble is on the horizon. As ZeroHedge.com outlines, “rocketing power prices across [Europe] shuttered four aluminum smelters which curtailed about half a million tons of annual capacity. European aluminum prices have surged more than 350% since the pandemic low in early 2020 to about 450 euros per ton.”

The “winter of discontent for Europe’s aluminium smelters,” as Reuters columnist Andy Home described the recent struggle of aluminum smelters in the region, will likely widen the already existing regional supply deficit as Europe, even before the closures, was already a net importer of primary aluminum.

As Home notes, “[t]the United States is also a net importer of primary aluminium and is now facing increased competition from Europe for spare metals. And both are in competition with China, which is importing significant volumes after a run of power-related curtailments across its huge smelter network.”

Home invokes what he calls the “aluminium  paradox”:

“It’s a metal that is core to the energy transition, but can only be produced in virgin form using very large amounts of energy, which is increasingly at a premium due to decarbonization.”

Not far from this is the “inherent irony” or “paradox of the green revolution” Home invoked elsewhere, referring to the paradox that “public opinion is firmly in favour of decarbonisation but not the mines and smelters needed to get there.”

It’s time for a reckoning, we clearly can’t have our cake and eat it, too.  Achieving global (and domestic) decarbonization goals while at the same time strengthening our supply chains and reducing our over-reliance on critical minerals from China will require a comprehensive “all of the above” approach across the entire value chain. But, as ARPN’s Daniel McGroarty has pointed out on several occasions, “we don’t have the luxury of time” anymore.  The reckoning needs to happen at Ferrari supercar speeds.

In a new piece for The Hill, ARPN’s Dan McGroarty zeroes in on the inter-relationship of trade and resource policy, which has been an increasingly recurring theme over the past few months. McGroarty argues that the removal of U.S. tariffs on steel and aluminum coming from Mexico and Canada, which have been a “dead weight on [...]

While 2018 brought the inter-relationship between trade and resource policy to the forefront, this trend is continuing in 2019.   Last week, the White House announced sanctions on Iranian metals, which represent the Tehran regime’s biggest source of export revenue aside from petroleum.  The sanctions on Iran’s iron, steel, aluminum and copper sectors represent the [...]

In an interview with Fox and Friends, U.S. Senator Chuck Grassley (R, Iowa) discusses the path to what he terms a major trade victory for the U.S.  In order for this to happen, he believes removing the Sec. 232 tariffs from the USMCA, the new and yet-to-be-ratified U.S.-Mexico-Canada trade deal to replace NAFTA struck in [...]

The partial shutdown of the federal government at the beginning of this year had delayed its release, but last week, USGS published its 2019 Mineral Commodity Summaries. Followers of ARPN will know that we await the publication’s release with somewhat bated breath every year, as especially “Page 6” – the chart depicting U.S. Net Import [...]

News headlines these days are full of doom and gloom. As the Guardian writes, “whether or not the world really is getting worse, the nature of news will interact with the nature of cognition to make us think that it is.” Against this backdrop, it’s nice to see a little – albeit cautious – optimism [...]

While specialty and tech metals like the Rare Earths and Lithium continue to dominate the news cycles, there is a mainstay metal that has – for good reason – been making headlines as well: Aluminum.  Bloomberg recently even argued that “Aluminum Is the Market to Watch Closely in 2019.”  Included in the 2018 list of 35 [...]

In case you hadn’t noticed amidst holiday preparations, travel arrangements and the usual chaos of everyday life – 2019 is just around the corner, and with that, the time to reflect on the past twelve months has arrived. So here is ARPN’s recap of 2018: Where we began. Unlike previous years, we started 2018 with [...]

“Now that President Trump has won agreement to replace NAFTA with the USMCA — the new U.S.-Mexico-Canada trade agreement — he has an opportunity to build on that accomplishment, and broaden the benefits of trade to strengthen national security,” writes ARPN Principal Daniel McGroarty in a new op-ed for The Hill. The next step, says McGroarty, [...]