Energy & Commodities

The $5 billion hoard of metal the world wants but can’t have

On an industrial park about an hour’s drive toward the South China Sea coast from Ho Chi Minh City sit giant mounds of raw metal shrouded in black tarpaulin. Stretching a kilometer in length, the much-coveted hoard could be worth about $5 billion at current prices.

In the esoteric world of aluminum, those in the know say the stockpile in Vietnam is the biggest they have ever seen — and that’s in an industry that spends a lot of time building stockpiles while analysts spend a lot of time trying to locate them. But as far as the increasingly under-supplied market is concerned, it’s one that may never be seen again.

Why it’s unlikely to move anytime soon involves Vietnam’s customs authorities. How its existence has become so significant, meanwhile, opens a window on a ubiquitous, yet erratic commodity at a time when makers of everything from car parts to beer cans are competing for more of it as they emerge from the coronavirus pandemic and China throttles supply.

While there used to be millions of tons of aluminum at ports from Detroit and New Orleans in the U.S. to Rotterdam in Europe and Malaysia’s Port Klang, market watchers say the stockpile 50 kilometers (31 miles) from Vietnam’s biggest city is likely the only notable one left.

To put it in perspective, it’s equivalent to the entire annual consumption of India, the world’s second-most populous country, said Duncan Hobbs, a London-based analyst at commodities trader Concord Resources who has been covering metals markets for 25 years.

“We’re seeing the deepest deficit in the world market in at least 20 years, and this stockpile would not only fill that deficit, but it would leave you with something leftover as well,” he said…read more.

Deutsche Bank Bucks Bullish Oil Predictions

Deutsche Bank expects crude oil prices to drop considerably next year, dipping below $60 per barrel in New York, the bank said in a note.

“It would be misguided to think of an OPEC pause on Thursday as bullish, since we have assumed that in our model and still end up with a surplus in Q1,” the Deutsche analysts said, as quoted by Bloomberg. “We would be sellers of a rally in crude on the back of an OPEC pause,” they also said.

Most other banks are forecasting higher prices for crude oil: JP Morgan analysts recently forecast Brent crude reaching $125 per barrel in 2022 and rising further to $150 in 2023.

“OPEC+ is not immune to the impacts of underinvestment…. We estimate ‘true’ OPEC spare capacity in 2022 will be about 2 million barrels per day (43%) below consensus estimates of 4.8 million,” the team, led by Christyan Malek, wrote in a note.

The JP Morgan analysts don’t appear to be expecting a surplus in global oil supply even in the first quarter of next year. Instead, they are noting that OPEC+ might need to add a few more installments of 400,000 bpd monthly to bring the market closer to balance.

Morgan Stanley, on the other hand, earlier this week slashed its oil price forecast on the latest Covid-19 scare caused by the emergence of the highly mutated omicron variant. The bank previously forecasted that Brent will trade at an average of $95 per barrel in the first quarter of 2022—but now this has been revised down to $82.50 per barrel…read more.

Burnaby refinery runs out of oil, halts refining

Trans Mountain Corp. hopes to have the pipeline that supplies the Lower Mainland with oil for refining, as well as refined fuels from Alberta, back in operation by the end of this week, if, as the late songwriter Jerry Reed put it, “the good Lord’s willing and the creeks don’t rise.”

The pipeline was shut down as a precautionary measure, due to the instability caused by flooding, and now more heavy rains are in the forecast.

Meanwhile, the only refinery in southwestern B.C., the Parkland Fuels (TSX:PKI) refinery in Burnaby, has run out of oil and has stopped refining.

Gasoline is being barged in from the U.S., and rules have been relaxed to allow Lower Mainlanders to skip across the U.S. border to buy gas without being subject to COVID-19 testing.

“If all planning and work continues to progress and no further issues with the pipeline are assessed, Trans Mountain is optimistic that we can restart the pipeline, in some capacity, by the end of the week,” Trans Mountain says in a press release.

“Key to successful execution of the restart plan will be access for equipment, fair weather, and no new findings of concern.”…read more.

Rare Earth Elements: Where in the World Are They?

Rare Earths Elements: Where in the World Are They?

Rare earth elements are a group of metals that are critical ingredients for a greener economy, and the location of the reserves for mining are increasingly important and valuable.

This infographic features data from the United States Geological Society (USGS) which reveals the countries with the largest known reserves of rare earth elements (REEs).

What are Rare Earth Metals?

REEs, also called rare earth metals or rare earth oxides, or lanthanides, are a set of 17 silvery-white soft heavy metals.

The 17 rare earth elements are: lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), promethium (Pm), samarium (Sm), europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb), lutetium (Lu), scandium (Sc), and yttrium (Y).

Scandium and yttrium are not part of the lanthanide family, but end users include them because they occur in the same mineral deposits as the lanthanides and have similar chemical properties.

The term “rare earth” is a misnomer as rare earth metals are actually abundant in the Earth’s crust. However, they are rarely found in large, concentrated deposits on their own, but rather among other elements instead.

Rare Earth Elements, How Do They Work?

Most rare earth elements find their uses as catalysts and magnets in traditional and low-carbon technologies. Other important uses of rare earth elements are in the production of special metal alloys, glass, and high-performance electronics.

Alloys of neodymium (Nd) and samarium (Sm) can be used to create strong magnets that withstand high temperatures, making them ideal for a wide variety of mission critical electronics and defense applications…read more.

Scientists want to engineer bacteria to sustainability mine rare earths

A new study published in Nature Communications describes a proof of principle for engineering a bacterium, Gluconobacter oxydans, that takes a first step towards meeting skyrocketing rare earth element demand in a way that matches the cost and efficiency of traditional thermochemical extraction and refinement methods and is clean enough to meet US environmental standards.

“We’re trying to come up with an environmentally friendly, low-temperature, low-pressure method for getting rare earth elements out of a rock,” Buz Barstow, the paper’s senior author and an assistant professor at Cornell University, said in a media statement.

To meet US annual needs for rare earth elements, roughly 71.5 million tonnes of raw ore would be required to extract 10,000 kilograms of elements.

Current methods rely on dissolving rock with hot sulphuric acid, followed by using organic solvents to separate very similar individual elements from each other in a solution.

“We want to figure out a way to make a bug that does that job better,” Barstow said…read more.