Brazil is advancing in its energy transition efforts with new renewable diesel and sustainable aviation fuel mandates that have drawn investor interest in the domestic market. The country aims to enhance regional supply security and meet energy transition requirements. The 'Fuels of the Future' bill, which supports these mandates, was approved by the lower house of Brazil's National Congress on March 13 and is awaiting an urgent vote in the senate.

US metallurgical coal exports have experienced growth due to demand from Asia, particularly in India, China, and Southeast Asia. This growth is linked to expansions in blast furnace steelmaking and met coke production. The economic growth in emerging Asian markets is expected to sustain long-term steel demand, driven by construction, infrastructure, and consumer products.

A total solar eclipse on April 8 crossed North America, affecting Mexico, the US, and Canada, and led to significant reductions in solar power plant output, particularly in the Electric Reliability Council of Texas and PJM Interconnection power markets.

The article discusses several key commodities and their outlook in the context of current global events. It highlights the anticipation for resolutions on emissions trading rules under Article 6.4 of the Paris Agreement at the UN Climate Change Conference (COP28) in Dubai. The article also touches upon the potential impact of OPEC+ members' decision on voluntary oil production cuts in early-2024. Additionally, it covers Russian wheat production, US natural gas output, and the EU's consideration of extending its gas market correction mechanism. These topics are crucial for understanding the future trends in commodity markets and their broader economic implications.

China has reduced subsidies for electric vehicles to stabilize the market and eliminate underperformers, with the subsidy for pure battery EVs with driving ranges of 400 km or more cut by 50%. The car sector's copper consumption is expected to rise significantly by 2025 due to increased car output, according to Jiangxi Copper's subsidiary Jinrui Futures.

Japan will investigate whether the US' Section 232 probe into titanium sponge imports complies with WTO rules, as stated by Minister Hiroshige Seko. The US Department of Commerce's investigation aims to determine if these imports harm US national security. Japan, which supplied the majority of the US' titanium sponge imports in 2018, emphasizes the importance of a rule-based multilateral trade system. Previous US tariffs on steel and aluminum led to multiple WTO complaints, with Japan participating as a third-party observer. The outcome of these proceedings remains uncertain.

Chilean miner Antofagasta reported a 30% increase in molybdenum production for 2018, reaching 13,600 mt, attributed to higher throughput, grades, and recovery rates at the Los Pelambres mine. However, a 12% decline in molybdenum production is expected for 2019, with an estimated output of 11,500-12,500 mt. Despite this, copper production is projected to rise by 6% to a record high of 750,000-790,000 mt. Other Chilean mines are also expected to reduce molybdenum production in 2019, though ramp-up projects in Peru may offset these decreases.

Japanese industry officials express uncertainty about the US Treasury Department's plan to lift sanctions on Russian aluminum producer Rusal, pending US Congress approval. The US Office of Foreign Assets Control has indicated a potential termination of sanctions, but clarity is expected after January 28. The US House of Representatives opposed the sanctions termination, while the Senate supported it. Rusal and EN+ have taken steps to reduce Oleg Deripaska's influence and comply with US requirements. Market participants remain cautious, anticipating possible extensions of General Licenses allowing Rusal to continue operations.

Japanese industry officials express uncertainty about the US Treasury Department's plan to terminate sanctions against Rusal, suggesting it would be prudent to wait until January 28 or later for more clarity. Despite OFAC's notice to Congress, the official announcement is pending. Market participants are cautious, with some expecting possible extensions of General Licenses. The US House of Representatives voted against the sanctions termination, while the Senate voted in favor. Rusal and EN+ have taken steps to comply with OFAC requirements, including reducing Oleg Deripaska's stake and committing to monthly compliance reports.

Tensions between the US and China over trade are expected to ease ahead of China's People's Congress in March, according to Osamu Tanaka, a senior researcher at the Japan External Trade Organization. Tanaka suggests that China will seek to compromise with the US to maintain political and economic stability during the 70th anniversary of the People's Republic of China. He emphasizes that stability is China's top priority, with employment being a key focus. The Chinese government aims to resolve trade issues by March to avoid major economic damage, despite challenges in meeting GDP growth targets for 2019. New economic plans include industry-specific policies to address supply chain disruptions caused by trade wars.

South Korean ferrovanadium and ferromolybdenum producers are negotiating 2019 conversion contracts with international traders, leveraging South Korea's free trade agreements with key markets like the EU, US, and India. The EU and US impose import duties on these ferroalloys, but South Korean conversion terms have become more competitive. South Korea's six smelters have a combined capacity of 4,500 mt/month, with the industry being export-driven. Limited domestic raw material supplies mean traders provide the necessary inputs, often from China or Chile. Busan has become a significant spot moly market center in Asia, potentially rivaling Rotterdam.

Russian aluminum producer Rusal reported a 33.6% increase in aluminum sales for Q3, attributed to the US extending the wind-down period for sanctions. The company sold 1,046,000 mt of aluminum, generating $2.9 billion in revenue. Despite sanctions imposed in April, the wind-down period allowed Rusal to maintain business levels, leading to a recovery in Q3 sales. Year-to-date sales were down 5.4%, but production increased by 1.7%. The company's revenue for the first nine months of 2018 was $7.9 billion, up 9.6% from the previous year, driven by higher aluminum prices on the London Metal Exchange.

Japanese steelmakers remain unaffected by the global ferrovanadium shortage due to reliance on local suppliers and protective contracts. Local suppliers Taiyo Koko and JFE Materials have met the demand, eliminating the need for imports. The global demand for ferrovanadium has surged, driven by China's new building regulations and increased orders from earthquake-prone regions. Despite the tight supply and rising prices, Japanese steelmakers with annual contracts are assured of continued supply. The article highlights the stability in Japan's ferrovanadium market amidst global shortages.

China imported approximately 500 mt of roasted molybdenum oxide and 1,000-2,000 mt of unroasted moly concentrate in October, with imports likely increasing from September due to stronger demand. Detailed import and export statistics have not been released by China's government since April due to technical issues. Traders estimate that October imports included cargoes in bonded warehouses and those cleared for consumption in China. Stocks were moved from Busan to Tianjin for potential processing into chemical moly products or storage. Spot prices below $12/lb led to several containers being delivered into China. China, the largest moly producing nation, is seeking imports due to increased demand for stainless steel and potential mine and plant closures after government environmental checks. In 2017, China's total imports of roasted moly oxide and unroasted con totaled 28,559 mt.

Chile's state-run Codelco has proposed supplying molybdenum oxide to Chinese buyers in 2019 at a price 0.5% below the Platts benchmark, an increase from the previous year's 1% discount. This offer indicates a tightening market, though not to the extent that demand will surpass supply. Meetings with Chinese companies were held in Shanghai, with plans to visit South Korea and Japan. Other Chilean producers are also negotiating with Asian buyers, with varying discount offers. Rising labor and power costs, along with deteriorating ore quality, are increasing cost pressures for Chilean miners. China's own production and recent import duties on US molybdenum products amid the trade war are influencing market dynamics. Codelco remains a significant exporter to China under the free trade agreement established in 2005.

Around four molybdenum oxide production plants in China's Liaoning province have suspended production ahead of government environmental inspections. The suspensions, expected to last about a week, have led to a loss of approximately 150 mt/day of output. Larger roasting plants have also reduced output in preparation for inspections. The inspections focus on sulfur emissions, air quality, and water standards. Chinese steelmakers are experiencing low stocks of ferromolybdenum, potentially leading to shortages. Some companies are considering importing moly oxide feedstock. Prices for moly oxide and moly concentrate have been reported, with tenders awarded at around Yuan 138,000-139,000/mt.

Chinese ferrochrome prices declined due to weak buying interest, while molybdenum prices increased amid tightening supplies in China. Nickel briquette premiums remained stable, driven by demand for use in transport vehicles and battery sectors. Market sources highlighted the impact of soft steel prices and competition from Southeast Asian mills on input costs. The tight supply of molybdenum and nickel earlier in the year has eased, encouraging production increases.

The gap between European and Asian spot secondary auto-grade aluminum alloy prices is impacting the Japanese market. European 226 alloy prices have dropped to their lowest since 2014, while Asian ADC12 alloys are priced higher. European producers are offering larger volumes at lower prices due to weak market conditions and the upcoming Christmas season. Japanese traders are hesitant to buy due to uncertain price outlooks and longer delivery times. Chinese and Malaysian aluminum alloy prices remain higher, with Chinese producers sold out for December and offering January shipments. The Japanese demand outlook is stable, but it is uncertain if it can absorb the excess European supplies.

Spot molybdenum concentrate prices have increased this month due to strong demand from Chinese moly oxide producers, in anticipation of 2019 term contractual negotiations. Prices for South American molybdenum concentrate, a feedstock for moly oxide, were reported higher by 5%-8% compared to the current year's term price. The increase is attributed to a supply shortage caused by Chinese government environmental restrictions. This has led to increased inquiries for both spot and 2019 term molybdenum concentrate. Negotiations for moly oxide and ferromoly, used in specialty steel production, have begun in Asia, focusing initially on volumes. Despite the concentrate shortage, the domestic Chinese demand and supply of ferromoly are balanced, with demand at 7,000-10,000 mt/month.

Japanese consumers are still negotiating the fourth quarter aluminum premium for billet, slab, and foundry alloys, with some agreements set at $103/mt plus London Metal Exchange cash, CIF Japan, down 22% from Q3's $132/mt. Talks with two producers remain unsettled, with bid/ask levels at $103-$109/mt CIF. The upcharge for processing standard ingot into billet, slab, and alloys is fixed for the year. S&P Global Platts reported the Q4 premium for standard P1020/P1020A aluminum ingot settled at $103/mt plus LME cash, CIF Japan.

The premium for imported primary aluminum in Japan for Q4 has been assessed at $103/mt plus LME cash, CIF main Japanese ports, marking a 22% decrease from Q3. This assessment is based on 10 settlements for seaborne P1020/P1020A ingot shipments over October to December, with a total volume of 8,000-10,000 mt/month. The settlements were part of annual contracts with quarterly negotiated premiums. Two settlements were excluded from the assessment due to non-compliance with Platts specifications.

Japanese primary aluminum consumers are considering using more scrap aluminum due to a widening price gap caused by falling scrap prices. The increase in domestic supply from higher imports and reduced buying from China, due to government restrictions, has put downward pressure on scrap prices. Japan's aluminum and aluminum alloy scrap imports rose by 12.5% year on year in the first half of 2018, while exports dropped slightly. The price of clean 6063 extrusion scrap is currently lower than that of standard P1020 primary aluminum ingot, and the gap is expected to increase.

Offers for Russian AK5M2 aluminum feedstock in Japan have dropped by 10% over the past month due to decreased demand in Europe, Russia's primary export market. The decline in European demand for DIN226, used in automotive components, is attributed to the implementation of the Worldwide Harmonized Light Vehicle Test Procedure (WLTP). This has led Russian suppliers to shift production to AK5M2 for export to Japan. Despite the lower offers, Japanese buyers remain cautious due to the global price fall in secondary aluminum alloys, influenced by the US-China trade war. The bearish sentiment in the alloy market and a shift towards local scrap supplies in Japan further complicate the situation for Russian sellers.

Negotiations for Japanese fourth-quarter aluminum premiums have resulted in eight settlements at $103/mt plus LME cash, CIF Japan, marking a 22% decline from the previous quarter. Despite ongoing talks with over 10 companies, offers from producers range between $110/mt and $112/mt plus LME cash, while Japanese buyers are bidding $103/mt or less. Russian producer Rusal's offer of $111/mt has not been met with responses due to US sanctions. Japanese import volumes from Russia have remained stable despite the sanctions, with some companies suspending transactions based on bank policies.

A fire at Nippon Steel & Sumitomo Metal Corporation's Muroran plant in Hokkaido, Japan, caused by an oil storage plant leakage managed by Mitsubishi Steel following a 6.7 magnitude earthquake, is under control according to the Ministry of Economy, Trade & Industry. Toyota Motor has halted operations at its automotive component manufacturing plant in Tomakomai city due to the earthquake, with a decision on resuming operations pending.

A 6.7 magnitude earthquake in Hokkaido, Japan, caused a power outage that is likely to suspend manufacturing operations on the island for about a week. Toyota Motor, Nippon Steel, Sumitomo Metal Corp, Japan Steel Works, and Mitsubishi Steel have all shut down operations in the region. Beer brewers Kirin, Asahi, and Sapporo also halted production at their local plants. The Ministry of Economy, Trade and Industry reported damages to the Tomatoh power plant and stated that it would take about a week for full recovery. Hokkaido Electric Power is working to restart hydropower plants and restore the power supply.

An aluminum producer and a Japanese trader have agreed on a fourth-quarter contract premium of $103/mt plus London Metal Exchange cash, CIF Japan, marking a 22% decrease from the previous quarter's $132/mt. The agreement covers 500-1,500 mt/month of P1020 aluminum ingot to be shipped to Japan from October to December. This settlement follows initial offers from producers at $115/mt and $112/mt plus LME cash CIF Japan. The ongoing negotiations, involving up to five producers and 15 Japanese buyers, are expected to conclude by the end of the month.

Global aluminum producer Rio Tinto has offered Japanese buyers a premium of $112/mt plus London Metal Exchange cash, CIF Japan, for the fourth quarter, marking a 15% decline from the previous quarter's premium. Another producer has verbally communicated a Q4 offer of $115/mt plus LME cash CIF Japan. Rio Tinto declined to comment on the matter.

The London Metal Exchange (LME) is considering launching a nickel sulfate premium contract to expand its battery metals futures offerings, following the introduction of cash-settled lithium and cobalt contracts. Oscar Wehtje, LME's product development head, highlighted the growing demand for primary nickel in the battery sector, projected to rise significantly by 2027. Japanese market participants emphasized the need for more industry-wide discussions to enhance market transparency and opportunities. The article also notes potential challenges in developing a robust pricing mechanism due to limited market participants and the risk of splitting liquidity with multiple contracts.

An aluminum producer has offered Japanese buyers a price of $115/mt plus London Metal Exchange cash, CIF Japan, for Q4 shipments, marking a 13% decrease from Q3's $132/mt. The reduction reflects eased concerns over US sanctions on Russian producer Rusal affecting global aluminum supplies. Japanese buyers, noting high stock levels at main port warehouses, have not placed counterbids and are awaiting offers from other producers. The Q4 premium negotiations are expected to conclude by the end of September.