Weekly Metals News Digest – Feb 17-21

Aluminium Prices Poised for Decline Amid Rising Production and Stockpiles

Global aluminium prices are displaying volatility and may soon face downward pressure as China ramps up production following the extended Chinese New Year celebrations. The resumption of business activity is expected to boost aluminium output, adding to an already well-supplied market.

Additional pressure on aluminium prices comes from growing stockpiles of Russian metal in London Metal Exchange (LME) warehouses. In December 2024, Russian aluminium accounted for 56% of total LME stocks, increasing to 67% in January 2025. Meanwhile, aluminium inventories from India have declined.

Japan, one of the world's largest aluminium importers, also saw a significant stock build-up. By December 2024, aluminium reserves in Japanese ports had risen 13.2% from the previous month to 323,600 tonnes.

According to the International Aluminium Institute, global primary aluminium production reached 6.236 million tonnes in December 2024, reflecting a 3% increase from the same period in 2023. Chinese aluminium exports surged 17% in the first ten months of 2024, reaching 5.5 million tonnes.

Meanwhile, discussions within the European Union over potential sanctions against Russian aluminium continue. Since 2022, European buyers have gradually reduced their imports of Russian semi-finished aluminium products. The situation intensified in April 2024 when LME imposed a ban on storing Russian non-ferrous metals in its warehouses. If new sanctions materialize, Russia may redirect exports to Asian markets, particularly China. However, with an already saturated market, Russia might struggle to place all of its excess metal. India and South Korea may absorb some of the supply, but demand in Africa remains weak, and shipping to South America is expensive.

Should an embargo on Russian aluminium be imposed, global prices may briefly spike before settling lower, potentially affecting the profitability of aluminium producers in Asia, Europe, and North America.

Korea Zinc Seeks Dominance in the Global Indium Market

Korea Zinc, one of the world’s leading zinc producers, is aiming to expand its influence in critical minerals such as tungsten, tellurium, bismuth, molybdenum, and indium. The company’s move comes amid China's tightening control over exports of these materials, sparking concerns over potential disruptions in global supply chains. The United States, which heavily relies on imports of these metals, has expressed particular alarm over the situation.

Indium is of strategic importance, being a key component in the production of solar cells, liquid crystal displays, 5G optical communication systems, and lasers. Korea Zinc currently produces approximately 150 tonnes of indium per year, extracting it from zinc concentrates and secondary raw materials.

In 2023, global indium production and demand stood at roughly 1,400 tonnes, with China accounting for half of the total supply. Even before the latest export restrictions, fluctuations in Chinese indium supply caused market instability. In 2024, the average price for indium stood at $317 per kilogram.

According to the U.S. Geological Survey, South Korea supplied around 30% of U.S. indium imports between 2020 and 2023. With China now controlling indium exports, South Korea is expected to increase its supply to the U.S. market. Meanwhile, industry experts predict that demand for indium in the semiconductor sector will rise as artificial intelligence technology advances. Sales of indium phosphide, a key indium-based compound used in electronics, surged 67% in Q2 2024 compared to the previous year, underscoring the metal’s growing importance.

Anglo American Sells Nickel Assets to MMG Singapore Resources

Anglo American has reached an agreement to sell its nickel business to MMG Singapore Resources for $500 million. The deal includes the Jacaré and Morro Sem Boné nickel development projects, along with the Barro Alto and Codemin ferronickel smelters, all located in Brazil.

The assets vary significantly in scale: Jacaré contains 300 million tonnes of nickel ore reserves, while Morro Sem Boné has inferred resources of 65 million tonnes. The Barro Alto and Codemin smelters produced a combined 39,400 tonnes of ferronickel in 2024.

The sale aligns with Anglo American’s strategy to streamline its portfolio. The company plans to divest not only its nickel and coal businesses but also De Beers, the world’s largest diamond mining company. Instead, Anglo American will focus on iron ore, copper, and agricultural fertilisers.

With the nickel and coal sales combined, Anglo American expects to generate up to $5.3 billion in proceeds, according to CEO Duncan Wanblad.

MMG Singapore Resources is a subsidiary of China’s MMG, which is active in base metals trading and exploration projects in Africa, Australia, and Latin America. The acquisition is subject to regulatory approval and is expected to close in Q3 2025.

The deal follows prolonged weakness in global nickel prices, which have deterred investment. According to the Brazilian mining association Ibram, mining companies in Brazil plan to invest $3.8 billion in projects between 2025 and 2029, down from the previously projected $4.4 billion for 2024-2028.

Ukraine’s Rare Earth Deposits Stir Geopolitical Interest

Global attention remains fixed on Ukraine amid reports of possible ceasefire negotiations with Russia. At the same time, discussions over a potential agreement between Ukraine and the U.S. regarding rare earth metal supplies have sparked intrigue.

Ukraine holds deposits of 23 out of 50 minerals classified as critical by the U.S. government and 26 out of 34 recognized by the European Union. These include titanium, lithium, beryllium, and rare earth elements.

Titanium and beryllium are essential for aerospace and industrial applications, with Ukraine ranking among the world’s top five in titanium reserves. However, its production of titanium sponge and alloys has been dormant. While Ukraine’s lithium reserves are modest on a global scale, they are substantial within Europe. Rare earth deposits in Ukraine remain relatively unexplored.

The U.S. is seeking access to Ukraine’s rare earth reserves in exchange for continued aid, which has already amounted to $350 billion. Ukrainian President Volodymyr Zelenskyy has indicated willingness to negotiate but insists on U.S. security guarantees in return. He recently blocked an initial agreement draft, calling for a more detailed plan on what Ukraine would receive in exchange.

Meanwhile, former U.S. President Donald Trump has stated that he wants a return on U.S. aid to Ukraine, ensuring that the U.S. does not “feel stupid.” However, uncertainties remain regarding the actual size and feasibility of Ukraine’s rare earth deposits, raising doubts about potential investment from the U.S. or other nations.

Indonesia to Boost Nickel Recycling Amid Market Volatility

Indonesia plans to launch an electric vehicle battery recycling plant by 2031, with Indonesia Battery Corporation leading the project. This initiative aligns with the country’s broader policy of increasing domestic mineral processing.

Indonesia’s government has long sought to establish itself as a major player in the battery industry. Four years ago, Investment Minister Bahlil Lahadalia stated that Indonesia aimed to become the world’s leading battery producer, emphasizing that the country should be known not only for tourism but also for industrial advancements.

In 2024, Indonesia considered curbing nickel ore production to support prices amid oversupply. Nickel prices have plummeted by 40% over the past two years due to excessive supply from Indonesia and slowing global EV sales. The resulting price crash has forced some nickel mines outside Indonesia to shut down, eroding profits for domestic producers.

Indonesia’s 2024 nickel ore production quota stood at 270 million tonnes, but in 2025 it may be reduced to 150–200 million tonnes. Since banning nickel ore exports in 2020, Indonesia has attracted substantial foreign investment, primarily from Chinese firms. The country produced 2.02 million tonnes of refined nickel in 2024, accounting for 57% of global output. In 2025, its share is expected to rise to 62%, solidifying Indonesia’s dominance in the nickel market.