Yves here. Yet another example of how incoherent and poorly thought out the US economic escalation against China is.
By Metal Miner, the largest metals-related media site in the US according to third party ranking sites. Cross posted from OilPrice
- Silicon and cobalt prices, continue to experience drops due to lingering renewable energy supply bottlenecks from 2023.
- The United States relies heavily on China for its solar panel supply.
- According to some estimates, 70% of U.S. transformer units are at least 25 years old, while 15% are older than 40 years.
The Renewables MMI (Monthly Metals Index) continued its slight downward trend month-on-month, dropping by 3.8%. Two large components of the index, silicon and cobalt prices, continue to experience drops due to lingering renewable energy supply bottlenecks from 2023. This, along with falling grain-oriented electrical steel prices, brought the index down
Silicon for Solar Panels: A Geopolitical Imbalance?
The United States relies heavily on China for its solar panel supply. However, this dependence on Chinese manufacturing raises several concerns. One issue of note is the alleged use of forced labor in China’s Xinjiang area, which generates a significant portion of the world’s polysilicon, the primary component used in solar panels.
Due to evidence of forced labor abuses against Uyghur and other Muslim minorities, the U.S. government has placed restrictions on the importing of items made in Xinjiang. But because it is difficult for companies to obtain the required documentation to prove that their items have nothing to do with forced labor, shipments of solar panels from China continue to be delayed and confiscated as a result.
The hazards to the global supply chain posed by China’s dominance of solar panel production are another significant cause for worry. For example, 14% of the world’s polysilicon stems from a single facility in China, and interruptions at these plants have the potential to affect the entire global sector.
There are also many environmental concerns due to the over-dependence on Chinese manufacturing. The primary source of electricity used in China’s polysilicon manufacture is coal-fired power, which raises the carbon footprint of solar panels. That said, it is possible to decrease these overall emissions by moving production to areas with cleaner energy sources.
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Addressing These Issues
There are initiatives underway to support domestic solar panel manufacturing in the United States in order to overcome these problems. However, the nation’s demand continues to grow faster than its production capability, meaning imports will have to continue for the time being.
China is the world’s largest producer of solar panels, reducing prices and improving accessibility. However, the United States’ dependence on Chinese imports raises questions about forced labor, weak supply chains, and environmental effects.
Grain Oriented Electrical Steel/GOES MMI
The Grain Oriented Electrical Steel MMI took another sharp dive in price action, dropping 28.89% to $3,399 per metric ton.
Tornadoes Knockout Transformers, Exasperating Ongoing Transformer Shortages
The electrical system in the U.S. suffered severe damage from the recent wave of tornadoes that swept across the country, which took out many transformer systems. This occurs at a time when the nation already faces a dire transformer shortage, making it extremely difficult to replace the damaged equipment.
As the main component of the electrical grid, transformers convert high-voltage electricity from power plants into lower voltages appropriate for use in homes and businesses. Nevertheless, a large number of these transformers are already nearing the end of their intended lives.
According to some estimates, 70% of U.S. transformer units are at least 25 years old, while 15% are older than 40 years. Meanwhile, the transformer scarcity has become worse as a result of catastrophic weather occurrences like tornadoes depleting transformer stockpiles, leaving utilities frantically searching for replacements.
Overcoming the Transformer Dilemma
To overcome this conundrum, experts advise developing a thorough resilience plan that emphasizes strengthening the electric power sector as a whole and bettering life-cycle management. This might entail using cutting-edge techniques to manage the capacity for emergency replacement, such as the Spare Transformer Equipment Program (STEP), which aims to create a strategic reserve of transformers that utilities can use in an emergency.
Furthermore, in order to reduce energy waste and carbon emissions by 340 million metric tons over the next 30 years, the Department of Energy recently suggested increasing the use of amorphous steel, a more efficient material for transformer cores. Estimates say this could save consumers an estimated $15 billion on their energy bills.
Nonetheless, a few legislators and industry experts worry that moving to a new kind of transformer would make the current supply chain issues worse and impede the grid’s growth and upkeep.
Renewables MMI: Noteworthy Price Shifts
See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your metal buys.
- Silicon prices dropped by 3.24% to $1,836.07 per metric ton
- Cobalt prices dropped by 5.2% to $26.89 per kilogram
- Neodymium prices rose by 7.67% to $64639.74 per metric ton
- Finally, steel plate prices moved sideways, rising by a slight 1.47%. This brought prices to $1,310 per short ton
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“Yet another example of how incoherent and poorly thought out the US economic escalation against China is.”
Notice that US manufacturing productivity has actually been declining since 2011, or for the last 13 years:
https://fred.stlouisfed.org/graph/?g=m2mB
January 30, 2018
Manufacturing Productivity, * 1988-2024
* Output per hour of all persons
(Indexed to 1988)
https://fred.stlouisfed.org/graph/?g=Of7F
January 30, 2018
Manufacturing Productivity, * 2000-2024
* Output per hour of all persons
(Indexed to 2000)
“The United States relies heavily on China for its solar panel supply. However, this dependence on Chinese manufacturing raises several concerns. One issue of note is the alleged use of forced labor in China’s Xinjiang area, which generates a significant portion of the world’s polysilicon, the primary component used in solar panels.
“Due to evidence of forced labor abuses against Uyghur and other Muslim minorities, the U.S. government has placed restrictions on the importing of items made in Xinjiang.”
[ Xinjiang is open. Communities and companies have been repeatedly visited by Muslim country representatives and no forced labor has been found. ]
No one even bothers to try and hide the forced labour in the US prison system. Yet another item in the long list of things that are only wrong when our so-called enemies do it.
Besides the USA prison slave labour there is this:
“One issue of note is the alleged use of forced labor in China’s Xinjiang area…”
— Metal Miner
When I read that it was time again to leave NC.
“…the US government is the single worst human rights abuser on planet Earth.”
— Caitlin Johnstone
You beat me to it. Did not VP Harris before she was VP argue against early prison release or so such, as California need its prison firefighters in the wildfire season?
Those charges are bogus and originate from activists that are against the Chinese government. The US government goes along with it so that it can sanction any economic activity in the Xinjiang region with the hope that as the Uyghurs are impoverished by these measures, that they will take it out on the Chinese government thus causing instability in this region.
It’s appalling that the US government is so concerned about China’s treatment of Muslims but 100% on board with Israel’s overt genocide of Palestinians. If it wasn’t obvious that the US government isn’t serous about human rights before 2023 it is now.
At this point these repeated accusations without any proof have just gotten tiring. When there is no viable strategy anymore the imperialists just resort to vapid insults, which says more about them and their arrogance than about the countries they wish to break apart.
I recall that one company (sportswear of some type?) was called out for Uyghur slave labor; the factory operated in a mixed area and had Chinese employees as well. The solution was to fire all the [paid!] Uyghur employees. No more complaints.
Of course, I try to keep an open mind, and understand that everything I think I know was concocted by the Russians, the Chinese, or the vestry at the Episcopal church I attended as a child, and that Daniel Dumbrill, Robby Barwick and the like are just paid actors, and Jaq James is actually a malevolent AI, and… and… But Adrian Zenz co-wrote a wonderful guide to exactly what will happen when Jesus returns, before he got involved with revealing the truth about the poor Uyghurs. So, we can certainly see his remarkable qualifications as a researcher and anthropologist, can’t we now?
Having followed Max Blumenthal’s Grayzone investigating Uyger allegations for some time, I rushed to the comments hoping for the dismissal of the manipulative claims intended to foment trouble for China. I’m glad I didn’t stop with Rev Kev’s terse summary of the matter, because I’d have missed the many corrections including Walter’s cool “paid actors” satire just now!
Very belated thank you (busy with incredible daughters, and nearly credible house-cleaning:-)). The Grayzone is pretty great. Raising questions about October 7th, too. And visits to Venezuela. And…
A problem I have is the lingering desire to believe the mainstream narrative, because “everybody” (whoever they are) says it must be true. How can Max Blumenthal get it right instead of all these very smart, very official, very authorized people? I struggle with doubt, and with friends who are completely convinced of the horrors of China, and will tell me all of them. Dissonance.
Neoliberalism loath keeping spares. I sometimes wonder if that behavior stems from gaming accounting rules, but i do not know enough of the potential nuances involved.
For more info on silicon for PV panels see this video, which covers US solar panel policy from the Obama administration to today:
“President Obama also tried tariffs to save our solar industry. China retaliated and took it all.” Inside China Business
The presenter cites his sources.
Yep. Per Wikipedia «Only twelve factories were known to produce solar-grade polysilicon in 2008; however, by 2013 the number increased to over 100 manufacturers.»
So if there is a “dire” shortage of transformers, why isn’t “the market” recognizing that opportunity and allocating capital to transformer manufacturing? Hmmmm.
beacause transformers are a cost center and electric utilities have moved to a rentier model.
the old-fashioned model used to be that your electric co. owned the powerplant and the wires/transformers that delivered the juice.
Now, in many (most???) areas, one company owns the wires-infrastructure and charges you the “meter fee” (as a rentier), another arm of the same company, or a different company, charges you for the actual electricity
and given the meter fee is generally state-regulated, long-term capital investments are only done when accompanied by a rate hike (atleast in my area)
the logic of vulture capitalism – sell the seed corn for short term profit and buy stock in AI.
“The electrical system in the U.S. suffered severe damage from the recent wave of tornadoes that swept across the country, which took out many transformer systems. This occurs at a time when the nation already faces a dire transformer shortage, making it extremely difficult to replace the damaged equipment…”
https://www.powertransformernews.com/2023/03/28/extent-of-chinese-made-components-in-u-s-electrical-grid-still-unknown/
March 23, 2023
Extent of Chinese-made components in U.S. electrical grid still unknown
An increasing number of utility companies are avoiding the purchase of large power transformers from China due to heightened awareness of security risks, according to a U.S. Department of Energy official who spoke at a Senate panel…
As the World turns clockwise, the air riches the US from the Pacific, from Russia or China. Isn’t that a security risk? Perhaps Americans should stop breathing that air.
I would not suspect that you wrote “rich” because, like myself, have a tendency to misspell the way you occasionally mispronounce. So when the air riches the USA, USA becomes richer. But as we get richer from the air that moves from Chukotka, Kamchatka, Primorye etc. to Alaska, BC, Oregon etc., Russia in turn is enriched by the air moving from American North East and MidAtlantic, the latter even picks up some goodies over France etc.
Onward to security risk. The airborne riches include balloons, and here in USA have a dilemma: capture them as trophies, and if possible, get some profit, e.g. sell pillow cases made from the shells of Chinese balloons, and if the relations are tense, sell entrance door mats made from that material. Or destroy them by shooting nails with a nail gun or some less specific weaponry. I would guess that the former method would be more relaxing in terms of nationwide index of irritation, but the latter is better for political grandstanding.
According to some estimates, 70% of U.S. transformer units are at least 25 years old, while 15% are older than 40 years.
I remember when these statistic were the same about 25 years ago – or at least the project I worked on had a replacement need that took months to fulfill because of the above state of affairs – and limited production of these things.
This article from last year outlines some of the reasons utility transformers are still in sporadic supply and why we have not moved to more efficient amorphous metal transformers. Big surprise, change for efficiency will cost some people money and lobbyist are involved to stop this from happening.
https://www.eenews.net/articles/meet-the-metal-that-could-transform-the-grid/
According to this interview with the CEO of a transformer manufacturer, new investments, new technical hires, and more labor will be required for amorphous steel transformer production. He does not sound totally averse to doing it, but the industry appears to be overwhelmed by a wave of demand, input cost increases, and labor supply problems. Interestingly, he notes that most US manufacturers are in rural areas, where worker supply is short. It sounds as if the transformer market is relatively competitive. You have to allow for him talking his book, but his perspective is anything but that of rugged free-market individualism —
“The importance of planning and coordinating activities.”
With good genes, ample time spent outdoors, avoiding opioids and tobacco, shouldn’t transformers live into late 80ties?
I do wish the US was efficient at something other than threats and sanctions.
Data Centers! We lag only China, but we create and plan data centers like there is no tomorrow. Er….
US threats and sanctions turned out to be very efficient in making Russia great again. China too.
Fast foods.
Data Centers! We lag only China, but we create and plan data centers like there is no tomorrow. Er….
You can’t spy on everyone without those.
Yes China is the producer of roughly eighty percent of the world’s solar panel parts.
The whole world basically gets its parts from there.
The old tired China bad because they make solar with coal is bunk. They are getting more and more from renewables and I’ve never seen a breakdown of energy mix so who can say?
Even if it’s made with coal, most of the other solar come SE Asia where coal is common. It takes a bit longer to return on the CO2 input but it still works.
The whole forced labor thing is also suspect as pointed out in comments. But it has its own special tariffs here in the US.
Personally I don’t consider solar panels to be a national security threat.
Meanwhile most if not all the new solar panel assembly plants are on hold or delayed here in the US. And are owned by foreign companies, primarily Chinese or Korean, or SE Asia. Because even with all the govt handouts it’s not cost effective.
Transformers on the other hand are absolutely crucial to keeping the lights on. The newer designs with the amorphous metal sounds good. I can’t figure out from the articles is the 15 billion in savings yearly or over 30’yrs?
And while that sounds like a lot it might be a rounding error for what the nation spends annually?
Coupled with no one makes that metal in the US, forcing suppliers to use it, that seems like a national security issue.
This government just doesn’t seem to have a working strategy. I mean shouldnt you work on the supply chain before mandating new regulations?
One possible breakdown source https://ourworldindata.org/grapher/share-energy-source-sub?country=~CHN. I don’t know how trustworthy.
Coal is still king but that line has an impressively negative slope.
Coal production in China will be capped in 2025, however what is not clear to me now is how much coal consumption is clean. A significant amount of coal use in China is not for energy. Coal for instance makes an important synthetic fiber, spandex:
https://english.news.cn/20240430/6fcc5018623a440a827b79a1629a2b82/c.html
April 30, 2024
Sci-tech innovation empowers modern coal industry in NW China’s Ningxi
https://english.news.cn/20240430/6fcc5018623a440a827b79a1629a2b82/c.html
April 30, 2024
Sci-tech innovation empowers modern coal industry in NW China’s Ningxia
YINCHUAN — At the sample exhibition hall of the Ningdong Industrial Park of Tayho Advanced Materials Co., Ltd. in Yinchuan, capital of northwest China’s Ningxia Hui Autonomous Region, visitors are captivated by a range of spandex-crafted products, including sportswear, underwear, and baby diapers.
“Such remarkable elasticity,” said visitors as they tugged on a spandex product.
Spandex, a synthetic fiber known for its exceptional elasticity, boasts properties like high elongation, resilience, and fatigue resistance. Widely utilized in textile garments, medical applications, and automotive interiors, among other fields, spandex stands as a top-tier textile material with comprehensive performance.
But it is all the more astonishing to learn that this white, stretchable textile material originates from the depths of black coal.
“Through a series of coal chemical processes and chemical reactions, coal metamorphoses into spandex,” said Zhang Guojun, manager of the production department of Ningxia Ningdong Advanced Materials Co., Ltd….
Several items related to this article:
1) China is the largest solar electricity producer in the world and can use all the solar panels that the US plans to block. In the deserts north of Xinjiang, China is building 455 GW of solar and wind plants. This is enough to serve all of India’s electric usage and will begin to replace coal electricity. This video worth watching.
https://undecidedmf.com/chinas-massive-desert-project-is-about-to-change-the-world/
2) China’s new coal production is not just to expand coal plants but to replace existing ones with more flexible and efficient coal until renewables take over.
“Building the capacity is not the same as running a plant. According to Chinese electricity dispatch laws, power from renewable sources such as wind and solar, when available, must be dispatched to consumers first. Coal-fired power is almost always last in line.”
“This expected future role for coal, as a backup power source, is apparent in the technical requirements Chinese power planners demanded of the batch of coal-fired power plants approved over the last year. Each has to be able to reduce its power output to as low as 30% load during periods of low demand, but still be able to cycle back up to full load during high-demand hours — operating requirements virtually unheard of in coal-fired power plants elsewhere in the world, which simply don’t have the ability to cycle up and down so quickly and efficiently.”
https://thechinaproject.com/2023/09/21/china-is-going-to-use-less-coal-despite-reports-to-the-contrary/
3) Biden’s 100% EV car tariff is a repeat of the Japanese car “invasion of the 70’s”.
“Remember, in 1970, American cars were huge, gas was cheap and then the crunch came. Now American cars are huge, only 20% of Americans can afford them and reality check has arrived.
Can American car companies adapt and sell the equivalent of Japanese econoboxes from the early 1980s? Not a chance, just as they couldn’t do it then. Could America say to Chinese automobile firms, sure, sell cheap cars that the average person can afford in North America, just do it with Chinese cars built in Chinese-owned factories on American soil, mostly employing Americans? Of course.”
https://cleantechnica.com/2024/05/25/bidens-100-china-ev-tariff-fails-history-101/
1) China is the largest solar electricity producer in the world and can use all the solar panels that the US plans to block. In the deserts north of Xinjiang, China is building 455 GW of solar and wind plants. This is enough to serve all of India’s electric usage and will begin to replace coal electricity. This video worth watching.
https://undecidedmf.com/chinas-massive-desert-project-is-about-to-change-the-world/
2) China’s new coal production is not just to expand coal plants but to replace existing ones with more flexible and efficient coal until renewables take over.
“Building the capacity is not the same as running a plant. According to Chinese electricity dispatch laws, power from renewable sources such as wind and solar, when available, must be dispatched to consumers first. Coal-fired power is almost always last in line.”
“This expected future role for coal, as a backup power source, is apparent in the technical requirements Chinese power planners demanded of the batch of coal-fired power plants approved over the last year. Each has to be able to reduce its power output to as low as 30% load during periods of low demand, but still be able to cycle back up to full load during high-demand hours — operating requirements virtually unheard of in coal-fired power plants elsewhere in the world, which simply don’t have the ability to cycle up and down so quickly and efficiently.”
https://thechinaproject.com/2023/09/21/china-is-going-to-use-less-coal-despite-reports-to-the-contrary/
3) Biden’s 100% EV car tariff is a repeat of the Japanese car “invasion of the 70’s”.
“Remember, in 1970, American cars were huge, gas was cheap and then the crunch came. Now American cars are huge, only 20% of Americans can afford them and reality check has arrived.
Can American car companies adapt and sell the equivalent of Japanese econoboxes from the early 1980s? Not a chance, just as they couldn’t do it then. Could America say to Chinese automobile firms, sure, sell cheap cars that the average person can afford in North America, just do it with Chinese cars built in Chinese-owned factories on American soil, mostly employing Americans? Of course.”
https://cleantechnica.com/2024/05/25/bidens-100-china-ev-tariff-fails-history-101/
“China is the largest solar electricity producer in the world and can use all the solar panels that the US plans to block…”
Really excellent explanation and analysis.
“initiatives underway to support domestic solar panel manufacturing”
Funny, I thought there were initiatives underway. For decades. And yet US (and EU) solar power manufacturing only decreases in global significance. Absent either focused, long-term industrial policy, likely by state operated enterprises, this boat sailed (other than subsidies increasing profits for highly selective companies).
A superficial article. Probably could have been written by an AI (not saying it was, just that it could have been).
so I tried “how is US solar manufacturing advancing compared to Chinese” to ChatGPT.
writing style was better, informational content about the same.
from ChatGPT:
“China has been leading the global solar manufacturing industry for some time, producing a significant majority of the world’s solar panels. However, the United States has been making strides to advance its solar manufacturing capabilities.
One significant development is the increasing focus on domestic production and supply chain resilience in the United States. This shift has been accelerated by factors such as geopolitical tensions, concerns over supply chain vulnerabilities, and the desire to create more domestic jobs.
To bolster domestic manufacturing, the U.S. government has implemented various initiatives and incentives to support the solar industry, including tax credits, grants, and loan programs. Additionally, there have been efforts to invest in research and development to enhance the efficiency and competitiveness of American solar manufacturing technologies.”
Which of course repeats the common meme, but is not data based.
So currently the US is 1.9%
https://www.statista.com/statistics/668749/regional-distribution-of-solar-pv-module-manufacturing/
which is less than in the 2010s
https://tinyurl.com/yc2tzzes
Hence the problem of research with AI.
Interestingly, vietnam is 6.4%. Could that be repackaging of Chinese solar for the US market?
What’s the story about heavy metals and PFAS cleanup if the panels are smashed to the ground in a hail storm?
The vast majority of installed photovoltaic solar panels are of the crystal silicon variety (as opposed to thin-film amorphous), and contain mainly glass, the PV cells themselves, an EVA (ethyl-vinyl-acetate) encapsulant, and the aluminum frame holding it all together.
There may be a tiny amount of lead in the solder used to interconnect the cells which make up a panel, but that lead is alloyed with tin. I would imagine that PV panels intended for worldwide use are now using lead-free solder.
To my knowledge, no PFAS is used in PV panels at all, i.e. zero, zilch, nada.