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https://www.energy-storage.news/news/uk-government-seeks-to-slam-shut-battery-storage-capacity-market-loophole

New proposals from the UK government intend to slam shut a loophole that had allowed for battery storage projects in the country to access more favourable payments for their flexible capacity.

A consultation launched earlier this month by the UK’s Department for Business, Energy and Industrial Strategy (BEIS) seeks to update a number of rules applicable to the country’s Capacity Market, which tenders for reserve capacity should the nation’s energy supply require it during winter periods.

Of particular interest to battery storage operators within the consultation is a clause which seeks to close a loophole in the rules which allowed battery storage projects to pre-qualify and bid for capacity contracts under the demand-side response (DSR) asset class which, courtesy of controversial de-rating factors applied to batteries in 2017, receive more favourable rates for the capacity they can provide.

BEIS and the UK’s energy regulator Ofgem introduced de-rating factors to the Capacity Market auction process in 2017, penalising storage technologies based on their nameplate duration. Capacity Market rules stipulate that applicants must be capable of responding to system stress events for four hours, and battery storage project capacities are de-rated based upon their duration.

Demand-side response applicants are not, however, de-rated in the same way, despite battery storage projects being capable of responding to stress events in much the same fashion – increasing or decreasing demand on the system by either charging or discharging.

A handful of battery storage projects successfully pre-qualified and landed capacity agreements within auctions held earlier this month, much to the ire of BEIS which considers such awards a threat to security of supply.

BEIS now intends to address the “unintended consequences” by preventing standalone storage units – defined as an energy storage unit which “primarily imports from (whilst charging) and exports to (whilst generating) the distribution network, rather than primarily providing supply to an on-site customer – from defining themselves as DSR.

This loophole would need to be closed, BEIS stresses, before such units can access multi-year agreements in forthcoming auctions, a matter which would cause the issue to become “more widespread”.

Ofgem had previously been consulted on with regards such a rule change, and national utility ScottishPower sought the creation of a separate ‘Storage DSR’ asset class to capture applications of that nature.

Ofgem was due to consult on the issue itself last year, but failed to do so.

When contacted by sister publication Current±, an Ofgem spokesperson said “more thought needs to be given on how DSR CMUs would incorporate limited duration technologies into their portfolio”, and on how this is then taken into account relating to limited duration a

Most of the new tungsten mining projects coming up are yet to secure funding, but some are fully financed — two in Spain, and two in Russia, which hosts the largest tungsten mineral resources outside China. The first two are producer W Resources' 1,400 t/yr La Parilla mine, which started operating in late 2019 and shipped its first concentrate in early 2020, and the 2,060 t/yr Barrecuopardo mine, which also started running and shipping concentrate in late 2019, and is majority owned by investor Oaktree, to whom Ormonde Mining recently agreed to sell its 30pc stake.

In Russia, Wolfram is developing the 560 t/yr tungsten-tin Zabytoe deposit in the far east, also with mining having started in 2019 with first shipments in early 2020. Russian state strategic resources corporation Rostec is developing the other tungsten deposit, Tyrnyauz, in North Caucasus, as a 3,570 t/yr mine with a view to a 2023 start, and with an offtake agreement already signed with Wolfram for its tungsten and molybdenum ore.

Elsewhere, the 600 t/yr RHA mine in Zimbabwe has been expected to restart in mid 2020, Mironenko said. China's decision last year to ban imports of 32 kinds of scrap has released more tungsten scrap and residues for recycling outside China, which has eased the pressure on some of the primary raw material supply, he added. Chinese tungsten processors have also since invested in recycling projects outside the country, including in Malaysia.

While industrial scale mechanised mining dominates primary tungsten raw material supply, a minor portion of it comes from artisanal mines including in Bolivia in South America, Myanmar in southeast Asia and the Democratic Republic of Congo, Rwanda and Burundi in central Africa.

But the quality of artisanal concentrate varies and comes with impurities. Concentrate from the new industrial mines in developed countries also comes with higher impurities than competing Chinese raw materials, Gorbachev told delegates.

"As a consumer you can choose concentrate on price, quality or availability — and very rarely all three go together, usually you only get two. So if sourcing outside China, you have to compromise," Gorbachev said.

In terms of demand, the tungsten market is evolving but at a slower rate than predicted, he said. Transport accounts for 31pc of tungsten consumption, with other major uses including mining and construction (23pc), industrial applications (13pc) and defence (6pc).

The use is set to change within the transport segment as the move from internal combustion engine vehicles to electric vehicles (EVs) is set to lead to loss of market in transmission and engines and lower share of metalwork in body parts and therefore less tungsten use in tooling. Tungsten is set to find a new market in copper-tungsten connectors and potentially in niobium-tungsten oxide for lithium-ion batteries, an area currently in research.

https://www.argusmedia.com/en/news/2073602-exchina-tungsten-supply-faces-challenges?backToResults=true

The global tungsten industry has had mixed success in developing a supply chain outside China's dominant resource base, but new raw material sources are starting to change the picture, delegates heard at this week's Argus Metals Week conference in London.

China holds 65pc of known global tungsten resources and accounts for around 80pc of the raw material supply, meaning resources in other countries are underutilised. In 2018, China produced 64,900t of tungsten contained in concentrate out of total global production of 80,100t. Vietnam, the next largest producer, contributed a much smaller share with 4,800t.

When supply comes under pressure — as during the US-China trade war and the present logistical disruptions caused by the coronavirus outbreak — the rest of the world ramps up efforts to develop alternative supply, director of international business at Russia's main tungsten producer Wolfram, Denis Gorbachev, told the conference. But most of the projects that have failed have been in developed countries considered "low-risk" in terms of political stability, technology or infrastructure. The main risk for them has turned out to be high operating costs.

Shockwaves were sent through the industry in 2018 as the Cantung mine in Canada and Wolfram Camp in Australia were mothballed, UK and Russia-based firm AVAS Trading general manager Fedor Mironenko said. This was followed by the failure of the Hemerdon mine in the UK. But a number of new projects in Australia could see the region take a larger share of market supply before the end of this decade, he suggested, although they are yet to secure financing.

Projects outside China face a number of hurdles, including remoteness of access and complex logistics, availability of supply of power, water, chemicals and labour, and political, ecological and technological risks.

The Nui Phao project in Vietnam is a success story. It has benefited from low costs, but the 20pc export duty on concentrates has meant it could not be purely a raw material supplier and development of downstream processing in Vietnam has also resulted in the country becoming an importer of tungsten concentrate. Another major development coming up, also in Asia, is the 3,600 t/yr Sangdong project in South Korea, expected to start production next year, for which its owner Almonty Industries recently secured $76mn financing and signed a long-term offtake agreement with Global Tungsten and Powders Corp.

https://onestepoffthegrid.com.au/remote-w-a-pub-to-sell-beer-and-solar-in-community-push-away-from-diesel/

A rooftop solar array installed across two turn-of-the-century buildings in Meekatharra in Western Australia’s Gascoyne-Murchison region is hoped to form the beginnings of a community energy trading platform for the remote goldfields town.

The project, described as “the result of several years’ hard work and learning curves,” installed PV systems on the roof of the town’s Royal Mail Hotel and the Made in Meeka art and souvenir shop.

The installation was spearheaded by the hotel’s owner, Gitte Heij – who is also a lawyer, and shop owner Anna Johnson, and installed by Rob Hanson of Midwest Solar Power.

“It’s literally power to the people, by the people,” said Dr. Heij. “The first cheque will be framed and displayed at the pub, as a symbol of what we hope to be sharing in the near future with our neighbours when we achieve a community trading platform – our own power company, owned and run by local people for local people.”

On that side of the equation, the organisers say the project has including detailed negotiations with Horizon Power, technical advisors, energy lawyers, and local government.
Happily, Horizon is somewhat of a trail blazer on thinking outside the square on energy supply, having rolled out microgrids to replace poles and wires at far-flung and bush fire-prone parts of the grid.

The state-owned utility has also embraced renewable energy microgrids as an economic strategy, to chip away at monstrous fossil fuel subsidies that guarantee regional customers pay no more than the 26c/kWh charged in Perth.

In Meekatharra, where diesel-fueled generators still produce most of the towns power supply, Horizon last year installed around 450kW of solar capacity alongside the 1.8MW diesel plant, reducing the town’s reliance on diesel by around 20 per cent.

The addition of the rooftop solar, says Johnson, will further reduce Meekatharra’s consumption of the costly and polluting fuel.

“We’re taking ourselves into the future instead of waiting for it to come to us,” Johnson said.

The plan going forward is to add battery storage to the rooftop array, to maximise solar sharing and consumption within the community.

As it happens, Meekatharra is home to the world’s largest undeveloped vanadium resource, so the consortium has been liaising with VSUN Energy, a subsidiary of one of the companies developing the massive rare earths find, Australian Vanadium Limited.

“Having early dialogue with AVL and VSUN means we’re already looking ahead to the add-on potential of vanadium redox flow batteries and other energy innovations,” said Dr. Heij.

Heji said this would provide scalability, as well as “smooth, safe and uninterrupted power flow,” which she described as a ground-breaking add-on for all levels of renewable energy systems.

https://www.forbes.com/sites/mergermarket/2020/02/18/the-future-of-battery-energy-storage-is-upon-us/#3948ea774a18

Are you ready for the Energy Storage Grand Challenge?

It was announced in January by U.S. Secretary of Energy Dan Brouillette and is a comprehensive program to accelerate the development of next-generation energy storage technologies that would position the U.S. as a global leader.

The goal of the program is to “create and sustain global leadership in energy storage utilization and exports, with a secure domestic manufacturing supply chain that is independent of foreign sources of critical materials, by 2030,” according to the department.

Battery storage up until 2020 was considered the future of energy. But in the last months of 2019 alone, eight major US battery storage projects advanced or signed contracts to sell energy from their facilities to major utilities signalling that the future of battery storage might be closer than originally expected.

According to the U.S. Energy Information Agency, utility-scale battery energy storage capacity in the U.S. could more than double by 2022.

Lior Handelsman, founder of SolarEdge Technologies, a Israel-based energy storage and solar company, recently told Inframation that interest in commercial storage has increased tenfold in just a year.

"This growth is being driven by increasing electricity prices and grid instability,” he said. “Commercial business owners who are looking to improve their bottom lines are doing so by generating and storing their own energy.”

Strong advancements in the battery storage sector have attracted the interest of private equity infrastructure funds.

Energy Capital Partners, a New Jersey-based private equity infrastructure investment firm, reached financial close on its Fund IV at $3.3 billion with two main investments in the energy storage sector in Convergent Energy and Gopher Resource. Similarly, New York-based investor and asset management firm JLC Infrastructure acquired and rebranded Greenskies Renewable Energy, reflecting the target’s added focus on battery storage and emerging technologies.

Utilities are also expected to make their mark as the year progresses and the market matures, As the year progresses and the market matures utilities are also expected to make their mark as they increase their involvement in the development and funding phases of the projects.

“Utility players that are linked to energy retailers, such as ENGIE, understand how the energy industry works and have a customer channel," Handelsman said. "These companies will have a good way to offer alternative solutions which is why we see such companies as large players in the field.”

Fortune 500 energy companies such as AES and NextEra are moving forward as well. NextEra Energy, which is the world’s largest utility company, indicated during a recent investor presentation that it expected to add 450 megawatts of energy storage in the near term.

https://news.northeastern.edu/2020/02/18/this-nanomaterial-could-be-our-best-tool-to-make-renewable-energy-cheaper/

THIS COULD BE OUR BEST TOOL TO MAKE RENEWABLE ENERGY CHEAPER

The most advanced batteries to do that are called flow batteries, and are made with vanadium ions dissolved in acid in two separate tanks—one with a substance of negatively charged ions, and one with positive ones. The two solutions are continuously pumped from the tank into a cell, which functions like an engine for the battery.
These substances are always separated by a special membrane that ensures that they exchange positive hydrogen ions without flowing into each other. That selective exchange of ions is the basis for the ability of the battery to charge and discharge energy.
Flow batteries are ideal devices in which to store solar and wind energy because they can be tweaked to increase the amount of energy stored without compromising the amount of energy that can be generated. The bigger the tanks, the more energy the battery can store from non-polluting and practically inexhaustible resources.
But manufacturing them requires several moving pieces of hardware. As the membrane separating the two flowing substances decays, it can cause the vanadium ions from the solution to mix. That crossover reduces the stability of a battery, along with its capacity to store energy.
Zhu says the limited efficiency of that membrane, combined with its high cost, are the main factors keeping flow batteries from being widely used in large-scale grids.
In a recent paper, Zhu reported that a new membrane made with cellulose nanocrystals demonstrates superior efficiency compared to other membranes used commonly in the market. The team tested different membranes made from cellulose nanocrystals to make flow batteries cheaper.
“The cost of our membrane per square meter is 147.68 US dollars, ” Zhu says, adding that her calculations do not include costs associated with marketing. “The price quote for the commercialized Nafion membrane is $1,321 per square meter.”
Their tests also showed that the membranes, made with support from the Rogers Corporation and its Innovation Center at Northeastern’s Kostas Research Institute, can offer substantially longer battery lifetimes than other membranes.
In flow batteries, that molecular makeup speeds the transport of protons as they flow through the membrane.
The membrane also consists of another polymer known as poly(vinylidene fluoride-hexafluoropropylene), which prevents the negatively and positively charged acids from mixing with each other.
“For these materials, one of the challenges is that it is difficult to find a polymer that is proton conductive and that is also a material that is very stable in the flowing acid,” Zhu says.
Because these materials are practically everywhere, membranes made with it can be easily put together at large scales needed for complex power grids.

While it can be convincingly argued that mainstream reporting of these challenges and the (rare) fires that they cause might sensationalise the overall impact compared on adoption of the technologies, it remains true that in the case of APS’ battery fire in Arizona last year, a number of firefighters were badly injured. Meanwhile from a business perspective, the image perception of lithium-ion no doubt has taken a hit from incidents like the 23 fires reported at commercial energy storage projects in South Korea last year.

Prevention is always better than detection and the mitigation of an event
Honeywell’s ASD technology basically works like a vacuum, sucking up air towards the ceiling of a facility, which the company claims can detect fires faster than conventional smoke alarms, up to 30 minutes - or 30 times faster - Peter Lau said, than those regular smoke alarms that do not go off until smoke or heat reaches them. As well as safety, this can have serious ramifications for the run-time of facilities, as well as badly affecting so-called mission critical facilities such as datacentres.

“Prevention is always better than detection and the mitigation of an event. Once you get past the prevention stage you’re talking about serious ramifications for any business in terms of uptime for their facilities”.

An ASD can “predict” where a fire is likely to occur, Honeywell’s Peter Lau said.

“Once the smoke reaches a conventional detector, depending on the size of the ceiling in the building, it could be well after a fire is going. If you think about a warehouse which is 30ft or 10 metres high, once the smoke would reach a regular smoke detector, you’re probably past the stage of prevention. Even before the smoke is the off-gas signals. That’s where our partnership with Nexceris would kick in with the integration of our early detection systems.”

The Honeywell division president said that with the furthering of standardisation and certification services and programmes, such as UL’s standards for installation of energy storage systems or PVEL’s Product Qualification Programme, he would like to see the Xtralis product integrated into those to ensure that early warning and detection systems exist.

“We understand there’s a huge potential for lithium-ion batteries. We are in the business of fire safety and really this can only help further the widespread adoption of energy storage.”

Honeywell Building Solutions' parent company - active in 150 countries - also appears to have recognised this potential, developing large-scale energy storage projects in North America already, attending and exhibiting at big industry shows including Solar Power International / Energy Storage International last year and announcing a 300MW pipeline of projects with Canadian developer NRStor.

https://www.energy-storage.news/news/honeywells-xtralis-lithium-fire-safety-tech-prevention-is-much-better-than

The fire unit at global multinational engineering firm Honeywell made its first move into lithium-ion safety in recognition of battery storage’s “huge potential” for decarbonisation and to help the world move “in a more energy efficient way”, the company has said.

Energy-Storage.news reported last week that Honeywell has partnered its Xtralis fire detection technology with Nexceris’ Li-Ion Tamer gas detection devices, with Xtralis the main distributor of the integrated brand’s solutions.

“I see this partnership as a way for us to really help our world stay safer but also further the carbon emissions reduction and grow the world in a more energy efficient way,” Peter Lau, president of Commercial Fire at Honeywell Building Technologies, told Energy-Storage.news in an interview following the announcement.

“This alliance is the perfect intersection between both of those.”

Lau said that as Honeywell Building Technologies is involved in safety and security as well as building management systems and electrical products, as well as Honeywell Building Solutions, which integrates its work in these areas, it is always “scanning the horizon for new and different detection technologies.”

The company found that Li-Ion Tamer was leading in the “relatively immature” market of lithium-ion battery energy storage safety and formed the strategic alliance between Honeywell’s aspirating smoke detection (ASD) systems and Nexceris’ gas detection brand.

'A very, very, early warning system to prevent potential major catastrophes'
Peter Lau claimed that the combined solution “helps us to continue to further the agenda of making sure that we’re a more carbon-free world, a more energy conscious world and it enables that by doing it in a safer and more productive way”. The main challenges Honeywell found, in detecting problems that can cause battery fires, are the three basic things can cause them: thermal (over-heating), electrical (overuse or misuse of the battery) and mechanical.

“Generally what happens is, if there’s going to be a safety issue with the battery... you start to get to off-gas release, usually 20-30 minutes before a fire starts. So the way that goes is that you get off-gases then eventually, you get smoke and then pretty quickly after that it leads to fire. We’re able to detect those first two stages of a fire before a fire occurs, so we think that a really strong and compelling offering for us, moving forwards.”

“If you complement the Li-Ion Tamer technology with our advanced sensing technologies and our ability to protect and manage fire events, it ends up being a very, very, early warning system to prevent potential major catastrophes,” Lau said.

https://www.businessinsider.com/jeff-bezos-giving-10-billion-to-fight-climate-change-2020-2?r=US&IR=T

Jeff Bezos said on Monday that he's giving $10 billion to fight climate change.

The Amazon CEO and richest man in the world announced in a post on Instagram that he'd start the Bezos Earth Fund. He said he expects to start giving out grants this summer.

With an estimated net worth of nearly $130 billion, his pledge accounts for about 7.7% of his wealth.

"Climate change is the biggest threat to our planet," Bezos said. "I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change on this planet we all share."

The move follows pressure from Amazon employees to push the company to do more to fight climate change. More than 350 employees signed a Medium blog in January calling for net-zero emissions by 2030, among other requests.

In September, Bezos announced Amazon's climate pledge to get the company carbon-neutral by 2040, 100% renewable energy by 2o30, and 100,000 electric delivery vehicles by 2030.

Bezos is the only American among the world's five richest people who has not signed the Giving Pledge, in which participants promise to give away more than half of their wealth during their lifetimes or in their wills, Business Insider's Paige Leskin wrote. His ex-wife, MacKenzie Bezos, signed the pledge in May.

His full Instagram post read:

Today, I'm thrilled to announce I am launching the Bezos Earth Fund.???
???
Climate change is the biggest threat to our planet. I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change on this planet we all share. This global initiative will fund scientists, activists, NGOs — any effort that offers a real possibility to help preserve and protect the natural world. We can save Earth. It's going to take collective action from big companies, small companies, nation states, global organizations, and individuals. ???
???
I'm committing $10 billion to start and will begin issuing grants this summer. Earth is the one thing we all have in common — let's protect it, together.???
???
—Jeff

https://www.morningstar.co.uk/uk/news/AN_1581933927681129900/ormonde-minings-board-shuffles-following-barruecopardo-sale.aspx

Alliance News) - Ormonde Mining PLC has switched up its board, it said on Monday, following the sale of its stake in Spain's Barruecopardo project.

Ormonde announced the EUR6 million cash sale of its 30% holding in the project in January, citing lower-than-expected revenue and high costs.

Barruecopardo is a tungsten project in western Spain. The construction and commissioning of the mine was finished in 2019 and the project is currently in early stage production.

At the end of January, Ormonde confirmed Chair Michael Donoghue would be leaving amid the sale, as would Non-Executive Director John Carroll. Non-Executive Director Jonathan Henry has replaced Donoghue as executive chair.

Last week, Ormonde proposed the appointments of Tim Livesey and Richard Brown as non-executive directors. Livesey is chief executive at London-listed gold explorer Oriole Resources PLC, while Brown is chief financial officer at Toronto-listed Gabriel Resource Ltd.

Ormonde confirmed Monday the sale has now been completed, meaning these board changes have become effective.

Chair Henry said: "I would like to take the opportunity to thank both Mike Donoghue and John Carroll, who are stepping down from the board, for their years of service to the Company and wish them well on their retirement, and welcome Tim Livesey and Richard Brown to the board.

"I believe that Tim and Richard's extensive experience and contacts in the resource sector will assist the company greatly in its future development."

"With the new board in place, we are now fully focused on taking the company forward into its next chapter and are already considering a number of initiatives we believe can deliver value to the company and its stakeholders," Henry continued.

Now Barruecopardo has been sold, Ormonde has a stake in the Salamanca-Zamora gold exploration project in Spain in a joint venture with Shearwater Group PLC as well as the La Zarza gold, copper, and zinc project.

Ormonde shares were 8.1% lower on Monday morning in London at a price of 0.74 pence each. They started 2020 at 2.75p.

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/financiers-warming-to-battery-storage-despite-concerns-with-standalone-projects-57103498

"Battery storage is suffering from "growing pains" as the industry matures, according to panelists at S&P Global Market Intelligence's 33rd Annual Power and Gas M&A Symposium, but the technology's attractiveness seems likely to ultimately outweigh any pitfalls.

"When your mandate is long-term revenue certainty, you're looking wherever you can find it," said Phillip Adams, business development manager for asset acquisitions at Southern Co. subsidiary Southern Power Co."

"We're starting to spend a lot more time on storage, we have financed storage in tandem with thermal assets, there's more and more talk about storage being integrated with renewable generation and we're very excited about what's to come there," said Ravina Advani, managing director and head of energy, natural resources, and renewables at BNP Paribas SA, who said her institution still has concerns about bankrolling standalone battery storage projects for renewables.

"Storage on a standalone basis, even though the cost of lithium ion and cobalt and all of those materials is coming down so drastically and making those technologies even more competitive, we still struggle with the revenue profile inherent to some of those technologies," Advani said. "We're still waiting for that to be a little more mainstream."

Describing the relationship between developers and financiers, Saxena said: "I think that storage contracts are going to go through an evolution as both parties learn what the system can deliver and how do you price this."

"I feel like for the past two or three years we keep hearing 'that market's about to explode' and I feel very confident this year and going forward that the market is actually going to grow significantly," Adams said. "We've seen costs come down drastically over the last two or three years, finally making those projects economical; [they are] finally an attractive investment for the offtakers as well as the owners."

"The general consensus among conference speakers was that battery storage has an indispensable place in the power sector's future, and that the industry is constantly evolving such that it is hard to make too many other long-term predictions.

"Whatever we think of the rules of the game, the rules are going to change in 10 years," said Mark Florian, managing director and head of global energy and power infrastructure funds at BlackRock Inc."

https://www.argusmedia.com/en/news/2070013-coronavirus-hits-tungsten-supply-demand-outlook?backToResults=true

The coronavirus outbreak has inflated spot prices for tungsten as producers in China — the world's biggest supplier — delay post-holiday restarts of their plants because of logistical bottlenecks. And the same weakening economic growth prospects are expected to hit the demand outlook for tungsten, which correlates closely with GDP.

The world's reliance on China for tungsten — it supplies 80-85pc of this critical raw material — will continue. Chinese output of tungsten concentrate containing 65pc WO3 (tungsten trioxide) rose by 26pc to 146,380t in 2019, according to the country's non-ferrous metals industry association.

Vietnam — the world's second-largest producer — and Russia might have scope to raise output, but most material is likely to be locked into long-term contracts, with limited spot tonnes available.

With average prices falling by 32pc in the second half of the previous decade, new projects have struggled to get off the ground and remain profitable, further restricting production capacity to Asia-Pacific. In 2010-14, European ammonium paratungstate (APT) prices averaged $360/mtu. But in 2015-19, this fell to $242/mtu, Argus data show.

Despite the looming supply shortfall, global economic growth will probably be checked in the near term as the coronavirus outbreak disrupts the flow of goods and services in China.

Short-term supply concerns
Doubts over the resumption of production in China and a lack of clarity regarding delivery times have prompted firms to reconsider inventory levels.

The transportation of workers, and raw and auxiliary materials — such as acid, coal, gas and alkali — to plants in China, and exports of tungsten APT and other related products, have been restricted by logistical bottlenecks. Some of China's customs and freight forwarders, including at the ports of Xiamen, Guangzhou and Shanghai, have returned to work, but goods cannot reach them for export.

As a result, some sellers in Europe could re-enter the spot market to lock in material in anticipation of rising prices triggered by supply tightness, or hedge against late-running Chinese shipments.

These worries have already resulted in higher spot prices in China and Europe in February. European prices rose after nearly two months of stability and weak spot trading.

Chinese domestic APT prices rose by 1.5pc to Yn137,000-139,000/t ($19,635-$19,922), while European APT prices rose by more than 5pc week on week to $240-245/mtu on 12 February, according to Argus data. Chinese 75pc grade ferro-tungsten prices rose by more than 2pc to Yn150,000-152,000/t, while ex-China works prices for minimum 65pc concentrate were also up by more than 2pc, hitting Yn89,000-91,000/t on 11 February.

https://www.argusmedia.com/en/news/2070517-chinese-steel-inventories-soar-to-strain-capacities?backToResults=true

Chinese mill steel inventories have soared to record levels as the coronavirus outbreak impeded deliveries and sales, forcing mills to get creative on storage and to cut output and export prices.

China's steel inventories typically peak in late winter, but mill inventories this year have exceeded previous highs back to 2016. Mills held about 10mn t of steel in the week to 13 February, 25pc higher than the previous five-year high in February 2017, according to industry data.

Rebar inventories across mills rose by more than 1mn t to exceed 6mn t this week. Previous highs in the five-year data have never exceeded 4mn t.

"The pressure is really huge with all steel product inventories continuing to rise," a north China mill official said. Long steel producers face the greatest strain. Some rebar producers have rented external storage sites or are leaving shipments at ports, wharfs and on ships, market participants said. A north China mill is storing its wire rods in fields, four coils deep, after exceeding its storage capacity.

The high inventories and stalled sales have lowered Shanghai rebar prices to near two-year lows at 3,400 yuan/t ($483/t).

There is nearly no space left to store steel on site at mills or at the port in Guanzhou, south China, market participants said. Cargoes on ships are waiting to be unloaded. More than 600,000t of steel in east China's Hangzhou city are waiting to be unloaded.

Flat steel producers are faring a little better, with most having some storage space available or have better turnover as customers restart operations.

China's warehouse steel stocks rose by 16pc to 19mn t in the latest week, in line with the trend for traders' stocks to peak at about 20mn t in late February or early March ahead of spring construction demand. China's total steel inventories rose by 17pc to exceed 30mn t from last week, according to industry data that includes rebar, wire rod, hot-rolled coil, cold-rolled coil (CRC) and plate.

Mills warned in early February that they would be forced to cut output if logistics do not improve. Output cuts accelerated this week with transport restrictions still strict.

Data for a subset of mills showed a 4.6pc decline to around 9mn t output in the week to 13 February, a China-based analyst said. Rebar and wire rod output accounted for most of the decline, in line with storage concerns. Only CRC output increased.

China's iron and steel association's 10-day production data for major mills usually lags by several weeks, with the latest showing late January output stable at 1.99mn t/d.

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