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Via Metal Miner

The Renewables MMI (Monthly Metals Index) remains volatile, especially when it comes to EV battery technology. Starting in August, the index experienced sharp up-and-down movements from month to month. Indeed, between October 1 and November 1, the index dropped 4.22%. Most index components, including grain-oriented electrical steel, dropped, with only a few managing to move sideways. Cobalt proved the only outlier in the entire index, shooting up 11.85%. That said, this price rise follows the normal seasonal demand boost for cobalt, and oversupply still plagues the cobalt markets. Due to this, many analysts expect the price increase to slow down. On the subject of battery metals, battery technology for EVs could fall under trading scrutiny in the near future. This is due to the EU investigating Chinese EV subsidies, with potential Chinese import tariffs looming.

EV Battery Technology and Possible Trade War

Due to recent developments, an electric vehicle trade war seems more possible than ever. Many analysts predict that the European Union's (EU) recently implemented investigation into Chinese electric car subsidies could result in tariffs on Chinese imports. This action was spurred on by concerns that the EU's electric vehicle sector would suffer if fair competition isn't maintained. The main worry is that China's remains the leading producer of battery technology for EVs. The situation also stems from the EU's environmental goals, which include everyone using clean cars by 2035.

The inquiry captures the anxiety around automakers' shift from producing conventional cars to electric ones. It also addresses the existential concerns regarding labor and competition accompanying this shift. The fact that China remains the world's largest producer of electric vehicles and controls a sizable amount of global battery production further contributes to the possibility of a trade war.

China Opposes EU Investigation

Chinese officials have called the European Commission's inquiry into Chinese clean car imports a "naked protectionist act." This immediately sparked fears of possible retribution and supply chain disruptions for EV components. The situation emphasizes the difficulties and even confrontations that can occur when negotiating the rapidly-changing EV and battery technology markets.

With the world's electric car market expanding, nations must figure out how to resolve trade disputes and foster fair competition. This could entail positive conversations, addressing market access and technology transfer issues, and ensuring that all parties follow international trade accords.

U.S. and Chinese Tensions Continue to Rise

The potential application of EU tariffs further intensified trade tensions between the U.S. and China. For example, Tesla boss Elon Musk recently acknowledged China's support for electric vehicles while simultaneously voicing worries about the country's hefty tariffs on foreign automakers. This helps support assertions that the intricate nature of the commercial relationship between the two nations finds itself exacerbated within these opposing dynamics.

Grain-Oriented Electrical Steel MMI

While the long-term trend for grain-oriented electrical steel (GOES) still looks bullish, the short-term trend proved volatile month-on-month. After a sharp price upswing between August 1 and October 1, the period between October 1 and November 1 proved far more bearish. Overall, the index dropped a total of 30.93%.

By Jennifer Kary

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