Morning Bites (part 2)
🇿🇦South Africa’s PGM mining output dropped 5% YoY in April, decelerating from the 9% YoY fall in March. Meanwhile, domestic gold output jumped 27% YoY, after the +22% YoY in March, most likely amid the low base effect from 2022. Given that South Africa represents ~70% of global Pt and 38% of Pd supply, respectively (as well as 3% of world gold output), the deterioration in mining, driven by the local electricity crisis, might further weigh on supply. However, weak demand from the automotive sector could offset the positive effect on PGM prices
🇸🇪 Sweden’s Ronnskar smelter has been halted after a fire destroyed a cell house, Reuters reports. Meanwhile, the company expects to resume production at the site (0.8% of global refined Cu output in 2022) in several weeks. Hence, the impact on market sentiment is likely to be rather limited, we believe
#PGMs #gold #copper
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🇿🇦South Africa’s PGM mining output dropped 5% YoY in April, decelerating from the 9% YoY fall in March. Meanwhile, domestic gold output jumped 27% YoY, after the +22% YoY in March, most likely amid the low base effect from 2022. Given that South Africa represents ~70% of global Pt and 38% of Pd supply, respectively (as well as 3% of world gold output), the deterioration in mining, driven by the local electricity crisis, might further weigh on supply. However, weak demand from the automotive sector could offset the positive effect on PGM prices
🇸🇪 Sweden’s Ronnskar smelter has been halted after a fire destroyed a cell house, Reuters reports. Meanwhile, the company expects to resume production at the site (0.8% of global refined Cu output in 2022) in several weeks. Hence, the impact on market sentiment is likely to be rather limited, we believe
#PGMs #gold #copper
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🗞Today, China has published its industrial production data for May (see table above)
#statistics #China
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#statistics #China
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Morning Bites (part 1)
🔗China’s crude steel output fell 7% YoY in May, following the 2% YoY drop in April. The decline comes in line with the government's intention to limit steel production. Noteworthy, the reduction mainly came from EAF mills, which had to curb losses. China represents ~57% of global crude steel supply
🏢China's property sales were down 20% YoY in May (vs. -17% YoY in April), and 45% below the historical highs of 2021. The decline in floor space starts was 28% YoY last month, the same as in April. However, personal mortgage loans jumped 22% YoY (also +22% YoY in April), while property completions grew 24% YoY in May. Despite some ongoing uncertainty in China’s real estate segment, the strong liquidity injections in early 2023, together with the potential introduction of new support policies, might trigger a recovery in construction activity later this year, we believe
#steel #property
https://metals-wire.com:3000/sector/Steel
🔗China’s crude steel output fell 7% YoY in May, following the 2% YoY drop in April. The decline comes in line with the government's intention to limit steel production. Noteworthy, the reduction mainly came from EAF mills, which had to curb losses. China represents ~57% of global crude steel supply
🏢China's property sales were down 20% YoY in May (vs. -17% YoY in April), and 45% below the historical highs of 2021. The decline in floor space starts was 28% YoY last month, the same as in April. However, personal mortgage loans jumped 22% YoY (also +22% YoY in April), while property completions grew 24% YoY in May. Despite some ongoing uncertainty in China’s real estate segment, the strong liquidity injections in early 2023, together with the potential introduction of new support policies, might trigger a recovery in construction activity later this year, we believe
#steel #property
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 2)
🔗CISA mills' daily crude steel production during early June was 2.23mnt, a 6.5% increase from the previous ten days (-2.5% YoY). At the same time, local steel inventories rose 1.2% (-14.8% YoY). Output saw a YoY decline for the fifth consecutive ten-day period (starting from 20 April), likely amid CISA’s call to cut production amid low domestic steel prices. Such dynamics, were they to persist, would support the sentiment on steel, we think. Furthermore, the potential new stimulus for China’s property sector might also favourably affect demand for the metal in 2023
#steel
https://metals-wire.com:3000/sector/Steel
🔗CISA mills' daily crude steel production during early June was 2.23mnt, a 6.5% increase from the previous ten days (-2.5% YoY). At the same time, local steel inventories rose 1.2% (-14.8% YoY). Output saw a YoY decline for the fifth consecutive ten-day period (starting from 20 April), likely amid CISA’s call to cut production amid low domestic steel prices. Such dynamics, were they to persist, would support the sentiment on steel, we think. Furthermore, the potential new stimulus for China’s property sector might also favourably affect demand for the metal in 2023
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 3)
🚘US light vehicle sales rose 23% YoY in May, accelerating from the 9% YoY growth in April (still 14% below the pre-Covid 2019 level). Seasonally adjusted sales volumes grew 19% YoY last month (-12% vs. 2019). Although market participants in the US continue to be concerned about inflated car prices and growing interest rates, customer demand remains strong, which might bolster the positive YoY trend. However, we do not expect the US domestic market to recover to pre-Covid levels in 2023; therefore, the demand for PGMs from the automotive sector is likely to remain subdued
#cars
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🚘US light vehicle sales rose 23% YoY in May, accelerating from the 9% YoY growth in April (still 14% below the pre-Covid 2019 level). Seasonally adjusted sales volumes grew 19% YoY last month (-12% vs. 2019). Although market participants in the US continue to be concerned about inflated car prices and growing interest rates, customer demand remains strong, which might bolster the positive YoY trend. However, we do not expect the US domestic market to recover to pre-Covid levels in 2023; therefore, the demand for PGMs from the automotive sector is likely to remain subdued
#cars
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Morning Bites (part 4)
💎India’s rough diamond net imports dropped 19% YoY in May, continuing the decline seen since December 2022 (except the 7% YoY growth in April). Meanwhile, India’s polished diamond net exports dropped 17% YoY in May (after the -39% YoY in April), while synthetic rough diamond net imports fell 50% YoY (-52% YoY). The share of lab-grown net rough imports in natural diamond imports was 8% in April, slightly less than the 9% in 2022. Hence, rather weak demand from India’s midstream (~95% of world polished stones supply) underpins our cautious view on the global diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
💎India’s rough diamond net imports dropped 19% YoY in May, continuing the decline seen since December 2022 (except the 7% YoY growth in April). Meanwhile, India’s polished diamond net exports dropped 17% YoY in May (after the -39% YoY in April), while synthetic rough diamond net imports fell 50% YoY (-52% YoY). The share of lab-grown net rough imports in natural diamond imports was 8% in April, slightly less than the 9% in 2022. Hence, rather weak demand from India’s midstream (~95% of world polished stones supply) underpins our cautious view on the global diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
💍China’s jewellery and watch retail sales declined 12% YoY in May, reversing from the 45% YoY surge in April. The figure was only 2% above the (pre-pandemic) 2019 level. According to local market sources, mixed signals in the Chinese economy affected middle-class consumers, preventing them from big purchases. Overall, even if China’s economy recovers to previous growth trends, we expect a limited effect on the global diamond market (China represents only ~15% of the world's gem-set jewellery trade), and maintain our cautious outlook on the sector — mostly due to adverse global macroeconomic conditions and weak US jewellery sales
#diamonds
https://metals-wire.com/sector/Diamonds
💍China’s jewellery and watch retail sales declined 12% YoY in May, reversing from the 45% YoY surge in April. The figure was only 2% above the (pre-pandemic) 2019 level. According to local market sources, mixed signals in the Chinese economy affected middle-class consumers, preventing them from big purchases. Overall, even if China’s economy recovers to previous growth trends, we expect a limited effect on the global diamond market (China represents only ~15% of the world's gem-set jewellery trade), and maintain our cautious outlook on the sector — mostly due to adverse global macroeconomic conditions and weak US jewellery sales
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🇿🇦South Africa has extended its ban on scrap-metal exports by six months, Bloomberg reports. The measure was introduced in late-2022 amid efforts to stop copper cable theft. The country’s Trade and Industry minister has ordered the revocation of scrap export permits due to increased cases of damage to the municipal property. In our view, this decision underpins persisting issues that have been exacerbating the negative effects of the local energy crisis, which creates power shortages and weighs on global PGM supply given South Africa accounts for ~38% and 70% of world Pd and Pt mined output, respectively. However, we remain cautious on PGMs, as weak demand from the automotive sector might offset the favorable effects on prices
#PGMs
https://metals-wire.com:3000/sector/PGM
🇿🇦South Africa has extended its ban on scrap-metal exports by six months, Bloomberg reports. The measure was introduced in late-2022 amid efforts to stop copper cable theft. The country’s Trade and Industry minister has ordered the revocation of scrap export permits due to increased cases of damage to the municipal property. In our view, this decision underpins persisting issues that have been exacerbating the negative effects of the local energy crisis, which creates power shortages and weighs on global PGM supply given South Africa accounts for ~38% and 70% of world Pd and Pt mined output, respectively. However, we remain cautious on PGMs, as weak demand from the automotive sector might offset the favorable effects on prices
#PGMs
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Morning Bites
⛏Russian Platinum has postponed the launch of its Chernogorskoye pit, amid disrupted equipment supply. According to Interfax, citing the company’s owner, Musa Bazhaev, the commissioning is now expected in 2025, vs. the initial plan (2024). The project's estimated capacity is 450koz of Pd and 170koz of Pt (~7% and 3% of global 2025F supply, respectively). In our view, the rescheduling might have some negative effect on PGM market balance in 2024. However, we do not anticipate a significant effect on sentiment: the project has been continuously postponed (since 2015), while demand from the auto sector is likely to remain sluggish in the near future, in our view
#PGMs
https://metals-wire.com:3000/sector/PGM
⛏Russian Platinum has postponed the launch of its Chernogorskoye pit, amid disrupted equipment supply. According to Interfax, citing the company’s owner, Musa Bazhaev, the commissioning is now expected in 2025, vs. the initial plan (2024). The project's estimated capacity is 450koz of Pd and 170koz of Pt (~7% and 3% of global 2025F supply, respectively). In our view, the rescheduling might have some negative effect on PGM market balance in 2024. However, we do not anticipate a significant effect on sentiment: the project has been continuously postponed (since 2015), while demand from the auto sector is likely to remain sluggish in the near future, in our view
#PGMs
https://metals-wire.com:3000/sector/PGM
Morning Bites
🇧🇴 CATL is set to develop its first lithium plants in Bolivia. Following a meeting with the company’s executives on Sunday, Bolivian President Luis Arce confirmed the commitment to build two mineral extraction plants with an expected joint capacity of 50kt of LCE per annum (~3% of global Li supply in 2025F), and the first shipment expected in 2Q25. Overall, CATL's plans for exposure into lithium mining likely reflects the growing consumer appetite for EVs globally
#lithium
https://metals-wire.com:3000/sector/Lithium
🇧🇴 CATL is set to develop its first lithium plants in Bolivia. Following a meeting with the company’s executives on Sunday, Bolivian President Luis Arce confirmed the commitment to build two mineral extraction plants with an expected joint capacity of 50kt of LCE per annum (~3% of global Li supply in 2025F), and the first shipment expected in 2Q25. Overall, CATL's plans for exposure into lithium mining likely reflects the growing consumer appetite for EVs globally
#lithium
https://metals-wire.com:3000/sector/Lithium
Morning Bites (part 1)
💎De Beers has reported sales of USD 450mn at its 5th cycle in 2023, 25% below the historical average and 32% lower YoY (vs. -21% YoY at the 4th cycle in 2023). Per De Beers CEO Al Cook, global macroeconomic challenges continued to affect buyer sentiment, with the sector remaining cautious heading into summer. Overall, the dynamics were in-line with recent news: De Beers has postponed its auctions (traditionally ~10% of its rough sales) during Cycles 5-6 amid weak demand from Indian cutters, in addition to the recently reduced prices. Hence, we reiterate our view that adverse economic conditions globally, and continuously soft US jewellery sales (50% of world demand), are likely to keep the diamond sector under pressure
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 450mn at its 5th cycle in 2023, 25% below the historical average and 32% lower YoY (vs. -21% YoY at the 4th cycle in 2023). Per De Beers CEO Al Cook, global macroeconomic challenges continued to affect buyer sentiment, with the sector remaining cautious heading into summer. Overall, the dynamics were in-line with recent news: De Beers has postponed its auctions (traditionally ~10% of its rough sales) during Cycles 5-6 amid weak demand from Indian cutters, in addition to the recently reduced prices. Hence, we reiterate our view that adverse economic conditions globally, and continuously soft US jewellery sales (50% of world demand), are likely to keep the diamond sector under pressure
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
📈Global primary aluminium production rose 1% YoY in May, in line with the 1% YoY growth in April, the International Aluminium Institute (IAI) reports. Meanwhile, last month, China’s production remained flat YoY. The country’s output was also 13% higher than the pre-Covid (2019) level, while ex-China production rose 1% YoY (+2% vs. 2019). Despite the stable dynamics in recent months, we remind readers that China might relaunch its previously suspended capacities, as well as commission new smelters in FY23 (jointly representing ~6% of global Al supply). However, this outlook seems overly ambitious to us, while a Reuters source expects China to resume only up to 1.3mnt of its halted Al capacity (~2% of global 2022 output), when electricity curbs ease
#aluminium
https://metals-wire.com:3000/sector/Aluminium
📈Global primary aluminium production rose 1% YoY in May, in line with the 1% YoY growth in April, the International Aluminium Institute (IAI) reports. Meanwhile, last month, China’s production remained flat YoY. The country’s output was also 13% higher than the pre-Covid (2019) level, while ex-China production rose 1% YoY (+2% vs. 2019). Despite the stable dynamics in recent months, we remind readers that China might relaunch its previously suspended capacities, as well as commission new smelters in FY23 (jointly representing ~6% of global Al supply). However, this outlook seems overly ambitious to us, while a Reuters source expects China to resume only up to 1.3mnt of its halted Al capacity (~2% of global 2022 output), when electricity curbs ease
#aluminium
https://metals-wire.com:3000/sector/Aluminium
Morning Bites (part 3)
🇨🇳China has extended tax incentives for EV purchases until 2027, in line with recent indications. According to Bloomberg, the incentive is estimated to be worth CNY 520bn (USD 72bn). Specifically, new EVs below CNY 300k (USD 42k) are now excluded from the 10% sales tax until end-2025, while EVs priced under CNY 150k are to get further support until end-2027. Overall, the decision is likely to bolster demand for the battery metals basket further (e.g. lithium, nickel and cobalt), we believe
#cars #EV #nickel #lithium #cobalt
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🇨🇳China has extended tax incentives for EV purchases until 2027, in line with recent indications. According to Bloomberg, the incentive is estimated to be worth CNY 520bn (USD 72bn). Specifically, new EVs below CNY 300k (USD 42k) are now excluded from the 10% sales tax until end-2025, while EVs priced under CNY 150k are to get further support until end-2027. Overall, the decision is likely to bolster demand for the battery metals basket further (e.g. lithium, nickel and cobalt), we believe
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🚘EU + UK passenger car registrations rose 18% YoY in May, slightly accelerating from the 16% YoY growth in April. The results were in line with our estimates. Nevertheless, the figure was still 23% below the pre-COVID, 2019 level (-28% in April). Therefore, we reiterate our view that car sales in Europe are likely to remain stressed, at least in the near future, amid the adverse global macroeconomic conditions. Overall, this would keep weighing on PGM demand: the region accounted for ~20% and 32% of the world autocatalyst Pd and Pt consumption, respectively, in 2022E
#cars
https://metals-wire.com:3000/sector/PGM
🚘EU + UK passenger car registrations rose 18% YoY in May, slightly accelerating from the 16% YoY growth in April. The results were in line with our estimates. Nevertheless, the figure was still 23% below the pre-COVID, 2019 level (-28% in April). Therefore, we reiterate our view that car sales in Europe are likely to remain stressed, at least in the near future, amid the adverse global macroeconomic conditions. Overall, this would keep weighing on PGM demand: the region accounted for ~20% and 32% of the world autocatalyst Pd and Pt consumption, respectively, in 2022E
#cars
https://metals-wire.com:3000/sector/PGM
Morning Bites (part 2)
🔗Global crude steel output was down 5% YoY to 162mnt in May, accelerating from the 2% YoY decline in April, according to the World Steel Association. Meanwhile, China’s production dropped 7% YoY, reflecting CISA’s call to lower supply amid stressed steel prices, as well as the government's intention to cap national output (56% of the global steel supply in May) at its 2022 levels, in our view. Ex-China steel production shrank 2% YoY. Specifically, EU production dropped 11% YoY (similar to the -12% YoY in April), following the local energy crisis. US steel production declined 2% YoY. However, Russia’s steel output rose 9% YoY in May, after the 2% YoY increase in April
#steel
https://metals-wire.com:3000/sector/Steel
🔗Global crude steel output was down 5% YoY to 162mnt in May, accelerating from the 2% YoY decline in April, according to the World Steel Association. Meanwhile, China’s production dropped 7% YoY, reflecting CISA’s call to lower supply amid stressed steel prices, as well as the government's intention to cap national output (56% of the global steel supply in May) at its 2022 levels, in our view. Ex-China steel production shrank 2% YoY. Specifically, EU production dropped 11% YoY (similar to the -12% YoY in April), following the local energy crisis. US steel production declined 2% YoY. However, Russia’s steel output rose 9% YoY in May, after the 2% YoY increase in April
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites
⛏Newmont has again delayed its investment decision on Yanacocha Sulfides by at least two years, following a portfolio optimisation strategy, the company reports. The gold miner has not specified when it is to make the decision. The project was estimated to add ~500koz of gold per annum (0.5% of global Au supply in 2022) to the output of Peru’s Yanacocha mine (240koz last year). Meanwhile, we expect only a limited positive effect on market sentiment, as the funding decision for the Sulifdes project has already been postponed several times since 2021
#gold
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⛏Newmont has again delayed its investment decision on Yanacocha Sulfides by at least two years, following a portfolio optimisation strategy, the company reports. The gold miner has not specified when it is to make the decision. The project was estimated to add ~500koz of gold per annum (0.5% of global Au supply in 2022) to the output of Peru’s Yanacocha mine (240koz last year). Meanwhile, we expect only a limited positive effect on market sentiment, as the funding decision for the Sulifdes project has already been postponed several times since 2021
#gold
https://metals-wire.com:3000/sector/Gold
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Morning Bites
🇨🇱Floods are posing risks to Chilean copper mining. Heavy rains have led to road closures in some of the country's central and southern regions due to the risk of mudslides. Meanwhile, Codelco (~7% of the global Cu output) has already suspended some of its operations. We believe that these disruptions might, if they persist, support sentiment on the copper market, given Chile represents ~27% of the world mined supply
⛏Newmont has declared a force majeure on some shipments from Peñasquito, due to production interruptions, Reuters reports. The company had recently halted operations at the Mexico mine (0.5% of world gold production in 2022), following a labour strike. Hence, we reiterate our view that the strike, if not resolved soon, might further weigh on supply -- a favorable factor for gold price performance
#copper #gold
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🇨🇱Floods are posing risks to Chilean copper mining. Heavy rains have led to road closures in some of the country's central and southern regions due to the risk of mudslides. Meanwhile, Codelco (~7% of the global Cu output) has already suspended some of its operations. We believe that these disruptions might, if they persist, support sentiment on the copper market, given Chile represents ~27% of the world mined supply
⛏Newmont has declared a force majeure on some shipments from Peñasquito, due to production interruptions, Reuters reports. The company had recently halted operations at the Mexico mine (0.5% of world gold production in 2022), following a labour strike. Hence, we reiterate our view that the strike, if not resolved soon, might further weigh on supply -- a favorable factor for gold price performance
#copper #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🔗CISA mills' daily crude steel production during mid-June was 2.26mnt, a 1.4% increase from the previous ten days, but almost flat YoY (+0.2%). Meanwhile, local steel inventories grew 2.6% over the same period (-21.0% YoY). The recent output declines have likely followed CISA’s call to cut production (in order to bolster local steel prices) and Beijing’s stated intention not to exceed the 2022 production levels. We reiterate our view that these factors, along with potentially new support measures for the property sector, are likely to have a positive effect on the sentiment on steel
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during mid-June was 2.26mnt, a 1.4% increase from the previous ten days, but almost flat YoY (+0.2%). Meanwhile, local steel inventories grew 2.6% over the same period (-21.0% YoY). The recent output declines have likely followed CISA’s call to cut production (in order to bolster local steel prices) and Beijing’s stated intention not to exceed the 2022 production levels. We reiterate our view that these factors, along with potentially new support measures for the property sector, are likely to have a positive effect on the sentiment on steel
#steel
https://metals-wire.com/sector/Steel