Morning Bites (part 1)
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 18% YoY in June, a slight acceleration from the 17% YoY growth in May. Nevertheless, the figure was still 18% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 14% and 23%, respectively, vs. 2019, while sales in France were 17% lower. Moreover, sales in the UK and Italy were 21% and 19% less than in 2019, respectively. Given that these countries represent ~70% of total European new vehicle registrations, we believe that local car sales have likely continued to show YoY growth, while remaining below their pre-pandemic levels
#cars
https://metals-wire.com:3000/sector/PGM
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 18% YoY in June, a slight acceleration from the 17% YoY growth in May. Nevertheless, the figure was still 18% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 14% and 23%, respectively, vs. 2019, while sales in France were 17% lower. Moreover, sales in the UK and Italy were 21% and 19% less than in 2019, respectively. Given that these countries represent ~70% of total European new vehicle registrations, we believe that local car sales have likely continued to show YoY growth, while remaining below their pre-pandemic levels
#cars
https://metals-wire.com:3000/sector/PGM
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Morning Bites (part 2)
🏦China continued to accumulate gold reserves in June, being a net purchaser for the eighth consecutive month, Bloomberg reports. According to the latest announcement from the People's Bank of China, it bought 23 tons of gold, bringing total purchases since November 2022 to 183 tons. We note that, in annualised terms, purchases in the period November 2022 - June 2023 are equivalent to ~6% of world physical gold demand in 2022. As per Bloomberg, the ongoing accumulation of gold reserves has been driven by looming geopolitical tensions and the stated aim to reduce the share of the US dollar in reserves. Overall, we keep our positive view on gold prices, given miners’ rising cash costs and inflationary pressures. In addition, CB managers reportedly intend to continue accumulating reserves later in 2023
#gold
https://metals-wire.com/sector/Gold
🏦China continued to accumulate gold reserves in June, being a net purchaser for the eighth consecutive month, Bloomberg reports. According to the latest announcement from the People's Bank of China, it bought 23 tons of gold, bringing total purchases since November 2022 to 183 tons. We note that, in annualised terms, purchases in the period November 2022 - June 2023 are equivalent to ~6% of world physical gold demand in 2022. As per Bloomberg, the ongoing accumulation of gold reserves has been driven by looming geopolitical tensions and the stated aim to reduce the share of the US dollar in reserves. Overall, we keep our positive view on gold prices, given miners’ rising cash costs and inflationary pressures. In addition, CB managers reportedly intend to continue accumulating reserves later in 2023
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 1)
🏗China’s excavator sales dropped 24% YoY in June (domestic + export), after the 19% YoY fall in May. The decline was roughly in line with preliminary CME estimates (-23% YoY). Specifically, domestic excavator sales were down 45% YoY, vs. the 46% YoY fall in May. As a leading indicator of construction activity, sluggish domestic excavator sales show that China’s property sector remains weak (sales have been showing negative YoY dynamics since May 2021), which is a negative factor for China’s demand for industrial metals. The country represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#steel
https://metals-wire.com/sector/Steel
🏗China’s excavator sales dropped 24% YoY in June (domestic + export), after the 19% YoY fall in May. The decline was roughly in line with preliminary CME estimates (-23% YoY). Specifically, domestic excavator sales were down 45% YoY, vs. the 46% YoY fall in May. As a leading indicator of construction activity, sluggish domestic excavator sales show that China’s property sector remains weak (sales have been showing negative YoY dynamics since May 2021), which is a negative factor for China’s demand for industrial metals. The country represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
💍 Chow Tai Fook’s 2Q23 LFL sales were up 1% YoY in the gem-set, platinum and K-gold jewellery segment (vs. +12% YoY in 1Q23). Sales in the gem-set segment in Mainland China were down 4% YoY (vs. -19% YoY in 1Q23), while HK and Macau sales were up 17% YoY, after the 99% YoY spike in the previous quarter. The overall dynamics were neutral: sales in HK continued to recover after the border with Mainland China reopened, but the figure was offset by stressed sales in China itself. To recap, China accounts for ~15% of global diamond jewellery retail sales. Hence, we maintain our cautious view on the diamond sector, which is still heavily stressed by the adverse macroeconomic conditions globally and the continuous downturn in US sales (~50% of the world gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
💍 Chow Tai Fook’s 2Q23 LFL sales were up 1% YoY in the gem-set, platinum and K-gold jewellery segment (vs. +12% YoY in 1Q23). Sales in the gem-set segment in Mainland China were down 4% YoY (vs. -19% YoY in 1Q23), while HK and Macau sales were up 17% YoY, after the 99% YoY spike in the previous quarter. The overall dynamics were neutral: sales in HK continued to recover after the border with Mainland China reopened, but the figure was offset by stressed sales in China itself. To recap, China accounts for ~15% of global diamond jewellery retail sales. Hence, we maintain our cautious view on the diamond sector, which is still heavily stressed by the adverse macroeconomic conditions globally and the continuous downturn in US sales (~50% of the world gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
💎Kimberley Process has reported a 1% YoY drop, to 118.0mnct, in global diamond production in 2022. Botswana's output was flat YoY, while production in Russia rose 7% YoY to 41.9mnct. However, this increase was offset by declining output in the rest of the world. Despite relatively stable production in 2022, we maintain our view that the stressed global jewellery market is likely to keep weighing on diamond demand, at least in the short term
#diamonds
https://metals-wire.com/sector/Diamonds
💎Kimberley Process has reported a 1% YoY drop, to 118.0mnct, in global diamond production in 2022. Botswana's output was flat YoY, while production in Russia rose 7% YoY to 41.9mnct. However, this increase was offset by declining output in the rest of the world. Despite relatively stable production in 2022, we maintain our view that the stressed global jewellery market is likely to keep weighing on diamond demand, at least in the short term
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🏦China’s aggregate financing declined 19% YoY in June to CNY 4.22tn, after the 45% YoY drop in May. The fall was mostly due to the high comparison base in 2022: total financing beat the consensus by 41% in June. At the same time, traditional bank loans rose 9% YoY (-28% YoY in May), 30% above consensus expectations. It was also the largest amount of new bank loans for any June month since early-2000s, which is likely following Beijing's efforts to revive economic growth via reducing its key lending rates. In our view, this might support domestic construction activity, which, together with massive infrastructure projects, might bolster China's demand for industrial metals
#global
https://metals-wire.com:3000/news-reports
🏦China’s aggregate financing declined 19% YoY in June to CNY 4.22tn, after the 45% YoY drop in May. The fall was mostly due to the high comparison base in 2022: total financing beat the consensus by 41% in June. At the same time, traditional bank loans rose 9% YoY (-28% YoY in May), 30% above consensus expectations. It was also the largest amount of new bank loans for any June month since early-2000s, which is likely following Beijing's efforts to revive economic growth via reducing its key lending rates. In our view, this might support domestic construction activity, which, together with massive infrastructure projects, might bolster China's demand for industrial metals
#global
https://metals-wire.com:3000/news-reports
🗞Today, China published its preliminary import/export statistics for June (see table above)
#statistics #China
https://metals-wire.com:3000/news-reports
#statistics #China
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🔗China’s net finished steel exports inched up 2% YoY in June, after the 11% YoY growth in May. At the same time, average daily crude steel output was up 1% YoY, according to the CISA data. We also note that China has eased its monetary policy, in order to revive economic growth, e.g. in the real estate segment, which might provide some support for industrial metals demand later in 2023, in our view
🪨China’s coal imports jumped 110% YoY in June (vs. the +93% YoY in May). Although domestic coal output continued to climb, imports stood at historical highs. According to a recent CREA report, most of the growth was due to increased imports from Australia, following the lifting of restrictions, as well as higher shipments from Russia and Indonesia. Some mismatch between the quality of the produced and the required coal could cause a shift towards imported coal, CREA noted
#coal #steel
https://metals-wire.com:3000/news-reports
🔗China’s net finished steel exports inched up 2% YoY in June, after the 11% YoY growth in May. At the same time, average daily crude steel output was up 1% YoY, according to the CISA data. We also note that China has eased its monetary policy, in order to revive economic growth, e.g. in the real estate segment, which might provide some support for industrial metals demand later in 2023, in our view
🪨China’s coal imports jumped 110% YoY in June (vs. the +93% YoY in May). Although domestic coal output continued to climb, imports stood at historical highs. According to a recent CREA report, most of the growth was due to increased imports from Australia, following the lifting of restrictions, as well as higher shipments from Russia and Indonesia. Some mismatch between the quality of the produced and the required coal could cause a shift towards imported coal, CREA noted
#coal #steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
💎De Beers reduced rough diamond prices at its 6th cycle, as demand continues to disappoint, according to IDEX. The price of stones over 2ct was reduced by 10-20%; however, smaller stones weren't affected, Times of India reports. To recap, during its previous cycle, De Beers also lowered prices for >2ct and 1.0-1.5ct items by 5-10%. On our numbers, the De Beers price index has fallen ~11% YTD. We note that De Beers' sales remain subdued, showing one of the worst YTD dynamics within the observable period, while many factories in Surat are already working reduced hours because of slow demand and tight margins. Given the overall negative market data, we maintain our cautious outlook on the diamond market globally, which is still heavily stressed, affected by the adverse macroeconomic conditions and inflationary pressure
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers reduced rough diamond prices at its 6th cycle, as demand continues to disappoint, according to IDEX. The price of stones over 2ct was reduced by 10-20%; however, smaller stones weren't affected, Times of India reports. To recap, during its previous cycle, De Beers also lowered prices for >2ct and 1.0-1.5ct items by 5-10%. On our numbers, the De Beers price index has fallen ~11% YTD. We note that De Beers' sales remain subdued, showing one of the worst YTD dynamics within the observable period, while many factories in Surat are already working reduced hours because of slow demand and tight margins. Given the overall negative market data, we maintain our cautious outlook on the diamond market globally, which is still heavily stressed, affected by the adverse macroeconomic conditions and inflationary pressure
#diamonds
https://metals-wire.com/sector/Diamonds
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Morning Bites
🇿🇦South Africa’s PGM mining output declined 7% YoY in May, after the 5% YoY drop in April. Meanwhile, the country’s gold production rose 27% YoY, repeating April’s dynamics. To recap, domestic PGM production is suffering from inflationary pressures, electricity shortages and logistical issues. Despite the country’s tightening supply, demand from automakers remains sluggish, so we do not expect the output disruptions to have a material effect on prices. On our numbers, South Africa represents ~70% of global Pt and 38% of Pd supply, respectively (as well as 3% of world gold output)
#PGMs #gold
https://metals-wire.com:3000/news-reports
🇿🇦South Africa’s PGM mining output declined 7% YoY in May, after the 5% YoY drop in April. Meanwhile, the country’s gold production rose 27% YoY, repeating April’s dynamics. To recap, domestic PGM production is suffering from inflationary pressures, electricity shortages and logistical issues. Despite the country’s tightening supply, demand from automakers remains sluggish, so we do not expect the output disruptions to have a material effect on prices. On our numbers, South Africa represents ~70% of global Pt and 38% of Pd supply, respectively (as well as 3% of world gold output)
#PGMs #gold
https://metals-wire.com:3000/news-reports
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🗞Today, China has published its industrial production data for June (see table above)
#statistics #China
https://metals-wire.com:3000/news-reports
#statistics #China
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🔗China’s crude steel output was flat YoY in June, rebounding from the 7% YoY drop in May. According to Reuters, mills (both EAF and BF) were encouraged to ramp up production, as the pricing environment had improved amid the recent measures. To recap, China represents ~57% of global crude steel supply
🏢China's property sales dropped further, being down 28% YoY in June (vs. -20% YoY in May) and 41% below the historical highs of 2021. Floor space starts were down 31% YoY last month (-28% YoY in May), while personal mortgage loans also shrank 13% YoY (+22% YoY in May). At the same time, property completions grew 15% YoY in June. Although China’s property sector remains stressed, we note that strong liquidity inflows in early 2023, together with the new support policies, might trigger a recovery in construction activity later this year
#steel #property
https://metals-wire.com:3000/sector/Steel
🔗China’s crude steel output was flat YoY in June, rebounding from the 7% YoY drop in May. According to Reuters, mills (both EAF and BF) were encouraged to ramp up production, as the pricing environment had improved amid the recent measures. To recap, China represents ~57% of global crude steel supply
🏢China's property sales dropped further, being down 28% YoY in June (vs. -20% YoY in May) and 41% below the historical highs of 2021. Floor space starts were down 31% YoY last month (-28% YoY in May), while personal mortgage loans also shrank 13% YoY (+22% YoY in May). At the same time, property completions grew 15% YoY in June. Although China’s property sector remains stressed, we note that strong liquidity inflows in early 2023, together with the new support policies, might trigger a recovery in construction activity later this year
#steel #property
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 2)
🔗CISA mills' daily crude steel production during early July was 2.24mnt, a 0.3% drop from the previous ten days (+8.0% YoY). At the same time, local steel inventories rose 7.6% (-11.9% YoY). Output has seen the third consecutive YoY growth, following a series of 5 declines. Despite higher output on an annual basis, we remind our readers of Beijing’s intention not to exceed the 2022 production level. Furthermore, massive infrustracture projects, as well as potentially more stimulus for China’s property sector, might bolster the steel demand later this year
#steel
https://metals-wire.com:3000/sector/Steel
🔗CISA mills' daily crude steel production during early July was 2.24mnt, a 0.3% drop from the previous ten days (+8.0% YoY). At the same time, local steel inventories rose 7.6% (-11.9% YoY). Output has seen the third consecutive YoY growth, following a series of 5 declines. Despite higher output on an annual basis, we remind our readers of Beijing’s intention not to exceed the 2022 production level. Furthermore, massive infrustracture projects, as well as potentially more stimulus for China’s property sector, might bolster the steel demand later this year
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 3)
🚗China’s new EV sales are set to increase 31% YoY in 2023 to 9.0mn units, per CAAM estimates. Meanwhile, the 5mo23 figure is already up 47% YoY. China has accounted for ~50% of global EV demand in recent months. Hence, we maintain our view that consistent growth in the appetite for EVs is likely to drive up the consumption of the battery metals basket (e.g. cobalt, lithium and nickel)
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
🚗China’s new EV sales are set to increase 31% YoY in 2023 to 9.0mn units, per CAAM estimates. Meanwhile, the 5mo23 figure is already up 47% YoY. China has accounted for ~50% of global EV demand in recent months. Hence, we maintain our view that consistent growth in the appetite for EVs is likely to drive up the consumption of the battery metals basket (e.g. cobalt, lithium and nickel)
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
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Week ahead data releases in M&M
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among the major M&M names, Alcoa, Freeport, Newmont and JSW Steel are to release their 2Q23 financial results (Alcoa on Wednesday 19 and the rest on Thursday 20 July, respectively). For all miners, except for Freeport, our EBITDA estimates are slightly above the consensus
#reporting_season
https://metals-wire.com:3000/events
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among the major M&M names, Alcoa, Freeport, Newmont and JSW Steel are to release their 2Q23 financial results (Alcoa on Wednesday 19 and the rest on Thursday 20 July, respectively). For all miners, except for Freeport, our EBITDA estimates are slightly above the consensus
#reporting_season
https://metals-wire.com:3000/events
Morning Bites (part 1)
💎India’s rough diamond net imports dropped 24% YoY in June, marking the 7th consecutive month of declines since December 2022 (except the 7% YoY growth in April). Meanwhile, India’s polished diamond net exports fell 33% YoY, accelerating from the 17% YoY decline in May, while synthetic rough diamond net imports decreased 48% YoY (-50% YoY in May). The share of lab-grown net rough imports in natural diamond imports was 7% in May, the same as in May 2022. Given the weak demand data from India’s midstream (~95% of world polished stones supply) we maintain our cautious view on the global diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
💎India’s rough diamond net imports dropped 24% YoY in June, marking the 7th consecutive month of declines since December 2022 (except the 7% YoY growth in April). Meanwhile, India’s polished diamond net exports fell 33% YoY, accelerating from the 17% YoY decline in May, while synthetic rough diamond net imports decreased 48% YoY (-50% YoY in May). The share of lab-grown net rough imports in natural diamond imports was 7% in May, the same as in May 2022. Given the weak demand data from India’s midstream (~95% of world polished stones supply) we maintain our cautious view on the global diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🚘US light vehicle sales rose 21% YoY in June, roughly in line with the 23% YoY growth in May, but still 10% below the pre-Covid 2019 level. Seasonally adjusted sales volumes grew 22% YoY last month (-9% vs. 2019). According to a Reuters source, mixed signals continue to prevail as concerns the demand for new vehicles. In our view, inflated car prices and high loan payments might weigh further on the domestic market in 2023 and, therefore, keep PGM demand from the automotive sector subdued
#cars
https://metals-wire.com:3000/news-reports
🚘US light vehicle sales rose 21% YoY in June, roughly in line with the 23% YoY growth in May, but still 10% below the pre-Covid 2019 level. Seasonally adjusted sales volumes grew 22% YoY last month (-9% vs. 2019). According to a Reuters source, mixed signals continue to prevail as concerns the demand for new vehicles. In our view, inflated car prices and high loan payments might weigh further on the domestic market in 2023 and, therefore, keep PGM demand from the automotive sector subdued
#cars
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
💍Luk Fook’s 2Q23 LFL sales were up 54% YoY in the gem-set, platinum and K-gold jewellery segment (vs. +66% YoY in 1Q23). Despite the robust growth, sales still remain firmly below pre-Covid levels (>40%, on our estimates). Sales in the gem-set segment in Mainland China were down 3% YoY (vs. -15% YoY in 1Q23), while HK and Macau sales rose 65% YoY (>40% drop vs. 2019), after the 88% YoY spike in the previous quarter. Generally, sales were bolstered by HK’s recovery after the border with Mainland China was reopened. Despite the recovery in the company’s gem-set jewellery sales, we keep our cautious view on the diamond segment, given the adverse macroeconomic conditions globally and the ongoing downturn in US sales (~50% of the world gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
💍Luk Fook’s 2Q23 LFL sales were up 54% YoY in the gem-set, platinum and K-gold jewellery segment (vs. +66% YoY in 1Q23). Despite the robust growth, sales still remain firmly below pre-Covid levels (>40%, on our estimates). Sales in the gem-set segment in Mainland China were down 3% YoY (vs. -15% YoY in 1Q23), while HK and Macau sales rose 65% YoY (>40% drop vs. 2019), after the 88% YoY spike in the previous quarter. Generally, sales were bolstered by HK’s recovery after the border with Mainland China was reopened. Despite the recovery in the company’s gem-set jewellery sales, we keep our cautious view on the diamond segment, given the adverse macroeconomic conditions globally and the ongoing downturn in US sales (~50% of the world gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🇵🇪A new wave of protests is looming in Peru’s mining areas. According to Reuters, local communities are set to join protests this Wednesday. Mining activity in Peru (the world's 2nd largest Cu producer with some ~11% of global supply) was heavily affected in January and February by mining corridor blockades. After the previous wave of protests had been resolved, supplies recovered strongly YoY; however, disruption risks are re-emerging, which might be a favourable factor for copper prices — at least sentiment-wise
#copper
https://metals-wire.com/sector/Copper
🇵🇪A new wave of protests is looming in Peru’s mining areas. According to Reuters, local communities are set to join protests this Wednesday. Mining activity in Peru (the world's 2nd largest Cu producer with some ~11% of global supply) was heavily affected in January and February by mining corridor blockades. After the previous wave of protests had been resolved, supplies recovered strongly YoY; however, disruption risks are re-emerging, which might be a favourable factor for copper prices — at least sentiment-wise
#copper
https://metals-wire.com/sector/Copper