Morning Bites (part 1)
💍China’s jewellery and watch retail sales declined 14% YoY in June, following the 12% YoY decline in May. The figure was also 1% below the (pre-pandemic) 2019 level. The dynamic likely represents the concerns of the middle class, given mixed signals on China’s economic recovery. To recap, China represents ~15% of the world's gem-set jewellery trade. Given weak sales data in China and the US, we maintain our cautious outlook on the diamond sector, amid adverse macroeconomic conditions globally
#diamonds
https://metals-wire.com/sector/Diamonds
💍China’s jewellery and watch retail sales declined 14% YoY in June, following the 12% YoY decline in May. The figure was also 1% below the (pre-pandemic) 2019 level. The dynamic likely represents the concerns of the middle class, given mixed signals on China’s economic recovery. To recap, China represents ~15% of the world's gem-set jewellery trade. Given weak sales data in China and the US, we maintain our cautious outlook on the diamond sector, amid adverse macroeconomic conditions globally
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
⛏SolGold has signed an agreement to develop the Cascabel mine in Ecuador, Reuters reports. Construction is slated to start in 2025, with mining operations launching in 2030. According to the local ministry, Cascabel could become the world's largest silver mine, as well as No. 3 in terms of gold and No. 6 for copper. However, according to the pre-feasibility study from April 2023, the mine would, on average, bring 132kt of copper (0.6% of global mined output in 2022), 358koz of gold (0.3% of global supply) and 1mnoz of silver (0.1%). We note that, on our numbers, the project’s capex/t is about double that of peers'. Furthermore, recent large copper projects globally have been delayed by up to 30%, also with 25-30% higher actual capex. Hence, we do not expect any substantial effect on the market balance of these metals, at least at this point, given the long-term nature of the project
#copper
https://metals-wire.com/sector/Copper
⛏SolGold has signed an agreement to develop the Cascabel mine in Ecuador, Reuters reports. Construction is slated to start in 2025, with mining operations launching in 2030. According to the local ministry, Cascabel could become the world's largest silver mine, as well as No. 3 in terms of gold and No. 6 for copper. However, according to the pre-feasibility study from April 2023, the mine would, on average, bring 132kt of copper (0.6% of global mined output in 2022), 358koz of gold (0.3% of global supply) and 1mnoz of silver (0.1%). We note that, on our numbers, the project’s capex/t is about double that of peers'. Furthermore, recent large copper projects globally have been delayed by up to 30%, also with 25-30% higher actual capex. Hence, we do not expect any substantial effect on the market balance of these metals, at least at this point, given the long-term nature of the project
#copper
https://metals-wire.com/sector/Copper
Week ahead data releases in M&M
As reporting season continues, several M&M names are scheduled to publish their earnings. For the major miners publishing this week (Anglo American Platinum, Arcelor Mittal, US Steel and Nexa Resources), our EBITDA forecasts are slightly below the consensus, while for the rest we are more bullish
#reporting_season
https://metals-wire.com:3000/events
As reporting season continues, several M&M names are scheduled to publish their earnings. For the major miners publishing this week (Anglo American Platinum, Arcelor Mittal, US Steel and Nexa Resources), our EBITDA forecasts are slightly below the consensus, while for the rest we are more bullish
#reporting_season
https://metals-wire.com:3000/events
Anglo American Platinum 1H23 results - one-off ruined EBITDA
📝Amplat's 1H23 revenues beat our estimates by 5% (in-line with consensus). Although the miner reported low EBITDA (-37% vs. the consensus and -35% vs. us), this was mostly due to concentrate inventory movements. Excluding the inventory effect, EBITDA broadly met both the consensus and our forecasts
📈The PGM miner's cash cost jumped 24% YoY to ZAR 18,076/oz, following lower mined volume, the local electricity crisis and a weaker ZAR/USD exchange rate. Management sees costs stabilising at ~ZAR 17,800/oz in 2023 (+16% YoY)
⛏Amplats has reiterated its 2023 production guidance at 3.6-4.0mnoz of refined PGM
💰The BoD has declared an interim dividend of ZAR 12/sh. (~1.3% yield) — in line with the dividend policy
📌At spot, Amplat's 2H23F EBITDA will decline HoH, on our numbers, following lower prices across its whole metals basket
#AMS #PGMs
https://metals-wire.com/company/AMS_SJ/
📝Amplat's 1H23 revenues beat our estimates by 5% (in-line with consensus). Although the miner reported low EBITDA (-37% vs. the consensus and -35% vs. us), this was mostly due to concentrate inventory movements. Excluding the inventory effect, EBITDA broadly met both the consensus and our forecasts
📈The PGM miner's cash cost jumped 24% YoY to ZAR 18,076/oz, following lower mined volume, the local electricity crisis and a weaker ZAR/USD exchange rate. Management sees costs stabilising at ~ZAR 17,800/oz in 2023 (+16% YoY)
⛏Amplats has reiterated its 2023 production guidance at 3.6-4.0mnoz of refined PGM
💰The BoD has declared an interim dividend of ZAR 12/sh. (~1.3% yield) — in line with the dividend policy
📌At spot, Amplat's 2H23F EBITDA will decline HoH, on our numbers, following lower prices across its whole metals basket
#AMS #PGMs
https://metals-wire.com/company/AMS_SJ/
Morning Bites (part 1)
🔗China’s aluminium products output jumped 10% YoY to 6.03mnt in June, vs. +1% YoY in May. Overall, monthly production dynamics were solid for the 12th consecutive month (ex. December 2022, with -4% YoY). Given China accounted for ~58% of world primary Al demand in 2022, increasing consumption is a favourable factor for the metal's price. However, once local electricity curbs are eased, China might relaunch some smelters (>2% of world 2022 Al supply), which could offset the positive effect
📈Chinese output of copper products was up 5% YoY in June to 2.11mt, decelerating from +11% YoY in May. The figure might have been partially supported by a 53% YoY growth in the output of domestic power generation equipment (vs. +30% YoY in May). Given China represents ~55% of global Cu consumption, this number is a potential positive for copper sentiment
#aluminium #copper
https://metals-wire.com:3000/news-reports
🔗China’s aluminium products output jumped 10% YoY to 6.03mnt in June, vs. +1% YoY in May. Overall, monthly production dynamics were solid for the 12th consecutive month (ex. December 2022, with -4% YoY). Given China accounted for ~58% of world primary Al demand in 2022, increasing consumption is a favourable factor for the metal's price. However, once local electricity curbs are eased, China might relaunch some smelters (>2% of world 2022 Al supply), which could offset the positive effect
📈Chinese output of copper products was up 5% YoY in June to 2.11mt, decelerating from +11% YoY in May. The figure might have been partially supported by a 53% YoY growth in the output of domestic power generation equipment (vs. +30% YoY in May). Given China represents ~55% of global Cu consumption, this number is a potential positive for copper sentiment
#aluminium #copper
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🏗China’s excavator sales are set to decline 14% YoY in 2023 (domestic + export), following the 24% YoY decline in 2022, per CCMA’s (China Construction Machinery Association) estimates. However, export sales are forecasted to gain 10-15% YoY this year. Hence, China’s domestic sales might shrink 33% YoY in 2023, as well as ~17% in 2H23 (vs. -44% YoY in 1H23), on our numbers. As a leading indicator of construction activity, further stagnation in domestic excavator sales, were it to materialise, would indicate the absence of recovery in China’s property sector. This is a potentially adverse factor for the short-term demand for industrial metals (such as steel, aluminium and copper)
#steel
https://metals-wire.com/sector/Steel
🏗China’s excavator sales are set to decline 14% YoY in 2023 (domestic + export), following the 24% YoY decline in 2022, per CCMA’s (China Construction Machinery Association) estimates. However, export sales are forecasted to gain 10-15% YoY this year. Hence, China’s domestic sales might shrink 33% YoY in 2023, as well as ~17% in 2H23 (vs. -44% YoY in 1H23), on our numbers. As a leading indicator of construction activity, further stagnation in domestic excavator sales, were it to materialise, would indicate the absence of recovery in China’s property sector. This is a potentially adverse factor for the short-term demand for industrial metals (such as steel, aluminium and copper)
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 3)
🏆China’s gold production was up 3% YoY in 2Q23 (vs. +7% YoY in 1Q23), per China Gold Association. The agency also notes that local gold enterprises returned to normal production levels during 1H23. Meanwhile, the country's gold consumption grew 22% YoY in 2Q23 (vs. +12% YoY in 1Q23), also being up 11% vs. the pre-COVID (2019) level. Specifically, gold jewellery and bars&coins demand jumped 18% and 46% YoY, respectively. Overall, China’s rising gold output (~9% of world metal's output) might be at least partially offset by the solid consumption growth, underpinning strong demand fundamentals
#gold
https://metals-wire.com/sector/Gold
🏆China’s gold production was up 3% YoY in 2Q23 (vs. +7% YoY in 1Q23), per China Gold Association. The agency also notes that local gold enterprises returned to normal production levels during 1H23. Meanwhile, the country's gold consumption grew 22% YoY in 2Q23 (vs. +12% YoY in 1Q23), also being up 11% vs. the pre-COVID (2019) level. Specifically, gold jewellery and bars&coins demand jumped 18% and 46% YoY, respectively. Overall, China’s rising gold output (~9% of world metal's output) might be at least partially offset by the solid consumption growth, underpinning strong demand fundamentals
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 1)
💎De Beers has reported sales of USD 410mn at its 6th cycle in 2023, 22% below the historical average and 36% lower YoY (vs. -25% YoY at the 5th cycle in 2023). According to De Beers CEO Al Cook, adverse macroeconomic conditions globally continue to put pressure on the diamond industry, particularly the midstream’s purchases. The weak sales generally continued the negative trend of recent months: De Beers lowered its prices 5-20% at the 6th Cycle, as well as postponed its auctions (historically ~10% of its rough sales) during Cycles 5-6 amid soft demand from Indian cutters. Hence, we maintain our cautious outlook on the diamond sector, given the adverse economic conditions globally and ongoing weak US sales (50% of the world gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 410mn at its 6th cycle in 2023, 22% below the historical average and 36% lower YoY (vs. -25% YoY at the 5th cycle in 2023). According to De Beers CEO Al Cook, adverse macroeconomic conditions globally continue to put pressure on the diamond industry, particularly the midstream’s purchases. The weak sales generally continued the negative trend of recent months: De Beers lowered its prices 5-20% at the 6th Cycle, as well as postponed its auctions (historically ~10% of its rough sales) during Cycles 5-6 amid soft demand from Indian cutters. Hence, we maintain our cautious outlook on the diamond sector, given the adverse economic conditions globally and ongoing weak US sales (50% of the world gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🔗Global crude steel output was roughly flat YoY (159mnt) in June, after the 5% YoY drop in May, according to the World Steel Association. Meanwhile, China’s production also remained unchanged YoY (vs. -7% YoY in May), while ex-China steel output shrank <1% YoY. Specifically, EU supply dropped 11% YoY (in line May's dynamics), following the local energy crisis. US steel production inched up 1% YoY, while Russia’s steel output rose 4% YoY in June, after the 9% YoY increase in May. Noteworthy, Beijing has recently signaled more stimulus for the domestic economy. Although there are no details on the potential measures yet, this might add some support to China’s depressed property segment — the main positive trigger for global steel prices
#steel
https://metals-wire.com:3000/sector/Steel
🔗Global crude steel output was roughly flat YoY (159mnt) in June, after the 5% YoY drop in May, according to the World Steel Association. Meanwhile, China’s production also remained unchanged YoY (vs. -7% YoY in May), while ex-China steel output shrank <1% YoY. Specifically, EU supply dropped 11% YoY (in line May's dynamics), following the local energy crisis. US steel production inched up 1% YoY, while Russia’s steel output rose 4% YoY in June, after the 9% YoY increase in May. Noteworthy, Beijing has recently signaled more stimulus for the domestic economy. Although there are no details on the potential measures yet, this might add some support to China’s depressed property segment — the main positive trigger for global steel prices
#steel
https://metals-wire.com:3000/sector/Steel
First Quantum 2Q23 results - EBITDA again disappoints
📝The miner’s 2Q23 revenues were firmly below market expectations, driven by weaker copper/gold output than we had anticipated. As a result, EBITDA also missed on the downside (-19% vs. consensus and -22% vs. us), amplified by continuing inflationary pressures
📌According to First Quantum, its 2Q23 C1 copper cash cost declined 12% QoQ, but it was still 14% higher YoY, at USD 1.98/lb. The miner reiterated its outlook for FY23: management sees the figure normalising to USD 1.65-1.85/lb
🏭The company has also maintained its production guidance for FY23: copper volumes are to grow ~4% YoY, with gold output remaining almost flat
📌At spot prices, we expect First Quantum’s 3Q23F EBITDA to recover at double digit rates QoQ, amid a production recovery and further normalisation in cash costs
#FM #copper
https://metals-wire.com/company/FM_CN/
📝The miner’s 2Q23 revenues were firmly below market expectations, driven by weaker copper/gold output than we had anticipated. As a result, EBITDA also missed on the downside (-19% vs. consensus and -22% vs. us), amplified by continuing inflationary pressures
📌According to First Quantum, its 2Q23 C1 copper cash cost declined 12% QoQ, but it was still 14% higher YoY, at USD 1.98/lb. The miner reiterated its outlook for FY23: management sees the figure normalising to USD 1.65-1.85/lb
🏭The company has also maintained its production guidance for FY23: copper volumes are to grow ~4% YoY, with gold output remaining almost flat
📌At spot prices, we expect First Quantum’s 3Q23F EBITDA to recover at double digit rates QoQ, amid a production recovery and further normalisation in cash costs
#FM #copper
https://metals-wire.com/company/FM_CN/
Rio Tinto 1H23 results - EBITDA showed a slight miss
📝Rio Tinto's 1H23 revenues were slightly stronger than both consensus and our expectations (by 2% and 3%, respectively). Meanwhile, EBITDA came in below the forecasts (-3% vs. consensus and -5% vs. us), affected by higher costs in aluminium segment and a cost spike at Kennecott copper mine
⛏Rio has reiterated its FY23 guidance: iron ore shipments are to increase up to 4% YoY, while aluminium output is to grow 3-10% YoY. Iron ore FOB unit cash costs are set to be USD 21.00-22.50/wmt (vs. USD 21.20/wmt in 1H23 and USD 21.30/wmt in FY22)
💰Management has declared an interim dividend of USD 1.77/sh (~3.2% DY), in line with the company's practice
📌On our numbers, at spot, Rio's 2H23F EBITDA will be materially higher HoH, amid the increase in iron ore output and the improvement in costs in the aluminium segment, as energy costs have decreased: thermal coal spot price is >30% lower than the 1H23 average
#RIO #Iron_ore
https://metals-wire.com/company/RIO_LN/
📝Rio Tinto's 1H23 revenues were slightly stronger than both consensus and our expectations (by 2% and 3%, respectively). Meanwhile, EBITDA came in below the forecasts (-3% vs. consensus and -5% vs. us), affected by higher costs in aluminium segment and a cost spike at Kennecott copper mine
⛏Rio has reiterated its FY23 guidance: iron ore shipments are to increase up to 4% YoY, while aluminium output is to grow 3-10% YoY. Iron ore FOB unit cash costs are set to be USD 21.00-22.50/wmt (vs. USD 21.20/wmt in 1H23 and USD 21.30/wmt in FY22)
💰Management has declared an interim dividend of USD 1.77/sh (~3.2% DY), in line with the company's practice
📌On our numbers, at spot, Rio's 2H23F EBITDA will be materially higher HoH, amid the increase in iron ore output and the improvement in costs in the aluminium segment, as energy costs have decreased: thermal coal spot price is >30% lower than the 1H23 average
#RIO #Iron_ore
https://metals-wire.com/company/RIO_LN/
Morning Bites (part 1)
🔗CISA mills' daily crude steel production during mid-July was 2.25mnt, a 0.3% increase from the previous ten days, and growth of over 10% YoY. In the meantime, local steel inventories declined 1.5% over the same period (-17.7% YoY). Despite the 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, Chinese steel output in 5mo23 was still up a slight 1.3% YoY, according to the WSA (World Steel Association). To recap, China’s government has signalled more stimulus for the domestic economy. Although there are no details yet, the potential measures might add some support to China’s stressed property segment, which is the main positive trigger for steel prices
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during mid-July was 2.25mnt, a 0.3% increase from the previous ten days, and growth of over 10% YoY. In the meantime, local steel inventories declined 1.5% over the same period (-17.7% YoY). Despite the 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, Chinese steel output in 5mo23 was still up a slight 1.3% YoY, according to the WSA (World Steel Association). To recap, China’s government has signalled more stimulus for the domestic economy. Although there are no details yet, the potential measures might add some support to China’s stressed property segment, which is the main positive trigger for steel prices
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
💎 India's gem and jewellery exports are set to drop 10-15% YoY in 2023, according to Vipul Shah, the chairman of GJEPC. In an interview, Mr Shah said that most of the concerns for the segment were related to the US (50% of world jewellery sales) and China (~15%), where demand is slowing. Meanwhile, rising interest rates and inflation also affect consumer confidence, the chairman added. Overall, during 1H23, exports dropped 21% YoY, while a 15% YoY loss in FY23 would mean an ~8% YoY decline in 2H23, on our numbers. To recap, India represents ~95% of world polished diamonds supply; thus, we reiterate our cautious view on the sector
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India's gem and jewellery exports are set to drop 10-15% YoY in 2023, according to Vipul Shah, the chairman of GJEPC. In an interview, Mr Shah said that most of the concerns for the segment were related to the US (50% of world jewellery sales) and China (~15%), where demand is slowing. Meanwhile, rising interest rates and inflation also affect consumer confidence, the chairman added. Overall, during 1H23, exports dropped 21% YoY, while a 15% YoY loss in FY23 would mean an ~8% YoY decline in 2H23, on our numbers. To recap, India represents ~95% of world polished diamonds supply; thus, we reiterate our cautious view on the sector
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
📈Russia’s gold output grew 9.5% YoY in June, decelerating from the 17.4% YoY jump in May, per Rosstat data. Despite the positive YoY dynamics seen recently, they were most likely a factor of the low base effect from 2022. Hence, we maintain our positive outlook on the yellow metal, amid continuously strong physical gold demand, the rising cash costs of gold miners, and the adverse macroeconomic conditions globally. Noteworthy, Russia accounts for ~9% of the world's mined gold output
#gold
https://metals-wire.com/sector/Gold
📈Russia’s gold output grew 9.5% YoY in June, decelerating from the 17.4% YoY jump in May, per Rosstat data. Despite the positive YoY dynamics seen recently, they were most likely a factor of the low base effect from 2022. Hence, we maintain our positive outlook on the yellow metal, amid continuously strong physical gold demand, the rising cash costs of gold miners, and the adverse macroeconomic conditions globally. Noteworthy, Russia accounts for ~9% of the world's mined gold output
#gold
https://metals-wire.com/sector/Gold
ArcelorMittal 2Q23 results - EBITDA beats forecasts
✏️ArcelorMittal's 2Q23 revenues were roughly in line with market estimates (but +8% vs. us), mainly amid higher realised prices in the NAFTA segment than we had expected. This also positively affected EBITDA, which exceeded our forecasts (+5% vs. the consensus and +11% vs. us).
🏭The steelmaker has cut its ex-China steel demand forecast, which it now sees gaining 1-2% YoY in 2023 (vs. 2-3% seen earlier).
💰The company has repurchased 24.8mn shares within the buyback (of up to 85mn shares) programme announced in May. The programme implies a yield of some 10.4% through the repurchase period (until May 2025). The BoD also approved a base dividend of USD 0.44/sh. for 2Q23, implying a 1.5% DY.
❗️Overall, at spot, Arcelor’s 2Q23 EBITDA are set to continue to recover QoQ, given the cost normalisation and potentially higher sales in the EU.
#MT #steel
https://metals-wire.com:3000/company/MT_US/
✏️ArcelorMittal's 2Q23 revenues were roughly in line with market estimates (but +8% vs. us), mainly amid higher realised prices in the NAFTA segment than we had expected. This also positively affected EBITDA, which exceeded our forecasts (+5% vs. the consensus and +11% vs. us).
🏭The steelmaker has cut its ex-China steel demand forecast, which it now sees gaining 1-2% YoY in 2023 (vs. 2-3% seen earlier).
💰The company has repurchased 24.8mn shares within the buyback (of up to 85mn shares) programme announced in May. The programme implies a yield of some 10.4% through the repurchase period (until May 2025). The BoD also approved a base dividend of USD 0.44/sh. for 2Q23, implying a 1.5% DY.
❗️Overall, at spot, Arcelor’s 2Q23 EBITDA are set to continue to recover QoQ, given the cost normalisation and potentially higher sales in the EU.
#MT #steel
https://metals-wire.com:3000/company/MT_US/
Teck 2Q23 results - slightly below estimates
📝The miner's 2Q23 revenues came in weaker than we had expected (-4% vs. the consensus and us), mostly amid lower realised prices in the copper segment, as well as lower zinc sales volumes. This also resulted in the miss on EBITDA (-5% vs. consensus and us)
⛏The miner has revised its FY23 guidance, amid delays in construction and the commissioning of the QB2 mine. Copper output in 2023 is now expected at 330-375kt (growth >20% YoY) vs. 390-445kt previously (>40% YoY)
💰The BoD has declared an interim dividend of CAD 0.125/share (~0.9% yield) for 2Q23
📌At spot, we expect Teck's 3Q23F EBITDA to show a moderate improvement QoQ, supported by a further ramp up in production at QB2
#TECK #copper
https://metals-wire.com/company/TECK_US/
📝The miner's 2Q23 revenues came in weaker than we had expected (-4% vs. the consensus and us), mostly amid lower realised prices in the copper segment, as well as lower zinc sales volumes. This also resulted in the miss on EBITDA (-5% vs. consensus and us)
⛏The miner has revised its FY23 guidance, amid delays in construction and the commissioning of the QB2 mine. Copper output in 2023 is now expected at 330-375kt (growth >20% YoY) vs. 390-445kt previously (>40% YoY)
💰The BoD has declared an interim dividend of CAD 0.125/share (~0.9% yield) for 2Q23
📌At spot, we expect Teck's 3Q23F EBITDA to show a moderate improvement QoQ, supported by a further ramp up in production at QB2
#TECK #copper
https://metals-wire.com/company/TECK_US/
Peabody Energy 2Q23 results - EBITDA underperformed
✏️Peabody's quarterly revenues have more or less met market expectations. However, EBITDA came in weaker than estimated (-10% vs. the consensus and -12% vs. us), mostly due to the lower proceeds from the Middlemount JV
❗️The miner has lowered its guidance for FY23: total coal sales are now expected at ~120mnst (-7% vs. the previous indications), particularly affecting the low-margin Powder River Basin shipments
💰In 2Q23, the company repurchased USD 173mn of ordinary shares within its buyback programme (up to USD 1bn, offering a ~30% yield through the period). The BoD has declared a quarterly cash dividend of USD 0.075/share, in line with the new policy, implying a DY of some 0.3%
📊At spot, the company’s 3Q23F EBITDA might be in the mid-single digits weaker QoQ, amid the recent declines in thermal coal prices
#BTU #coal
https://metals-wire.com:3000/company/BTU_US/
✏️Peabody's quarterly revenues have more or less met market expectations. However, EBITDA came in weaker than estimated (-10% vs. the consensus and -12% vs. us), mostly due to the lower proceeds from the Middlemount JV
❗️The miner has lowered its guidance for FY23: total coal sales are now expected at ~120mnst (-7% vs. the previous indications), particularly affecting the low-margin Powder River Basin shipments
💰In 2Q23, the company repurchased USD 173mn of ordinary shares within its buyback programme (up to USD 1bn, offering a ~30% yield through the period). The BoD has declared a quarterly cash dividend of USD 0.075/share, in line with the new policy, implying a DY of some 0.3%
📊At spot, the company’s 3Q23F EBITDA might be in the mid-single digits weaker QoQ, amid the recent declines in thermal coal prices
#BTU #coal
https://metals-wire.com:3000/company/BTU_US/
Morning Bites
🏗China’s preliminary excavator sales were down 26% YoY in July (domestic + export), vs. the 24% YoY decline in June, according to CME estimates. In particular, domestic sales (the leading indicator of construction activity) are set to be 49% lower YoY, following the 45% YoY drop in June. Meanwhile, the CCMA forecasts a drop of some 14% YoY in the country’s total 2023 excavator sales, which implies a ~17% YoY reduction in their local consumption in 2H23 (vs. -44% YoY in 1H23). Were this trend to persist, it would indicate no recovery in China's depressed real estate sector. However, Beijing has recently signalled new stimulus for the local economy. In our view, this might add support to construction activity and the demand for industrial metals (e.g. steel, copper and aluminium)
#steel
https://metals-wire.com/sector/Steel
🏗China’s preliminary excavator sales were down 26% YoY in July (domestic + export), vs. the 24% YoY decline in June, according to CME estimates. In particular, domestic sales (the leading indicator of construction activity) are set to be 49% lower YoY, following the 45% YoY drop in June. Meanwhile, the CCMA forecasts a drop of some 14% YoY in the country’s total 2023 excavator sales, which implies a ~17% YoY reduction in their local consumption in 2H23 (vs. -44% YoY in 1H23). Were this trend to persist, it would indicate no recovery in China's depressed real estate sector. However, Beijing has recently signalled new stimulus for the local economy. In our view, this might add support to construction activity and the demand for industrial metals (e.g. steel, copper and aluminium)
#steel
https://metals-wire.com/sector/Steel
Vale 2Q23 results - broadly in-line with expectations
📝Vale's revenues in 2Q23 were only slightly below market forecasts (-2% vs. the consensus and -3% vs. us). Meanwhile, EBITDA also came roughly in-line with expectations (+1% vs. the consensus and -2% vs. us)
⛏The miner has recently reiterated its FY23 outlook: iron ore production is set to grow 2% YoY; however, nickel output is to shrink 6% YoY, following depletion of the Ovoid mine and expansion delays
💰According to the company, it has reached two separate agreements to sell a 13% stake in its base metals department for USD 3.4bn
📌On our numbers, Vale's 3Q23F EBITDA will show a material growth QoQ, at spot, supported by seasonally higher iron ore sales and further ramp-up of the Salobo copper project
#VALE #Iron_ore
https://metals-wire.com/company/VALE_US/
📝Vale's revenues in 2Q23 were only slightly below market forecasts (-2% vs. the consensus and -3% vs. us). Meanwhile, EBITDA also came roughly in-line with expectations (+1% vs. the consensus and -2% vs. us)
⛏The miner has recently reiterated its FY23 outlook: iron ore production is set to grow 2% YoY; however, nickel output is to shrink 6% YoY, following depletion of the Ovoid mine and expansion delays
💰According to the company, it has reached two separate agreements to sell a 13% stake in its base metals department for USD 3.4bn
📌On our numbers, Vale's 3Q23F EBITDA will show a material growth QoQ, at spot, supported by seasonally higher iron ore sales and further ramp-up of the Salobo copper project
#VALE #Iron_ore
https://metals-wire.com/company/VALE_US/
US Steel 2Q23 results - moderately above consensus
✏️US Steel's 2Q23 revenues outperformed both the consensus and us (+2% and +10% respectively), following stronger realised prices than we had expected, which more than offset a decline in shipments. Consequently, EBITDA was 3% above the consensus and 5% higher than our estimates
📈The company’s EU segment EBITDA was positive for the first time since 2Q22, amid recovering shipment volumes after the drop in 2H22 (+17% QoQ, but -3% YoY) and cost normalisation. However, the steelmaker’s total shipments continued to decline YoY
💰The BoD has declared a quarterly cash dividend of USD 0.05/sh, which implies a modest 0.2% DY
❗️On our numbers, at spot, US Steel’s 3Q23 EBITDA will materially improve QoQ amid further cost normalisation: current EU electricity prices are >60% lower than the 2Q23 average
#X #steel
https://metals-wire.com:3000/company/X_US/
✏️US Steel's 2Q23 revenues outperformed both the consensus and us (+2% and +10% respectively), following stronger realised prices than we had expected, which more than offset a decline in shipments. Consequently, EBITDA was 3% above the consensus and 5% higher than our estimates
📈The company’s EU segment EBITDA was positive for the first time since 2Q22, amid recovering shipment volumes after the drop in 2H22 (+17% QoQ, but -3% YoY) and cost normalisation. However, the steelmaker’s total shipments continued to decline YoY
💰The BoD has declared a quarterly cash dividend of USD 0.05/sh, which implies a modest 0.2% DY
❗️On our numbers, at spot, US Steel’s 3Q23 EBITDA will materially improve QoQ amid further cost normalisation: current EU electricity prices are >60% lower than the 2Q23 average
#X #steel
https://metals-wire.com:3000/company/X_US/