Morning Bites
📈Russia’s gold output declined 3.6% YoY in August, decelerating from the 12.3% YoY drop in July, per Rosstat data. Despite two consecutive months of falls, output was up 3.8% YoY on 8mo23 basis. Russia accounts for ~9% of the world's mined gold output. Overall, the gold miners' cost pressure remains tight, while the global macroeconomic environment is still unfavourable. Hence, we maintain our positive outlook on the yellow metal's future performance
#gold
https://metals-wire.com/sector/Gold
📈Russia’s gold output declined 3.6% YoY in August, decelerating from the 12.3% YoY drop in July, per Rosstat data. Despite two consecutive months of falls, output was up 3.8% YoY on 8mo23 basis. Russia accounts for ~9% of the world's mined gold output. Overall, the gold miners' cost pressure remains tight, while the global macroeconomic environment is still unfavourable. Hence, we maintain our positive outlook on the yellow metal's future performance
#gold
https://metals-wire.com/sector/Gold
Morning Bites
🏗China’s preliminary excavator sales were down 25% YoY in September (domestic + export), following the 28% YoY decline in August, according to CME estimates. Specifically, domestic sales (a key indicator of construction activity) are set to be 38% weaker YoY, after the 42% YoY drop in August. Overall, in our view, the continuously weak excavator sales imply that China’s property sector is unlikely to recover in the short term, which might keep weighing on the demand for industrial metals. However, any new potential stimulus for the local economy might add support to construction activity and bolster the demand for industrial metals (e.g. steel, copper and aluminium) later in 2H23-2024. We remind our readers that China represents 52% of global steel consumption
#steel
https://metals-wire.com/sector/Steel
🏗China’s preliminary excavator sales were down 25% YoY in September (domestic + export), following the 28% YoY decline in August, according to CME estimates. Specifically, domestic sales (a key indicator of construction activity) are set to be 38% weaker YoY, after the 42% YoY drop in August. Overall, in our view, the continuously weak excavator sales imply that China’s property sector is unlikely to recover in the short term, which might keep weighing on the demand for industrial metals. However, any new potential stimulus for the local economy might add support to construction activity and bolster the demand for industrial metals (e.g. steel, copper and aluminium) later in 2H23-2024. We remind our readers that China represents 52% of global steel consumption
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 1)
💍Hong Kong jewellery and watch sales rose 57% YoY in August, following the 21% YoY increase in July, according to the government data. To recap, the robust recovery trend began after HK’s border with the Mainland reopened in early 2023 (in August, 4.1mn visitors arrived in HK vs. <60k a year ago). Sales have also outpaced pre-Covid 2019 levels by 31%. However, sentiment remains subdued in the key US and China diamond markets (~53% and ~12% of the world's gem-set jewellery trade, respectively). Hence, given the adverse economic conditions globally, as well as the warning signals from miners and the midstream, we reiterate our cautious view on the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales rose 57% YoY in August, following the 21% YoY increase in July, according to the government data. To recap, the robust recovery trend began after HK’s border with the Mainland reopened in early 2023 (in August, 4.1mn visitors arrived in HK vs. <60k a year ago). Sales have also outpaced pre-Covid 2019 levels by 31%. However, sentiment remains subdued in the key US and China diamond markets (~53% and ~12% of the world's gem-set jewellery trade, respectively). Hence, given the adverse economic conditions globally, as well as the warning signals from miners and the midstream, we reiterate our cautious view on the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🇨🇱Chile’s copper production increased 3% YoY in August, after the 1% YoY rise in July, remaining near historical lows. We note that Chile's mining industry has been affected by a persistent drought and unfavourable structural effects (e.g. grade depletion). Furthermore, a possible strike at the world’s largest mine, Escondida (~5% of global Cu production in 2022), would likely pile additional pressure onto the country’s supply. To recap, Chile represents ~27% of world copper output and so if the adverse factors in its mining sector persist, they could at least partially offset the supply additions from new Cu projects (e.g. QB2 and Udokan), which are due to launch in 2023
#copper
https://metals-wire.com:3000/sector/Copper
🇨🇱Chile’s copper production increased 3% YoY in August, after the 1% YoY rise in July, remaining near historical lows. We note that Chile's mining industry has been affected by a persistent drought and unfavourable structural effects (e.g. grade depletion). Furthermore, a possible strike at the world’s largest mine, Escondida (~5% of global Cu production in 2022), would likely pile additional pressure onto the country’s supply. To recap, Chile represents ~27% of world copper output and so if the adverse factors in its mining sector persist, they could at least partially offset the supply additions from new Cu projects (e.g. QB2 and Udokan), which are due to launch in 2023
#copper
https://metals-wire.com:3000/sector/Copper
Morning Bites (part 1)
🌏Global manufacturing PMIs showed mixed dynamics in September. The Eurozone Markit Manufacturing PMI was reported at 43.4 (in line with estimates), vs. 43.5 in August. The US ISM manufacturing PMI rose for the third consecutive month, to 49.0 (from 47.6 in August)
🇨🇳The official NBS Manufacturing PMI in China rose to 50.2 in September (from 49.7 in August), ahead of the 50.0 estimates. However, the Caixin China Manufacturing PMI declined to 50.6 in September (from 51.0), missing the estimates of 51.2
❗️Although some of the global PMIs recovered slightly in September, they mostly remained below 50.0, which might weigh further on the manufacturing sector. Meanwhile, any new potential stimulus for the Chinese economy might bolster its construction activity and, hence, the demand for industrial metals (e.g. steel, copper and aluminium) later in 2H23-2024
#PMIs
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🌏Global manufacturing PMIs showed mixed dynamics in September. The Eurozone Markit Manufacturing PMI was reported at 43.4 (in line with estimates), vs. 43.5 in August. The US ISM manufacturing PMI rose for the third consecutive month, to 49.0 (from 47.6 in August)
🇨🇳The official NBS Manufacturing PMI in China rose to 50.2 in September (from 49.7 in August), ahead of the 50.0 estimates. However, the Caixin China Manufacturing PMI declined to 50.6 in September (from 51.0), missing the estimates of 51.2
❗️Although some of the global PMIs recovered slightly in September, they mostly remained below 50.0, which might weigh further on the manufacturing sector. Meanwhile, any new potential stimulus for the Chinese economy might bolster its construction activity and, hence, the demand for industrial metals (e.g. steel, copper and aluminium) later in 2H23-2024
#PMIs
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Morning Bites (part 2)
🇵🇪Peru’s copper output rose 7% YoY in August, decelerating from the +18% YoY in July and 22% YoY in June, INEI reports. Overall, in 8mo23, local production grew ~17% YoY, which was still above the Peruvian government's ambitious plan to boost domestic Cu output 15% YoY in 2023. Meanwhile, joint production of Chile and Peru (~38% of global Cu supply) was only up 4% YoY. Moreover, Anglo American launched the Quellaveco copper mine in September 2022, making the comparison base for rest of the year higher. Peru accounts for ~11% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
🇵🇪Peru’s copper output rose 7% YoY in August, decelerating from the +18% YoY in July and 22% YoY in June, INEI reports. Overall, in 8mo23, local production grew ~17% YoY, which was still above the Peruvian government's ambitious plan to boost domestic Cu output 15% YoY in 2023. Meanwhile, joint production of Chile and Peru (~38% of global Cu supply) was only up 4% YoY. Moreover, Anglo American launched the Quellaveco copper mine in September 2022, making the comparison base for rest of the year higher. Peru accounts for ~11% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
Morning Bites
💎US jewellery sales shrank 3% YoY in August, vs. the revised 4% YoY drop in July, IDEX reports, citing the US Department of Commerce. This marked the 11th month of consecutive YoY drops since October 2022 (ex. January 2023, with the revised +2% YoY). Although the country’s inflation has slowed in recent months, consumer sentiment remains cautious, which is likely to keep weighing on diamond consumption, at least in the near future. Hence, we reiterate our view that the unfavourable macroeconomic environment globally and the ongoing decline in US sales (~53% of world gem-set jewellery trade) might further stress the demand for rough diamonds
#diamonds
https://metals-wire.com/sector/Diamonds
💎US jewellery sales shrank 3% YoY in August, vs. the revised 4% YoY drop in July, IDEX reports, citing the US Department of Commerce. This marked the 11th month of consecutive YoY drops since October 2022 (ex. January 2023, with the revised +2% YoY). Although the country’s inflation has slowed in recent months, consumer sentiment remains cautious, which is likely to keep weighing on diamond consumption, at least in the near future. Hence, we reiterate our view that the unfavourable macroeconomic environment globally and the ongoing decline in US sales (~53% of world gem-set jewellery trade) might further stress the demand for rough diamonds
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
💎De Beers has reported sales of USD 200mn at its 8th cycle in 2023, 60% below the historical average and 61% weaker YoY (vs. -42% YoY at the 7th cycle in 2023). According to De Beers CEO Al Cook, the company has reduced the availability of its rough stones following high midstream stockpiles. The miner has also suspended its online auctions until the end of 2023, in addition to the option for sightholders to defer rough purchases (up to 25-50% of their allocations) at cycles 8-10, amid sluggish consumer demand
📌The supply discipline measures taken by De Beers and Alrosa (which jointly accounted for 59% of the global rough diamonds output in 2022) could help to eliminate excessive midstream inventories in the medium term, we believe. However, in the short term, we keep our cautious view on the diamond sector, amid the unfavourable macroeconomic environment globally and weak US sales (~53% of the world's gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 200mn at its 8th cycle in 2023, 60% below the historical average and 61% weaker YoY (vs. -42% YoY at the 7th cycle in 2023). According to De Beers CEO Al Cook, the company has reduced the availability of its rough stones following high midstream stockpiles. The miner has also suspended its online auctions until the end of 2023, in addition to the option for sightholders to defer rough purchases (up to 25-50% of their allocations) at cycles 8-10, amid sluggish consumer demand
📌The supply discipline measures taken by De Beers and Alrosa (which jointly accounted for 59% of the global rough diamonds output in 2022) could help to eliminate excessive midstream inventories in the medium term, we believe. However, in the short term, we keep our cautious view on the diamond sector, amid the unfavourable macroeconomic environment globally and weak US sales (~53% of the world's gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🏦 Global central banks purchased 77t of gold in August, vs. the revised +49t in July, marking the 3rd consecutive increase in holdings, the World Gold Council (WGC) reports. The main contributors were China (+29t), Uzbekistan (+9t), Poland and Turkey (+15t both). We note that there were no material volumes on the sellers' side, which also demonstrates strong gold demand from CBs. Overall, the adverse macroeconomic conditions globally and the growing cash costs of miners are likely to provide further support for the yellow metal's performance, we believe
#gold
https://metals-wire.com/sector/Gold
🏦 Global central banks purchased 77t of gold in August, vs. the revised +49t in July, marking the 3rd consecutive increase in holdings, the World Gold Council (WGC) reports. The main contributors were China (+29t), Uzbekistan (+9t), Poland and Turkey (+15t both). We note that there were no material volumes on the sellers' side, which also demonstrates strong gold demand from CBs. Overall, the adverse macroeconomic conditions globally and the growing cash costs of miners are likely to provide further support for the yellow metal's performance, we believe
#gold
https://metals-wire.com/sector/Gold
Morning Bites
🚘US light vehicle sales rose 17% YoY in September, vs. the 16% YoY growth in August. The number was also 4% above the pre-Covid 2019 level. Seasonally adjusted sales volumes also grew 14% YoY last month (-9% vs. 2019). According to Reuters, US car sales climbed last month despite the auto workers strike and the worsening affordability of new car loans. Despite the positive dynamics in September, we believe that the above factors might weigh on car sales in the US, at least in the near future. North America accounted for ~22% and 16% of the world autocatalyst Pd and Pt consumption, respectively, in 2022
#cars
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🚘US light vehicle sales rose 17% YoY in September, vs. the 16% YoY growth in August. The number was also 4% above the pre-Covid 2019 level. Seasonally adjusted sales volumes also grew 14% YoY last month (-9% vs. 2019). According to Reuters, US car sales climbed last month despite the auto workers strike and the worsening affordability of new car loans. Despite the positive dynamics in September, we believe that the above factors might weigh on car sales in the US, at least in the near future. North America accounted for ~22% and 16% of the world autocatalyst Pd and Pt consumption, respectively, in 2022
#cars
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Morning Bites (part 1)
💎 Petra Diamond’s LFL rough prices at its October auction fell 16-18% vs. August, according to a company press release. Despite the negative dynamics, the miner expects prices to recover in the medium to longer term, supported by India’s two-month import suspension (~95% of the world’s polished stones supply). In addition, the supply discipline measures taken by De Beers and Alrosa (which jointly accounted for ~60% of the global rough diamonds output in 2022) could help to normalise midstream inventories in the medium term, we believe. However, in the short term, demand is unlikely to recover: we keep our cautious view on the diamond market, following the adverse macroeconomic environment globally and persistently weak US sales (53% of the world's gem-set jewellery trade in 2022)
#diamonds
https://metals-wire.com/sector/Diamonds
💎 Petra Diamond’s LFL rough prices at its October auction fell 16-18% vs. August, according to a company press release. Despite the negative dynamics, the miner expects prices to recover in the medium to longer term, supported by India’s two-month import suspension (~95% of the world’s polished stones supply). In addition, the supply discipline measures taken by De Beers and Alrosa (which jointly accounted for ~60% of the global rough diamonds output in 2022) could help to normalise midstream inventories in the medium term, we believe. However, in the short term, demand is unlikely to recover: we keep our cautious view on the diamond market, following the adverse macroeconomic environment globally and persistently weak US sales (53% of the world's gem-set jewellery trade in 2022)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 12% YoY in September, vs. the +20% YoY in August. However, the figure was still 13% below the (2019) pre-COVID level. In Germany and Spain, car sales were down 8% and 16%, respectively, vs. the 2019 level, while registrations in France were 10% lower. Meanwhile, sales in the UK and Italy were 21% and 4% below the 2019 figures, respectively. Given that these five countries represent ~70% of new vehicle registrations in Europe, the region’s car sales have likely followed the recovery trend, 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 12% YoY in September, vs. the +20% YoY in August. However, the figure was still 13% below the (2019) pre-COVID level. In Germany and Spain, car sales were down 8% and 16%, respectively, vs. the 2019 level, while registrations in France were 10% lower. Meanwhile, sales in the UK and Italy were 21% and 4% below the 2019 figures, respectively. Given that these five countries represent ~70% of new vehicle registrations in Europe, the region’s car sales have likely followed the recovery trend, while remaining below their pre-pandemic levels
#cars
https://metals-wire.com:3000/sector/PGM
Morning Bites
🥉Global mined copper output is set to grow 1.9% YoY in 2023 and 3.7% YoY in 2024, following the 1.8% YoY increase in 7mo23, the International Copper Study Group (ICSG) reports. The outlook has been revised from April's initial expectations of a 3.0% YoY gain in 2023, following technical and equipment issues, unfavourable weather conditions and the slower than expected ramp-up of new capacities, among other factors. Simultaneously, global refined copper production is forecasted to grow 3.8% YoY and 4.6% YoY in 2023 and 2024, respectively. Overall, the ICSG sees a Cu market deficit of 27kt in 2023 and a 467kt surplus in 2024, amid the upcoming supply additions. The figures are broadly in line with us: we expect a mild deficit in 2023 (as the launch of new renewables capacities in China is ahead of plan) with the consequent return to surplus in 2024
#copper
https://metals-wire.com/sector/Copper
🥉Global mined copper output is set to grow 1.9% YoY in 2023 and 3.7% YoY in 2024, following the 1.8% YoY increase in 7mo23, the International Copper Study Group (ICSG) reports. The outlook has been revised from April's initial expectations of a 3.0% YoY gain in 2023, following technical and equipment issues, unfavourable weather conditions and the slower than expected ramp-up of new capacities, among other factors. Simultaneously, global refined copper production is forecasted to grow 3.8% YoY and 4.6% YoY in 2023 and 2024, respectively. Overall, the ICSG sees a Cu market deficit of 27kt in 2023 and a 467kt surplus in 2024, amid the upcoming supply additions. The figures are broadly in line with us: we expect a mild deficit in 2023 (as the launch of new renewables capacities in China is ahead of plan) with the consequent return to surplus in 2024
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
🔗CISA mills' daily crude steel production during late-September was 2.07mnt, a 3.2% decline from the previous ten days (also -3.1% YoY). Meanwhile, local steel inventories also shrank 3.2% over the period (-4.0% YoY). According to CISA data, in 9mo23, Chinese production remained firm (still +2.9% YoY), despite Beijing’s stated intention to cap national steel output below the 2022 levels. In our view, this might trigger more production restrictions later in 2H23 and, therefore, bolster steel prices. To recap, China represents ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during late-September was 2.07mnt, a 3.2% decline from the previous ten days (also -3.1% YoY). Meanwhile, local steel inventories also shrank 3.2% over the period (-4.0% YoY). According to CISA data, in 9mo23, Chinese production remained firm (still +2.9% YoY), despite Beijing’s stated intention to cap national steel output below the 2022 levels. In our view, this might trigger more production restrictions later in 2H23 and, therefore, bolster steel prices. To recap, China represents ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
💍LVMH has reported a 3% YoY gain in the organic sales of watches and jewellery in 3Q23, vs. the 14% YoY growth in 2Q23. On a 9mo23 basis, proceeds from the segment were also up 9% YoY, supported by store chain expansion and new collections releases, according to the company's report. However, we note that the positive dynamics have materially decelerated in 3Q23, likely amid adverse economic conditions globally and subdued sales in the main trading hubs (the US and China, which jointly represent ~65% of the world's polished diamonds demand). Hence, we maintain our cautious view on the diamond sector, which is likely to stay stressed, at least in the near future
#diamonds
https://metals-wire.com/sector/Diamonds
💍LVMH has reported a 3% YoY gain in the organic sales of watches and jewellery in 3Q23, vs. the 14% YoY growth in 2Q23. On a 9mo23 basis, proceeds from the segment were also up 9% YoY, supported by store chain expansion and new collections releases, according to the company's report. However, we note that the positive dynamics have materially decelerated in 3Q23, likely amid adverse economic conditions globally and subdued sales in the main trading hubs (the US and China, which jointly represent ~65% of the world's polished diamonds demand). Hence, we maintain our cautious view on the diamond sector, which is likely to stay stressed, at least in the near future
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
📉Gold-backed ETFs reduced their holdings 59t in September, vs. the -46t in August, according to the World Gold Council (WGC). The figure accounted for ~15% of annualised global physical gold demand in 2022, marking 4th consecutive month of declines. Specifically, in September, North American funds sold 35t, while net outflows from the EU were 28t, with only 5t of net purchases seen in Asia. Overall, global ETF holdings have contracted 189t so far in 2023 (~5% of annualised gold demand). We reiterate our view that ETF sales remain one of the key factors pressuring gold prices, amid persistently strong demand from central banks and rising cash costs of gold miners
#ETF #gold
https://metals-wire.com:3000/sector/Gold
📉Gold-backed ETFs reduced their holdings 59t in September, vs. the -46t in August, according to the World Gold Council (WGC). The figure accounted for ~15% of annualised global physical gold demand in 2022, marking 4th consecutive month of declines. Specifically, in September, North American funds sold 35t, while net outflows from the EU were 28t, with only 5t of net purchases seen in Asia. Overall, global ETF holdings have contracted 189t so far in 2023 (~5% of annualised gold demand). We reiterate our view that ETF sales remain one of the key factors pressuring gold prices, amid persistently strong demand from central banks and rising cash costs of gold miners
#ETF #gold
https://metals-wire.com:3000/sector/Gold
Morning Bites
🏦China continued to accumulate gold reserves in September, purchasing 27t (~7% of annualised physical gold demand in 2022), which marked the 11th consecutive month of additions, Bloomberg reports. Hence, PBoC gold holdings now stand at 2,191t, with ~243t added since November 2022. Of note, in annualised terms, the country’s November 2022 - September 2023 purchases accounted for ~6% of the world’s physical gold demand in 2022. Overall, given miners’ rising cash costs, persistently strong demand from global central banks and potentially lower US Fed funds rate in 1H24, we maintain our bullish view on gold performance
#gold
https://metals-wire.com/sector/Gold
🏦China continued to accumulate gold reserves in September, purchasing 27t (~7% of annualised physical gold demand in 2022), which marked the 11th consecutive month of additions, Bloomberg reports. Hence, PBoC gold holdings now stand at 2,191t, with ~243t added since November 2022. Of note, in annualised terms, the country’s November 2022 - September 2023 purchases accounted for ~6% of the world’s physical gold demand in 2022. Overall, given miners’ rising cash costs, persistently strong demand from global central banks and potentially lower US Fed funds rate in 1H24, we maintain our bullish view on gold performance
#gold
https://metals-wire.com/sector/Gold
🗞Today, China published its preliminary import/export statistics for September (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 jumped 81% YoY in September, following the 45% YoY increase in August. Meanwhile, we note that China’s production remains elevated (+3% YoY in 9mo23), despite Beijing’s stated intention to cap steel output at the 2022 levels. In addition, per Mysteel estimates, only ~33% of Chinese steel mills were operating at a profit by the end-September (vs. ~50% in late-August). This might trigger more production restrictions later in 2H23 and, therefore, support steel prices, we believe
🪨China’s coal imports surged 28% YoY in September (vs. +51% YoY in August). The import growth has continued (+73% YoY in 9mo23), bolstered by higher industrial usage, seasonal restocking and tightened domestic supply amid mine safety inspections in China, Reuters reports. To recap, China accounted for 53% of global coal demand in 2022E, according to the IEA estimates
#coal #steel
https://metals-wire.com:3000/news-reports
🔗China’s net finished steel exports jumped 81% YoY in September, following the 45% YoY increase in August. Meanwhile, we note that China’s production remains elevated (+3% YoY in 9mo23), despite Beijing’s stated intention to cap steel output at the 2022 levels. In addition, per Mysteel estimates, only ~33% of Chinese steel mills were operating at a profit by the end-September (vs. ~50% in late-August). This might trigger more production restrictions later in 2H23 and, therefore, support steel prices, we believe
🪨China’s coal imports surged 28% YoY in September (vs. +51% YoY in August). The import growth has continued (+73% YoY in 9mo23), bolstered by higher industrial usage, seasonal restocking and tightened domestic supply amid mine safety inspections in China, Reuters reports. To recap, China accounted for 53% of global coal demand in 2022E, according to the IEA estimates
#coal #steel
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