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
https://metals-wire.com:3000/news-reports
🚘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
https://metals-wire.com:3000/news-reports
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
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🇿🇦South Africa’s PGM mining output rose 3% YoY in August, vs. the -10% YoY in July, according to government data. Meanwhile, the country’s gold production inched up 1% YoY, vs. the 28% YoY growth in July. Although PGM/gold output recovered negligibly, South Africa's mining activity is still dampened by the country's ongoing energy crisis and logistical issues. Overall, we see the sentiment on the PGMs market as remaining heavily stressed by subdued demand from the auto sector. To recap, SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of global gold production
#PGMs #gold
https://metals-wire.com:3000/news-reports
🇿🇦South Africa’s PGM mining output rose 3% YoY in August, vs. the -10% YoY in July, according to government data. Meanwhile, the country’s gold production inched up 1% YoY, vs. the 28% YoY growth in July. Although PGM/gold output recovered negligibly, South Africa's mining activity is still dampened by the country's ongoing energy crisis and logistical issues. Overall, we see the sentiment on the PGMs market as remaining heavily stressed by subdued demand from the auto sector. To recap, SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of global gold production
#PGMs #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
💍 Chow Tai Fook’s 3Q23 LFL sales dropped 21% YoY in the gem-set, platinum and K-gold jewellery segment (vs. +1% YoY in 2Q23), the company has reported. Meanwhile, the sales were ~36% below pre-pandemic 2019 levels, while the slight increase in 2Q23 was mostly due to the low base effect (-30% vs. 2Q19), on our numbers. Particularly, sales in the gem-set segment in Mainland China were down 28% YoY (vs. -4% YoY in 2Q23), while HK and Macau sales fell 4% YoY, after the 17% YoY growth in the previous quarter. Overall, given weak data from the main gem-set jewellery trading hubs (the US and China, which jointly represent ~65% of the global polished stones demand) we maintain our cautious view on the diamond sector, that is still heavily stressed by the adverse macroeconomic conditions globally
#diamonds
https://metals-wire.com/sector/Diamonds
💍 Chow Tai Fook’s 3Q23 LFL sales dropped 21% YoY in the gem-set, platinum and K-gold jewellery segment (vs. +1% YoY in 2Q23), the company has reported. Meanwhile, the sales were ~36% below pre-pandemic 2019 levels, while the slight increase in 2Q23 was mostly due to the low base effect (-30% vs. 2Q19), on our numbers. Particularly, sales in the gem-set segment in Mainland China were down 28% YoY (vs. -4% YoY in 2Q23), while HK and Macau sales fell 4% YoY, after the 17% YoY growth in the previous quarter. Overall, given weak data from the main gem-set jewellery trading hubs (the US and China, which jointly represent ~65% of the global polished stones demand) we maintain our cautious view on the diamond sector, that is still heavily stressed by the adverse macroeconomic conditions globally
#diamonds
https://metals-wire.com/sector/Diamonds
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, several major M&M names are due to release their 3Q23 financial results. Regarding Freeport and JSW Steel, our EBITDA forecasts are more conservative vs. the consensus
We also await for the official production data from China and the EU car sales statistics
#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, several major M&M names are due to release their 3Q23 financial results. Regarding Freeport and JSW Steel, our EBITDA forecasts are more conservative vs. the consensus
We also await for the official production data from China and the EU car sales statistics
#reporting_season
https://metals-wire.com:3000/events
Morning Bites (part 1)
📌China’s new internal combustion engine car sales rose 3% YoY in September, following the 1% YoY increase in August. However, the numbers remained below their pre-Covid level (-11% vs. September 2019), amid the growing appetite for EVs, which continue to weigh on PGM consumption. ICE car sales were also down 1% YoY in 9mo23 and -15% vs. 9mo19. The Chinese auto sector represents some 26% and 17% of the world’s autocatalyst Pd and Pt demand, respectively
📌New EV sales in China jumped 28% YoY in September, after the 27% YoY increase in August. Meanwhile, in 9mo23, EV sales grew 38% YoY. Overall, the continuous growth in EV sales might further drive up the consumption of the battery metals basket (e.g. cobalt, lithium and nickel), as China has accounted for ~50% of global EV demand in recent months
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
📌China’s new internal combustion engine car sales rose 3% YoY in September, following the 1% YoY increase in August. However, the numbers remained below their pre-Covid level (-11% vs. September 2019), amid the growing appetite for EVs, which continue to weigh on PGM consumption. ICE car sales were also down 1% YoY in 9mo23 and -15% vs. 9mo19. The Chinese auto sector represents some 26% and 17% of the world’s autocatalyst Pd and Pt demand, respectively
📌New EV sales in China jumped 28% YoY in September, after the 27% YoY increase in August. Meanwhile, in 9mo23, EV sales grew 38% YoY. Overall, the continuous growth in EV sales might further drive up the consumption of the battery metals basket (e.g. cobalt, lithium and nickel), as China has accounted for ~50% of global EV demand in recent months
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🏦China’s aggregate financing rose 16% YoY in September to CNY 4.12tn (vs. +26% YoY in August) -- ahead of the CNY 3.80tn consensus estimate. Meanwhile, traditional bank loans declined 7% YoY (vs. +9% YoY in August), being 8% below the consensus. According to Trading Economics, the overall dynamics shifted to positive following the central bank's (PBoC) efforts to bolster economic growth (which is also indicated by China’s PMIs >50.0 in September). In our view, new economic stimulus, in the form of higher government spending, aimed at infrastructure investment, might add support to local construction activity, and hence, China’s demand for industrial metals in late 2023-2024
To recap, China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#global
https://metals-wire.com:3000/news-reports
🏦China’s aggregate financing rose 16% YoY in September to CNY 4.12tn (vs. +26% YoY in August) -- ahead of the CNY 3.80tn consensus estimate. Meanwhile, traditional bank loans declined 7% YoY (vs. +9% YoY in August), being 8% below the consensus. According to Trading Economics, the overall dynamics shifted to positive following the central bank's (PBoC) efforts to bolster economic growth (which is also indicated by China’s PMIs >50.0 in September). In our view, new economic stimulus, in the form of higher government spending, aimed at infrastructure investment, might add support to local construction activity, and hence, China’s demand for industrial metals in late 2023-2024
To recap, China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#global
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🔗CISA mills' daily crude steel production during early October was 2.08mnt, a 0.8% growth from the previous ten days (but a 1.2% decline YoY). Meanwhile, local steel inventories grew 7.3% over the same period (+0.3% YoY). Although the output declined for the 3rd consecutive 10-day period, Chinese steel production on a YTD basis was still +2.7% YoY, per CISA data. Hence, considering Beijing’s intention to cap national steel output below the 2022 levels, we might see tighter supply later in 4Q23. In our view, more production restrictions materialising would be supportive for steel prices. To recap, China represents ~57% of global steel output
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during early October was 2.08mnt, a 0.8% growth from the previous ten days (but a 1.2% decline YoY). Meanwhile, local steel inventories grew 7.3% over the same period (+0.3% YoY). Although the output declined for the 3rd consecutive 10-day period, Chinese steel production on a YTD basis was still +2.7% YoY, per CISA data. Hence, considering Beijing’s intention to cap national steel output below the 2022 levels, we might see tighter supply later in 4Q23. In our view, more production restrictions materialising would be supportive for steel prices. To recap, China represents ~57% of global steel output
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🏗China’s excavator sales dropped 33% YoY in September (domestic + export), after the 28% YoY fall in August. The decline was more dramatic than the preliminary estimates of -25% YoY, mostly amid lower export sales. Furthermore, CCMA sales expectations of -14% YoY in FY23 look overly bullish to us, given the fall of 26% in 9mo23. Specifically, domestic excavator sales — a key indicator of construction activity — were down 40% YoY in September (vs. -38% YoY in August). Hence, continuously weak sales dynamics underpin the stagnation in China’s property sector, which might further weigh on demand for industrial metals. To recap, China accounts for 52% of global steel consumption, as well as 55% and 58% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
🏗China’s excavator sales dropped 33% YoY in September (domestic + export), after the 28% YoY fall in August. The decline was more dramatic than the preliminary estimates of -25% YoY, mostly amid lower export sales. Furthermore, CCMA sales expectations of -14% YoY in FY23 look overly bullish to us, given the fall of 26% in 9mo23. Specifically, domestic excavator sales — a key indicator of construction activity — were down 40% YoY in September (vs. -38% YoY in August). Hence, continuously weak sales dynamics underpin the stagnation in China’s property sector, which might further weigh on demand for industrial metals. To recap, China accounts for 52% of global steel consumption, as well as 55% and 58% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
🗞Today, China has published its industrial production data for September (see table above)
#statistics #China
https://metals-wire.com:3000/news-reports
#statistics #China
https://metals-wire.com:3000/news-reports
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