Morning Bites (part 1)
⛏PGM miner Sibanye-Stillwater is to cut jobs at its Americas operations, Reuters reports. Overall, this continues a series of recent job cuts in favour of cost reduction among major PGM miners. Sibanye has said that although its US operations have recovered from the stoppage after the recent accident, cost pressures remained elevated. As a result, the company is to release 100 employees. It also plans to shed 187 contract workers (~70% of its current non-essential mining contract workforce). The company noted that the restructuring would not significantly affect 2E output. Overall, the series of job cuts among PGM miners indicates that the supply side has started to react to consistently weak prices: palladium has fallen >40% YTD, while the platinum price has declined >10% YTD from already subdued levels. Meanwhile, adverse economic conditions are pressuring automotive demand for PGMs. We therefore believe that the supply cuts might continue
#PGMs
https://metals-wire.com/news-reports
⛏PGM miner Sibanye-Stillwater is to cut jobs at its Americas operations, Reuters reports. Overall, this continues a series of recent job cuts in favour of cost reduction among major PGM miners. Sibanye has said that although its US operations have recovered from the stoppage after the recent accident, cost pressures remained elevated. As a result, the company is to release 100 employees. It also plans to shed 187 contract workers (~70% of its current non-essential mining contract workforce). The company noted that the restructuring would not significantly affect 2E output. Overall, the series of job cuts among PGM miners indicates that the supply side has started to react to consistently weak prices: palladium has fallen >40% YTD, while the platinum price has declined >10% YTD from already subdued levels. Meanwhile, adverse economic conditions are pressuring automotive demand for PGMs. We therefore believe that the supply cuts might continue
#PGMs
https://metals-wire.com/news-reports
Morning Bites (part 2)
💍China’s jewellery and watch retail sales surged 45% YoY in October, accelerating from the 30% YoY rise in September. However, this was mostly due to the low base effect (October 2022 was the second weakest month last year, while the October 2023 results were 2% below the 2021 levels). Overall, given the persistently high inflation and weak sentiment on the major consumer markets (the US and China account for 53% and 12% of global gem-set jewellery trade, respectively), we keep our cautious view on the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
💍China’s jewellery and watch retail sales surged 45% YoY in October, accelerating from the 30% YoY rise in September. However, this was mostly due to the low base effect (October 2022 was the second weakest month last year, while the October 2023 results were 2% below the 2021 levels). Overall, given the persistently high inflation and weak sentiment on the major consumer markets (the US and China account for 53% and 12% of global gem-set jewellery trade, respectively), we keep our cautious view on the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
🌏Global manufacturing PMIs were broadly weak in November. The Eurozone Markit Manufacturing PMI was 44.2 (vs. consensus estimates of 43.8), a slight increase from October's 43.1. The US ISM manufacturing PMI was unchanged MoM at 46.7
🇨🇳The official NBS Manufacturing PMI in China slightly fell to 49.4 in November (49.5 in October), below 49.7 estimates. However, the Caixin China Manufacturing PMI recovered to 50.7 in November (from 49.5), beating the consensus estimates of 49.8
❗️Overall global PMIs remained below 50.0, which might weigh further on the manufacturing sector. However, Beijing's efforts to bolster the local economy via the property sector might support the country’s construction activity and, therefore, the demand for industrial metals (e.g. steel, copper and aluminium) in 2024
#PMIs
https://metals-wire.com:3000/news-reports
🌏Global manufacturing PMIs were broadly weak in November. The Eurozone Markit Manufacturing PMI was 44.2 (vs. consensus estimates of 43.8), a slight increase from October's 43.1. The US ISM manufacturing PMI was unchanged MoM at 46.7
🇨🇳The official NBS Manufacturing PMI in China slightly fell to 49.4 in November (49.5 in October), below 49.7 estimates. However, the Caixin China Manufacturing PMI recovered to 50.7 in November (from 49.5), beating the consensus estimates of 49.8
❗️Overall global PMIs remained below 50.0, which might weigh further on the manufacturing sector. However, Beijing's efforts to bolster the local economy via the property sector might support the country’s construction activity and, therefore, the demand for industrial metals (e.g. steel, copper and aluminium) in 2024
#PMIs
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🇨🇱Chile’s copper production fell 4% YoY in October, reversing from the 4% YoY increase in September, remaining near historical lows. Meanwhile, in 10mo23, output was down 2% YoY. We note that the persistent drought and unfavourable structural effects (e.g. grade depletion) continue to pressure Chile's mining industry. Chile represents ~27% of the world’s mined copper output, and if the adverse factors in its mining sector persist, in addition to the ongoing supply disruptions at a major mine in Panama, that could at least partially offset the supply additions from new Cu projects (e.g. QB2 and Udokan), which are due to ramp up in the near future
#copper
https://metals-wire.com:3000/sector/Copper
🇨🇱Chile’s copper production fell 4% YoY in October, reversing from the 4% YoY increase in September, remaining near historical lows. Meanwhile, in 10mo23, output was down 2% YoY. We note that the persistent drought and unfavourable structural effects (e.g. grade depletion) continue to pressure Chile's mining industry. Chile represents ~27% of the world’s mined copper output, and if the adverse factors in its mining sector persist, in addition to the ongoing supply disruptions at a major mine in Panama, that could at least partially offset the supply additions from new Cu projects (e.g. QB2 and Udokan), which are due to ramp up in the near future
#copper
https://metals-wire.com:3000/sector/Copper
Morning Bites (part 3)
💍Hong Kong jewellery and watch sales rose 27% YoY in October, following the 28% YoY increase in September, according to the government data. To recap, the reopening of HK’s border with the Mainland became a major trigger for the trade recovery in early 2023 (and in October, 3.5mn visitors arrived in HK vs. 81k a year ago). Sales were also 30% stronger than the pre-Covid 2019 levels. Despite some recovery in HK, 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 supply discipline measures recently taken by major miners and the midstream, we reiterate our cautious view on the diamond sector, at least in the short term
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales rose 27% YoY in October, following the 28% YoY increase in September, according to the government data. To recap, the reopening of HK’s border with the Mainland became a major trigger for the trade recovery in early 2023 (and in October, 3.5mn visitors arrived in HK vs. 81k a year ago). Sales were also 30% stronger than the pre-Covid 2019 levels. Despite some recovery in HK, 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 supply discipline measures recently taken by major miners and the midstream, we reiterate our cautious view on the diamond sector, at least in the short term
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
🇵🇪Peru’s copper output increased 2% YoY in October, in line with September's dynamics, per INEI data. Overall, in 10mo23, local production was up ~14% YoY, which was roughly in-line with the Peruvian government's plan to boost domestic Cu output in 2023. Although the YTD production dynamics remain strong, we note that Anglo American launched the Quellaveco copper mine in September 2022, and the comparison base for the rest of the year will therefore be higher. Meanwhile, the joint production of Chile and Peru (~38% of global Cu supply) shrank 2% YoY in October. To recap, Peru accounts for ~11% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
🇵🇪Peru’s copper output increased 2% YoY in October, in line with September's dynamics, per INEI data. Overall, in 10mo23, local production was up ~14% YoY, which was roughly in-line with the Peruvian government's plan to boost domestic Cu output in 2023. Although the YTD production dynamics remain strong, we note that Anglo American launched the Quellaveco copper mine in September 2022, and the comparison base for the rest of the year will therefore be higher. Meanwhile, the joint production of Chile and Peru (~38% of global Cu supply) shrank 2% YoY in October. To recap, Peru accounts for ~11% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 2)
⚒Norilsk Nickel expects a 190kt nickel market surplus and a 400koz palladium deficit in 2024
• The Ni market is set to remain in surplus, at 250kt in 2023 and 190kt in 2024 (vs. the previous forecast of +180kt in 2024), as new Class-1 projects are ramped up in China and Indonesia. Nornickel sees Ni supply at 3.62mnt next year (+6% YoY). Despite higher metal production, the high-grade Ni reserves in Indonesia (~55% of global mined Ni output in FY23) might be depleted in six years, potentially creating supply risks
• The miner now anticipates a strong Pd market deficit of 0.9mnoz in 2023 and 0.4mnoz in 2024 (vs. the 0.3mnoz surplus previously expected for 2024). Furthermore, the Pt market's balanced state has been revised to deficits of 0.4mnoz and 0.3mnoz in 2023 and 2024, respectively. Despite the recent layoffs among major SA miners, Nornickel sees an increase of some 2% YoY in local PGM output in 2024
#nickel #PGMs
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⚒Norilsk Nickel expects a 190kt nickel market surplus and a 400koz palladium deficit in 2024
• The Ni market is set to remain in surplus, at 250kt in 2023 and 190kt in 2024 (vs. the previous forecast of +180kt in 2024), as new Class-1 projects are ramped up in China and Indonesia. Nornickel sees Ni supply at 3.62mnt next year (+6% YoY). Despite higher metal production, the high-grade Ni reserves in Indonesia (~55% of global mined Ni output in FY23) might be depleted in six years, potentially creating supply risks
• The miner now anticipates a strong Pd market deficit of 0.9mnoz in 2023 and 0.4mnoz in 2024 (vs. the 0.3mnoz surplus previously expected for 2024). Furthermore, the Pt market's balanced state has been revised to deficits of 0.4mnoz and 0.3mnoz in 2023 and 2024, respectively. Despite the recent layoffs among major SA miners, Nornickel sees an increase of some 2% YoY in local PGM output in 2024
#nickel #PGMs
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🏦 Global central banks purchased net 43t of gold in October, vs. the revised +72t in September, marking the fifth consecutive increase in holdings, the World Gold Council (WGC) reports. As has become traditional in recent months, the main contributors were China and Turkey (+23t and +19t, respectively), as well as Poland (+6t). The only material net seller was Uzbekistan (-11t). We reiterate our view that persistently strong gold demand from global CBs, gold miners’ rising cash costs and potentially lower US Fed funds rate in 1H24 might support the precious metal's performance
#gold
https://metals-wire.com/sector/Gold
🏦 Global central banks purchased net 43t of gold in October, vs. the revised +72t in September, marking the fifth consecutive increase in holdings, the World Gold Council (WGC) reports. As has become traditional in recent months, the main contributors were China and Turkey (+23t and +19t, respectively), as well as Poland (+6t). The only material net seller was Uzbekistan (-11t). We reiterate our view that persistently strong gold demand from global CBs, gold miners’ rising cash costs and potentially lower US Fed funds rate in 1H24 might support the precious metal's performance
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
💍Signet has reported another 11.8% YoY drop in same-store sales in 3Q23 (Aug-Oct), in line with the 2Q23 dynamics. Same-store sales in North America shrank 12.3% YoY (-12.2% YoY in the previous quarter); proceeds from the international segment were also down 4.6% YoY (-8.4% YoY in 2Q23). According to Signet CEO Virginia Drosos, Black Friday underpinned a sequential improvement in engagement trends (~50% of Signet's revenues comes from bridal), though 4Q23 sales are expected to be 3-10% down YoY. The retailer has also maintained its FY24 sales outlook, anticipating a 7-9% decline YoY
#diamonds
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💍Signet has reported another 11.8% YoY drop in same-store sales in 3Q23 (Aug-Oct), in line with the 2Q23 dynamics. Same-store sales in North America shrank 12.3% YoY (-12.2% YoY in the previous quarter); proceeds from the international segment were also down 4.6% YoY (-8.4% YoY in 2Q23). According to Signet CEO Virginia Drosos, Black Friday underpinned a sequential improvement in engagement trends (~50% of Signet's revenues comes from bridal), though 4Q23 sales are expected to be 3-10% down YoY. The retailer has also maintained its FY24 sales outlook, anticipating a 7-9% decline YoY
#diamonds
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
💎Rapaport's rough diamond price index showed a slight recovery in November. In particular, the 1ct index rose 0.8% last month, while the smaller 0.3ct and 0.5ct categories saw increases of 0.3% and 1.2%, respectively. This marked the first positive index dynamics since 1H22, although prices remain at subdued levels (up to -27% YTD, per the Rapaport data). According to the agency, US pre-holiday purchases added some optimism to the market, though buyers’ preferences currently tend to low-budget items. Overall, looming improvements in consumer sentiment (the US accounts for 53% of the global gem-set jewellery trade) might provide some support for the stressed diamond market, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💎Rapaport's rough diamond price index showed a slight recovery in November. In particular, the 1ct index rose 0.8% last month, while the smaller 0.3ct and 0.5ct categories saw increases of 0.3% and 1.2%, respectively. This marked the first positive index dynamics since 1H22, although prices remain at subdued levels (up to -27% YTD, per the Rapaport data). According to the agency, US pre-holiday purchases added some optimism to the market, though buyers’ preferences currently tend to low-budget items. Overall, looming improvements in consumer sentiment (the US accounts for 53% of the global gem-set jewellery trade) might provide some support for the stressed diamond market, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
🗞Today, China published its preliminary import/export statistics for November (see table above)
#statistics #China
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#statistics #China
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Morning Bites (part 1)
🔗China’s net finished steel exports jumped 53% YoY in November, following the 65% YoY increase in October. Chinese steel output remains elevated (+2% YoY in mid-November on a YTD basis, per the CISA data), despite Beijing’s plan to keep domestic steel production no higher than the 2022 level. According to MySteel, >33% of local steel mills were operating at a profit by the end of November (vs. <20% in late October), supporting iron ore imports
🪨China’s coal imports gained 35% YoY in November, accelerating from the +23% YoY in October. The figure was also up 63% in 11mo23. According to Reuters, local utilities took advantage of cheaper imported coal to stock up for the winter. In addition, the seasonal decline in hydropower generation also bolstered China’s coal demand
#coal #steel
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🔗China’s net finished steel exports jumped 53% YoY in November, following the 65% YoY increase in October. Chinese steel output remains elevated (+2% YoY in mid-November on a YTD basis, per the CISA data), despite Beijing’s plan to keep domestic steel production no higher than the 2022 level. According to MySteel, >33% of local steel mills were operating at a profit by the end of November (vs. <20% in late October), supporting iron ore imports
🪨China’s coal imports gained 35% YoY in November, accelerating from the +23% YoY in October. The figure was also up 63% in 11mo23. According to Reuters, local utilities took advantage of cheaper imported coal to stock up for the winter. In addition, the seasonal decline in hydropower generation also bolstered China’s coal demand
#coal #steel
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Morning Bites (part 2)
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 6% YoY in November, vs. the +14% YoY in October. However, the figure remained below the pre-COVID level (-11% vs. November 2019). In Germany and Spain, car sales were down 18% and 16%, respectively, vs. the 2019 level, while registrations in France were 12% lower. Sales in Italy were 8% below the 2019 figures, while UK sales were flat. 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/sector/PGM
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 6% YoY in November, vs. the +14% YoY in October. However, the figure remained below the pre-COVID level (-11% vs. November 2019). In Germany and Spain, car sales were down 18% and 16%, respectively, vs. the 2019 level, while registrations in France were 12% lower. Sales in Italy were 8% below the 2019 figures, while UK sales were flat. 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/sector/PGM
Morning Bites (part 3)
💎 De Beers is to reduce the value of rough diamonds allocations 20% in 2024, amid the YoY declines in stones’ prices, Rapaport reports. De Beers (29% of global rough output in 2022) has also recently allowed clients to postpone buying up to 50% of their allocations until end-2023: the miner aims to accumulate unsold gems, expecting a better pricing environment. Market sources anticipate De Beers' 10 cycle sales being broadly in line with the previous sight’s USD 80mn proceeds (the weakest since 2020), or even lower. In our view, this would mostly reflect the supply discipline measures
💍 India is to resume rough diamond imports on 15 December. Although the news was in line with the initial timing of the voluntary freeze, a GJEPC representative noted the improving sentiment in the US (53% of the global gem-set jewellery trade) on the eve of the winter holidays: this might add some support to the stressed diamond market, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💎 De Beers is to reduce the value of rough diamonds allocations 20% in 2024, amid the YoY declines in stones’ prices, Rapaport reports. De Beers (29% of global rough output in 2022) has also recently allowed clients to postpone buying up to 50% of their allocations until end-2023: the miner aims to accumulate unsold gems, expecting a better pricing environment. Market sources anticipate De Beers' 10 cycle sales being broadly in line with the previous sight’s USD 80mn proceeds (the weakest since 2020), or even lower. In our view, this would mostly reflect the supply discipline measures
💍 India is to resume rough diamond imports on 15 December. Although the news was in line with the initial timing of the voluntary freeze, a GJEPC representative noted the improving sentiment in the US (53% of the global gem-set jewellery trade) on the eve of the winter holidays: this might add some support to the stressed diamond market, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
💎US jewellery sales were roughly flat YoY in October, vs. the revised -3% YoY in September, IDEX reports, citing the US Department of Commerce. Although sales did not see YoY growth, this was the most favourable dynamics since January 2023 (with the revised +2% YoY). Meanwhile, according to Mastercard SpendingPulse, consumer sentiment in the US (~53% of the world gem-set jewellery trade) was rather upbeat ahead of the winter holidays: Black Friday retail sales grew 2.5% YoY, with Jewellery being one of the top gift sectors. Were the sales recovery trend to persist, this might support the stressed diamond sector, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💎US jewellery sales were roughly flat YoY in October, vs. the revised -3% YoY in September, IDEX reports, citing the US Department of Commerce. Although sales did not see YoY growth, this was the most favourable dynamics since January 2023 (with the revised +2% YoY). Meanwhile, according to Mastercard SpendingPulse, consumer sentiment in the US (~53% of the world gem-set jewellery trade) was rather upbeat ahead of the winter holidays: Black Friday retail sales grew 2.5% YoY, with Jewellery being one of the top gift sectors. Were the sales recovery trend to persist, this might support the stressed diamond sector, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
❤2
Morning Bites (part 2)
🔗CISA mills' daily crude steel production during late November was reported at 2.02mnt, up 2.4% from the previous ten days but down 0.6% YoY. Meanwhile, local steel inventories decreased 15.4% over the same period (-15.3% YoY). Although output declined for the 8th consecutive 10-day period, Chinese steel production on a YTD basis was still up 2.0% YoY, per the CISA data, despite plans to keep national steel output no higher than the 2022 level. However, Beijing's efforts to bolster the economy via the real estate sector might boost local steel consumption in 2024, supporting the metal’s prices, in our view. To recap, China represents ~57% of global steel production
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during late November was reported at 2.02mnt, up 2.4% from the previous ten days but down 0.6% YoY. Meanwhile, local steel inventories decreased 15.4% over the same period (-15.3% YoY). Although output declined for the 8th consecutive 10-day period, Chinese steel production on a YTD basis was still up 2.0% YoY, per the CISA data, despite plans to keep national steel output no higher than the 2022 level. However, Beijing's efforts to bolster the economy via the real estate sector might boost local steel consumption in 2024, supporting the metal’s prices, in our view. To recap, China represents ~57% of global steel production
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 3)
🇨🇱Chile plans to boost copper production by 1.04mnt by 2026, Bloomberg reports, citing the country's Finance Minister Mario Marcel. If this plan were to materialise, the new supply would add ~20% to Chile's mined Cu output in 2023E and imply a CAGR of 6% over the next three years. The Chilean copper commission, however, anticipates more gradual growth in the coming years: it forecasts, for instance, production to increase only 4% YoY to 5.6mnt in 2024. The national output growth is to be mainly supported by a wide project pipeline for 2022-2031 of almost USD 74bn to be spent by Codelco, Anglo American, Antofagasta and BHP. Although the production boost corresponds with the growing global appetite for renewables, we see the target as ambitious, given that persistent drought and grade depletion are pressuring Chile's mining industry (local output was -2% YoY in 10mo23)
Chile represents ~27% of the world’s mined copper production
#copper
https://metals-wire.com/sector/Copper
🇨🇱Chile plans to boost copper production by 1.04mnt by 2026, Bloomberg reports, citing the country's Finance Minister Mario Marcel. If this plan were to materialise, the new supply would add ~20% to Chile's mined Cu output in 2023E and imply a CAGR of 6% over the next three years. The Chilean copper commission, however, anticipates more gradual growth in the coming years: it forecasts, for instance, production to increase only 4% YoY to 5.6mnt in 2024. The national output growth is to be mainly supported by a wide project pipeline for 2022-2031 of almost USD 74bn to be spent by Codelco, Anglo American, Antofagasta and BHP. Although the production boost corresponds with the growing global appetite for renewables, we see the target as ambitious, given that persistent drought and grade depletion are pressuring Chile's mining industry (local output was -2% YoY in 10mo23)
Chile represents ~27% of the world’s mined copper production
#copper
https://metals-wire.com/sector/Copper