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
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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
Morning Bites (part 1)
📝AngloAmerican has made a material cut to its guidance for 2024-25 across key commodities
• Copper production: now seen at 730-790kt in 2024 (-20% vs. previous estimates) and 690-750kt in 2025 (-19%), mainly due to lower ore grades in Chile. As for 2026, the figure is seen at 760-820kt, according to the company's presentation
• PGMs: 3.3-3.7mnoz are to be produced in 2024 (-8%) due to some infrastructure closures, while the 2025 production is expected at 3.0-3.4mnoz (-14%), the same as for 2026
• Diamonds output: although the outlook for next year has remained unchanged, the figure for 2025 was lowered 2mnct to 30-33mnct
Overall, the production cuts might positively affect the performances of metal prices, but PGM prices have not reacted yet (AAL accounted for 21% of global Pd and 34% of Pt supply in 2022)
#diamonds #copper #PGMs
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📝AngloAmerican has made a material cut to its guidance for 2024-25 across key commodities
• Copper production: now seen at 730-790kt in 2024 (-20% vs. previous estimates) and 690-750kt in 2025 (-19%), mainly due to lower ore grades in Chile. As for 2026, the figure is seen at 760-820kt, according to the company's presentation
• PGMs: 3.3-3.7mnoz are to be produced in 2024 (-8%) due to some infrastructure closures, while the 2025 production is expected at 3.0-3.4mnoz (-14%), the same as for 2026
• Diamonds output: although the outlook for next year has remained unchanged, the figure for 2025 was lowered 2mnct to 30-33mnct
Overall, the production cuts might positively affect the performances of metal prices, but PGM prices have not reacted yet (AAL accounted for 21% of global Pd and 34% of Pt supply in 2022)
#diamonds #copper #PGMs
https://metals-wire.com/news-reports
Morning Bites (part 2)
📉Gold-backed ETFs reduced their holdings 9t in November, decelerating from the -37t in October, the World Gold Council reports. This marked the sixth consecutive month of declines. Specifically, the main sellers were European funds with a net outflow of 20t, which was partially offset by net purchases of 10t in North America. Overall, in 11mo23, global ETF holdings have shrunk 235t (~5% of gold demand in 2022 in annualised terms). We reiterate our view that ETF sales remain one of the key factors pressuring gold prices, while strong demand from global central banks, the rising cash costs of gold miners, as well as with a potentially lower US Fed funds rate in 1H24, might add some support for gold price performance
#ETF #gold
https://metals-wire.com/sector/Gold
📉Gold-backed ETFs reduced their holdings 9t in November, decelerating from the -37t in October, the World Gold Council reports. This marked the sixth consecutive month of declines. Specifically, the main sellers were European funds with a net outflow of 20t, which was partially offset by net purchases of 10t in North America. Overall, in 11mo23, global ETF holdings have shrunk 235t (~5% of gold demand in 2022 in annualised terms). We reiterate our view that ETF sales remain one of the key factors pressuring gold prices, while strong demand from global central banks, the rising cash costs of gold miners, as well as with a potentially lower US Fed funds rate in 1H24, might add some support for gold price performance
#ETF #gold
https://metals-wire.com/sector/Gold
Morning Bites (part 3)
🚘US light vehicle sales rose 9% YoY in November, accelerating from the 2% YoY growth in October. However, the number was still 12% short of the pre-Covid 2019 level. Seasonally adjusted sales volumes also grew, and were up 10% YoY last month (-9% vs. 2019). Despite the positive dynamics seen in the last 16 months, US sales remain materially below the 2019 figures, which might weigh further on automotive demand for PGMs, at least in the near future. We note that North America accounted for ~22% and 16% of world autocatalyst Pd and Pt consumption, respectively, in 2022
#cars
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🚘US light vehicle sales rose 9% YoY in November, accelerating from the 2% YoY growth in October. However, the number was still 12% short of the pre-Covid 2019 level. Seasonally adjusted sales volumes also grew, and were up 10% YoY last month (-9% vs. 2019). Despite the positive dynamics seen in the last 16 months, US sales remain materially below the 2019 figures, which might weigh further on automotive demand for PGMs, at least in the near future. We note that North America accounted for ~22% and 16% of world autocatalyst Pd and Pt consumption, respectively, in 2022
#cars
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Morning Bites (part 1)
📌China’s new internal combustion engine car sales jumped 26% YoY in November from a low base, following the 6% YoY increase in October. In 11mo23, ICE car sales have grown 2% YoY. However, the numbers remained below their pre-Covid level (-18% vs. November 2019), amid the increased appetite for EVs, which continue to weigh on PGM consumption. To recap, 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 31% YoY in November, after the 34% YoY gain in October. In 11mo23, local EV sales grew 36% YoY, while CAAM expects the EV penetration rate to hit 40% in 2024 (vs. ~35% in November). 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
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📌China’s new internal combustion engine car sales jumped 26% YoY in November from a low base, following the 6% YoY increase in October. In 11mo23, ICE car sales have grown 2% YoY. However, the numbers remained below their pre-Covid level (-18% vs. November 2019), amid the increased appetite for EVs, which continue to weigh on PGM consumption. To recap, 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 31% YoY in November, after the 34% YoY gain in October. In 11mo23, local EV sales grew 36% YoY, while CAAM expects the EV penetration rate to hit 40% in 2024 (vs. ~35% in November). 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/news-reports
Morning Bites (part 2)
💎Petra Diamonds’ LFL rough prices at its December auction surged 20% from the previous tender (Sep-Oct), mainly driven by higher proceeds from <2ct categories. However, YTD LFL prices remain subdued (-13% vs. the three equivalent tenders of FY 2023). According to Petra CEO Richard Duffy, this sharp increase in LFL prices implies that diamond prices have likely bottomed, supported by upbeat retail sales in the US and the resumption of Indian diamond imports from 15 December. Furthermore, over the December tender, the miner realised 463kct (+4% vs. the October auction and +53% YoY). In our view, the news is moderately positive for the market sentiment, and might indicate a looming recovery in the stressed diamond sector, if this trend persists
#diamonds
https://metals-wire.com/sector/Diamonds
💎Petra Diamonds’ LFL rough prices at its December auction surged 20% from the previous tender (Sep-Oct), mainly driven by higher proceeds from <2ct categories. However, YTD LFL prices remain subdued (-13% vs. the three equivalent tenders of FY 2023). According to Petra CEO Richard Duffy, this sharp increase in LFL prices implies that diamond prices have likely bottomed, supported by upbeat retail sales in the US and the resumption of Indian diamond imports from 15 December. Furthermore, over the December tender, the miner realised 463kct (+4% vs. the October auction and +53% YoY). In our view, the news is moderately positive for the market sentiment, and might indicate a looming recovery in the stressed diamond sector, if this trend persists
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🇿🇦South Africa’s PGM mining output rose 17% YoY in October, mainly due to the low base effect (-33% YoY in October 2022), following the 4% YoY growth in September. Meanwhile, local gold production inched up 2% YoY. Overall, given the various economic and infrastructure challenges in SA, as well as the subdued PGM prices that triggered job cuts among two major players (Sibanye and Implats), we might potentially see lower supply next year. Anglo American (21% and 34% of global Pd and Pt output, respectively) has also recently lowered its PGM production guidance 8% to 3.3-3.7mnoz in 2024, which could support prices next year. However, at this point, weak automotive demand continues to pressure the performance of PGMs
To recap, SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of world gold production
#PGMs #gold
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🇿🇦South Africa’s PGM mining output rose 17% YoY in October, mainly due to the low base effect (-33% YoY in October 2022), following the 4% YoY growth in September. Meanwhile, local gold production inched up 2% YoY. Overall, given the various economic and infrastructure challenges in SA, as well as the subdued PGM prices that triggered job cuts among two major players (Sibanye and Implats), we might potentially see lower supply next year. Anglo American (21% and 34% of global Pd and Pt output, respectively) has also recently lowered its PGM production guidance 8% to 3.3-3.7mnoz in 2024, which could support prices next year. However, at this point, weak automotive demand continues to pressure the performance of PGMs
To recap, SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of world gold production
#PGMs #gold
https://metals-wire.com/news-reports
👍2
Morning Bites (part 1)
🔗CISA mills' daily crude steel production during early December was reported at 1.93mnt, down 4.2% from the previous ten days and -2.8% YoY, marking the 9th consecutive 10-day period of declines. Meanwhile, local steel inventories rose 8.8% over the same period (-8.1% YoY). Nevertheless, China’s steel production was still up 1.9% YoY on YTD basis, per CISA data, despite Beijing’s efforts to keep national output below 2022 levels. The Chinese government’s intention to bolster the economy growth via real estate sector might, however, boost local steel consumption in 2024, supporting the metal's prices, in our view
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during early December was reported at 1.93mnt, down 4.2% from the previous ten days and -2.8% YoY, marking the 9th consecutive 10-day period of declines. Meanwhile, local steel inventories rose 8.8% over the same period (-8.1% YoY). Nevertheless, China’s steel production was still up 1.9% YoY on YTD basis, per CISA data, despite Beijing’s efforts to keep national output below 2022 levels. The Chinese government’s intention to bolster the economy growth via real estate sector might, however, boost local steel consumption in 2024, supporting the metal's prices, in our view
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🏦China’s aggregate financing jumped 24% YoY in November to CNY 2.45tn, missing the consensus estimates of CNY 2.60tn. Meanwhile, traditional bank loans fell 10% YoY (vs. +20% YoY in October), being 16% below the consensus estimates. According to Reuters, China's central bank (PBoC) is expected to deliver some monetary policy easing in the coming weeks, following the announced adjustments, which are aimed at supporting the country's economic recovery in 2024. This would be positive for local construction activity, if the measures materialise and, hence, for China’s demand for industrial metals next year
To recap, China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#global
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🏦China’s aggregate financing jumped 24% YoY in November to CNY 2.45tn, missing the consensus estimates of CNY 2.60tn. Meanwhile, traditional bank loans fell 10% YoY (vs. +20% YoY in October), being 16% below the consensus estimates. According to Reuters, China's central bank (PBoC) is expected to deliver some monetary policy easing in the coming weeks, following the announced adjustments, which are aimed at supporting the country's economic recovery in 2024. This would be positive for local construction activity, if the measures materialise and, hence, for China’s demand for industrial metals next year
To recap, China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#global
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🗞Today, China has published its industrial production data for November (see table above)
#statistics #China
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#statistics #China
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