Morning Bites (part 2)
🏆Russia’s gold output was flat YoY in November, vs. the 26.7% YoY fall in October, according to the Rosstat data. Meanwhile, in 11mo23, Russian gold production remained 2.0% lower YoY. We maintain our positive outlook on gold's performance, amid strong physical demand and rising cash costs for gold miners, as well as the potentially lower US Fed funds rate in 1H24
We remind readers that Russia represents ~9% of the world's mined gold production
#gold
https://metals-wire.com/sector/Gold
🏆Russia’s gold output was flat YoY in November, vs. the 26.7% YoY fall in October, according to the Rosstat data. Meanwhile, in 11mo23, Russian gold production remained 2.0% lower YoY. We maintain our positive outlook on gold's performance, amid strong physical demand and rising cash costs for gold miners, as well as the potentially lower US Fed funds rate in 1H24
We remind readers that Russia represents ~9% of the world's mined gold production
#gold
https://metals-wire.com/sector/Gold
Morning Bites
🏗China’s preliminary excavator sales were down 2% YoY in December (domestic + export), decelerating from the 37% YoY drop in November, according to the CME estimates. Domestic sales (a key indicator of construction activity) are expected to be up 27% YoY, reversing from the -48% YoY in November, mainly due to the low base effect (the figure is still ~50% lower than the December 2021 level). Meanwhile, the new potential stimulus for the economy announced by Beijing might add support to local construction activity and bolster the demand for industrial metals (e.g. steel, copper and aluminium) in 2024, we believe
🛒Japanese consumers have agreed to pay a USD 90/t aluminium premium in 1Q24, Reuters reports. The figure is 7% lower than the 4Q23 premiums, but 5% higher YoY. According to sources involved in the pricing talks, the premium is lower QoQ, reflecting slow local demand and a buildup in the metal’s inventory
#steel #aluminium
https://metals-wire.com/news-reports
🏗China’s preliminary excavator sales were down 2% YoY in December (domestic + export), decelerating from the 37% YoY drop in November, according to the CME estimates. Domestic sales (a key indicator of construction activity) are expected to be up 27% YoY, reversing from the -48% YoY in November, mainly due to the low base effect (the figure is still ~50% lower than the December 2021 level). Meanwhile, the new potential stimulus for the economy announced by Beijing might add support to local construction activity and bolster the demand for industrial metals (e.g. steel, copper and aluminium) in 2024, we believe
🛒Japanese consumers have agreed to pay a USD 90/t aluminium premium in 1Q24, Reuters reports. The figure is 7% lower than the 4Q23 premiums, but 5% higher YoY. According to sources involved in the pricing talks, the premium is lower QoQ, reflecting slow local demand and a buildup in the metal’s inventory
#steel #aluminium
https://metals-wire.com/news-reports
Dear Metals Wire subscribers,
Thank you for being with us in 2023. We wish you a season of happiness, and hope the holiday period will sparkle with joy and laughter! May your happiness be large and your bills be small
We look forward to continuing our work in 2024, sharing metals markets insights and our most interesting trading ideas
With every good wish,
The Metals Wire Team
Thank you for being with us in 2023. We wish you a season of happiness, and hope the holiday period will sparkle with joy and laughter! May your happiness be large and your bills be small
We look forward to continuing our work in 2024, sharing metals markets insights and our most interesting trading ideas
With every good wish,
The Metals Wire Team
❤11
Morning Bites (part 1)
🌏Global manufacturing PMIs remained subdued in December. The Eurozone Markit Manufacturing PMI was 44.4 (vs. consensus estimates of 44.2), a slight increase from November's 44.2. The US ISM manufacturing PMI rose to 47.4, from 46.7 in the previous month.
🇨🇳The official NBS Manufacturing PMI in China declined further, to 49.0 in December (from 49.4 in November). However, the Caixin China Manufacturing PMI inched up to 50.8 in December (from 50.7), beating the consensus estimates of 50.4.
❗️Overall, global PMIs remained below 50.0 in December, which indicates the ongoing slowdown in the manufacturing sector. Meanwhile, Beijing's efforts to bolster the local economy via construction activity might result in stronger demand for industrial metals (e.g. steel, copper and aluminium) in 2024
#PMIs
https://metals-wire.com/news-reports
🌏Global manufacturing PMIs remained subdued in December. The Eurozone Markit Manufacturing PMI was 44.4 (vs. consensus estimates of 44.2), a slight increase from November's 44.2. The US ISM manufacturing PMI rose to 47.4, from 46.7 in the previous month.
🇨🇳The official NBS Manufacturing PMI in China declined further, to 49.0 in December (from 49.4 in November). However, the Caixin China Manufacturing PMI inched up to 50.8 in December (from 50.7), beating the consensus estimates of 50.4.
❗️Overall, global PMIs remained below 50.0 in December, which indicates the ongoing slowdown in the manufacturing sector. Meanwhile, Beijing's efforts to bolster the local economy via construction activity might result in stronger demand for industrial metals (e.g. steel, copper and aluminium) in 2024
#PMIs
https://metals-wire.com/news-reports
👍1
Morning Bites (part 2)
🔗CISA mills daily crude steel production during late December was reported at 1.67mnt, down 13.6% vs. the previous ten days, and 13.0% lower YoY, marking the 11th consecutive 10-day period of YoY declines. Meanwhile, local steel inventories fell 17.7% over the period (-5.3% YoY). Per CISA data, during 2023, China's production increased 1.4% YoY, as the country's government prioritised economic growth over emission cuts. Meanwhile, efforts to bolster domestic construction could add support to steel products prices in 2024, in addition to the overall declining steel output, we believe
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills daily crude steel production during late December was reported at 1.67mnt, down 13.6% vs. the previous ten days, and 13.0% lower YoY, marking the 11th consecutive 10-day period of YoY declines. Meanwhile, local steel inventories fell 17.7% over the period (-5.3% YoY). Per CISA data, during 2023, China's production increased 1.4% YoY, as the country's government prioritised economic growth over emission cuts. Meanwhile, efforts to bolster domestic construction could add support to steel products prices in 2024, in addition to the overall declining steel output, we believe
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 3)
🏦China continued to accumulate gold reserves in December, purchasing 9t (~2% of annualised physical gold demand in 2022), marking the 14th consecutive month of additions, SAFE reports. Hence, the PBoC's gold holdings rose ~287t since Nov-22 to 2,239t, while representing only 5% of the country’s FX reserves, indicating the potential for further purchases. China's purchases in Nov-22 - Dec-23 accounted for ~5% of the world’s physical demand in 2022, in annual terms. Overall, given miners’ growing costs, strong demand from central banks and potentially lower US Fed funds rate in 1H24, we keep our bullish view on gold's performance
💎US jewellery sales gained 3% YoY in November, vs. the flat YoY dynamics seen in October, IDEX reports, citing the US Department of Commerce. Noteworthy, the sales were up for the first time since January 2023: were the sales recovery trend to persist, this might add support to the stressed diamond sector
#gold #diamonds
https://metals-wire.com/news-reports
🏦China continued to accumulate gold reserves in December, purchasing 9t (~2% of annualised physical gold demand in 2022), marking the 14th consecutive month of additions, SAFE reports. Hence, the PBoC's gold holdings rose ~287t since Nov-22 to 2,239t, while representing only 5% of the country’s FX reserves, indicating the potential for further purchases. China's purchases in Nov-22 - Dec-23 accounted for ~5% of the world’s physical demand in 2022, in annual terms. Overall, given miners’ growing costs, strong demand from central banks and potentially lower US Fed funds rate in 1H24, we keep our bullish view on gold's performance
💎US jewellery sales gained 3% YoY in November, vs. the flat YoY dynamics seen in October, IDEX reports, citing the US Department of Commerce. Noteworthy, the sales were up for the first time since January 2023: were the sales recovery trend to persist, this might add support to the stressed diamond sector
#gold #diamonds
https://metals-wire.com/news-reports
Morning Bites (part 1)
🏦 Global central banks accumulated net 44t of gold in November 2023, vs. the revised +42t in October, marking the sixth consecutive increase in holdings, the World Gold Council (WGC) reports. In November, the main contributors were Turkey (+25t of gold), Poland (+19t) and China (+12t). Meanwhile, Uzbekistan was still on the sellers' side, selling net 11t. We keep our positive outlook on gold's performance, taking into account the steady demand from global CBs, as well as miners’ rising cash costs and the potentially lower US Fed funds rate in 1H24
#gold
https://metals-wire.com/sector/Gold
🏦 Global central banks accumulated net 44t of gold in November 2023, vs. the revised +42t in October, marking the sixth consecutive increase in holdings, the World Gold Council (WGC) reports. In November, the main contributors were Turkey (+25t of gold), Poland (+19t) and China (+12t). Meanwhile, Uzbekistan was still on the sellers' side, selling net 11t. We keep our positive outlook on gold's performance, taking into account the steady demand from global CBs, as well as miners’ rising cash costs and the potentially lower US Fed funds rate in 1H24
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
📉Gold-backed ETFs saw outflows of 10t in December, roughly in line with the -9t in November, according to the World Gold Council (WGC). The figure accounted for ~2% of annualised global physical gold demand in 2022, marking the 7th consecutive month of declines. Specifically, in December, North American funds raised net 11t, while the EU sold 25t, with only 3t of purchases seen in Asia. Overall, global ETF holdings contracted 244t in 2023 (~5% of physical gold demand in 2022), which placed significant pressure on gold performance. Potential monetary policy easing in the EU and US in 1H24, however, might attract funds to gold purchases, we believe
#ETF #gold
https://metals-wire.com/sector/Gold
📉Gold-backed ETFs saw outflows of 10t in December, roughly in line with the -9t in November, according to the World Gold Council (WGC). The figure accounted for ~2% of annualised global physical gold demand in 2022, marking the 7th consecutive month of declines. Specifically, in December, North American funds raised net 11t, while the EU sold 25t, with only 3t of purchases seen in Asia. Overall, global ETF holdings contracted 244t in 2023 (~5% of physical gold demand in 2022), which placed significant pressure on gold performance. Potential monetary policy easing in the EU and US in 1H24, however, might attract funds to gold purchases, we believe
#ETF #gold
https://metals-wire.com/sector/Gold
Morning Bites (part 3)
💍Hong Kong jewellery and watch sales surged 61% YoY in November 2023, following the 27% YoY increase in October, according to the government data. To recap, the reopening of HK’s border with the Mainland in early 2023 became a major trigger for the trade recovery (in November 2023, 3.8mn visitors arrived in HK, 2.6x higher YoY). Sales were also 41% stronger than the pre-Covid 2019 level. Overall, the gradual improvement in consumer sentiment on the US and Chinese markets (~53% and ~12% of the world's gem-set jewellery trade, respectively) might add support to the stressed diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales surged 61% YoY in November 2023, following the 27% YoY increase in October, according to the government data. To recap, the reopening of HK’s border with the Mainland in early 2023 became a major trigger for the trade recovery (in November 2023, 3.8mn visitors arrived in HK, 2.6x higher YoY). Sales were also 41% stronger than the pre-Covid 2019 level. Overall, the gradual improvement in consumer sentiment on the US and Chinese markets (~53% and ~12% of the world's gem-set jewellery trade, respectively) might add support to the stressed diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 4)
🇨🇱Chile’s copper output fell 2% YoY in November, reversing the 4% YoY increase in September and October, and remaining near the historical lows. In particular, production was down 16% YoY at Codelco, while it jumped 6% YoY at Escondida and rose 3% YoY in Collahuasi. Meanwhile, in 11mo23, the output was down 2% YoY, due to persistent drought and unfavourable structural effects (e.g. grade depletion) that continue to pressure Chile's mining industry. Overall, if the adverse factors in the country’s mining sector persist, they, together with disruptions at Cobre Panama, could at least partially offset the supply additions from new Cu projects globally (e.g. QB2 and Udokan), which are due to ramp up in the near future
To recap, Chile represents ~27% of the world’s mined copper output
#copper
https://metals-wire.com/sector/Copper
🇨🇱Chile’s copper output fell 2% YoY in November, reversing the 4% YoY increase in September and October, and remaining near the historical lows. In particular, production was down 16% YoY at Codelco, while it jumped 6% YoY at Escondida and rose 3% YoY in Collahuasi. Meanwhile, in 11mo23, the output was down 2% YoY, due to persistent drought and unfavourable structural effects (e.g. grade depletion) that continue to pressure Chile's mining industry. Overall, if the adverse factors in the country’s mining sector persist, they, together with disruptions at Cobre Panama, could at least partially offset the supply additions from new Cu projects globally (e.g. QB2 and Udokan), which are due to ramp up in the near future
To recap, Chile represents ~27% of the world’s mined copper output
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
🚘US light vehicle sales grew 13% YoY in December, vs. the +9% YoY in November. Nevertheless, the figure was 6% below the pre-Covid 2019 level. Seasonally adj. sales volumes were up 17% YoY last month (-5% vs. 2019). Despite the positive dynamics seen in the last 17 months, US sales remain short of the 2019 figures. This, along with the growing interest in EVs globally, might weigh further on automotive demand for PGMs, at least in the short term. We note that North America represented ~22% and 16% of world automotive Pd and Pt demand, respectively, in 2022
💎De Beers is to resume rough diamond auctions next week, IDEX reports. Although this is in line with the initial timing announced by the miner (September-December 2023), it might reflect improving sentiment on the stressed diamond market. The auctions have historically represented ~10% of De Beers’ rough diamond sales
#cars #diamonds
https://metals-wire.com/news-reports
🚘US light vehicle sales grew 13% YoY in December, vs. the +9% YoY in November. Nevertheless, the figure was 6% below the pre-Covid 2019 level. Seasonally adj. sales volumes were up 17% YoY last month (-5% vs. 2019). Despite the positive dynamics seen in the last 17 months, US sales remain short of the 2019 figures. This, along with the growing interest in EVs globally, might weigh further on automotive demand for PGMs, at least in the short term. We note that North America represented ~22% and 16% of world automotive Pd and Pt demand, respectively, in 2022
💎De Beers is to resume rough diamond auctions next week, IDEX reports. Although this is in line with the initial timing announced by the miner (September-December 2023), it might reflect improving sentiment on the stressed diamond market. The auctions have historically represented ~10% of De Beers’ rough diamond sales
#cars #diamonds
https://metals-wire.com/news-reports
Morning Bites (part 2)
🏗China’s excavator sales dropped 1% YoY in December (domestic + export), decelerating from the 37% YoY decline in November amid the low base effect (sales fell 30% YoY in Dec-22), per CCMA data. The figure was in-line with the preliminary estimates. Overall, during 2023, the sales dropped 25% YoY (-41% YoY in the domestic market), reflecting the ongoing stagnation in the country’s property sector. The new local economy support measures recently announced by Beijing, however, are likely to bolster domestic construction activity and thus raise the demand for industrial metals in 2024, we believe
To recap, China accounts for 52% of global steel consumption, and for 55% and 58% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
🏗China’s excavator sales dropped 1% YoY in December (domestic + export), decelerating from the 37% YoY decline in November amid the low base effect (sales fell 30% YoY in Dec-22), per CCMA data. The figure was in-line with the preliminary estimates. Overall, during 2023, the sales dropped 25% YoY (-41% YoY in the domestic market), reflecting the ongoing stagnation in the country’s property sector. The new local economy support measures recently announced by Beijing, however, are likely to bolster domestic construction activity and thus raise the demand for industrial metals in 2024, we believe
To recap, China accounts for 52% of global steel consumption, and for 55% and 58% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
🗞Today, China published its preliminary import/export statistics for December (see table above)
#statistics #China
https://metals-wire.com/news-reports
#statistics #China
https://metals-wire.com/news-reports
Morning Bites (part 1)
🔗China’s net finished steel exports rose 50% YoY in December, vs. the 53% YoY increase in November. Overall, per CISA's data, Chinese steel output was up 1.4% YoY in 2023, as Beijing prioritised economic growth over cutting emissions. According to MySteel, 28% of local steel mills were operating at a profit by the end of December (vs. 33% in late November), which might add some support to China's steel prices, we believe
🪨China’s coal imports jumped 53% YoY in December, accelerating from the 35% YoY growth in November. The figure was also up 62% YoY in FY 2023. According to Reuters, China’s coal imports hit historical highs for the second consecutive month, as unusually cold weather in many parts of the country boosted coal demand
#coal #steel
https://metals-wire.com/news-reports
🔗China’s net finished steel exports rose 50% YoY in December, vs. the 53% YoY increase in November. Overall, per CISA's data, Chinese steel output was up 1.4% YoY in 2023, as Beijing prioritised economic growth over cutting emissions. According to MySteel, 28% of local steel mills were operating at a profit by the end of December (vs. 33% in late November), which might add some support to China's steel prices, we believe
🪨China’s coal imports jumped 53% YoY in December, accelerating from the 35% YoY growth in November. The figure was also up 62% YoY in FY 2023. According to Reuters, China’s coal imports hit historical highs for the second consecutive month, as unusually cold weather in many parts of the country boosted coal demand
#coal #steel
https://metals-wire.com/news-reports
Morning Bites (part 2)
🚘New car registrations in France, the UK, Spain, Italy and Germany fell 3% YoY in December, vs. the 6% YoY increase in November. The figure was still below the pre-COVID level (-15% vs. December 2019). In Germany and Spain, car sales were down 15% and 23%, respectively, vs. the 2019 level, while registrations in France were 14% lower. Sales in Italy were 21% below the 2019 figures, while UK sales lost 5%. Given these five countries represent ~70% of new vehicle registrations in Europe, the region’s car sales have likely shown a moderate YoY decline in late-2023, 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 fell 3% YoY in December, vs. the 6% YoY increase in November. The figure was still below the pre-COVID level (-15% vs. December 2019). In Germany and Spain, car sales were down 15% and 23%, respectively, vs. the 2019 level, while registrations in France were 14% lower. Sales in Italy were 21% below the 2019 figures, while UK sales lost 5%. Given these five countries represent ~70% of new vehicle registrations in Europe, the region’s car sales have likely shown a moderate YoY decline in late-2023, while remaining below their pre-pandemic levels
#cars
https://metals-wire.com/sector/PGM
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, among major M&M names, Alcoa is to release its 4Q23 financials. On EBITDA, we are more bullish than the consensus
We are also awaiting Chinese industrial production, EU car registrations data and South African mining statistics
#reporting_season
https://metals-wire.com/events
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among major M&M names, Alcoa is to release its 4Q23 financials. On EBITDA, we are more bullish than the consensus
We are also awaiting Chinese industrial production, EU car registrations data and South African mining statistics
#reporting_season
https://metals-wire.com/events
Morning Bites (part 1)
📌China’s new internal combustion engine car sales grew 12% YoY in December, after the 26% YoY spike in November. However, the numbers remained below their pre-Covid level (-12% vs. December 2019), amid the strong appetite for EVs, which continues to pressure PGM consumption. Overall, in 2023 ICE car sales rose 3% YoY (-16% vs. 2019). To recap, the Chinese automotive sector represents some 26% and 17% of the global demand for Pd and Pt, respectively
📌New EV sales in China surged 47% YoY in December, following the 31% YoY increase in November. Meanwhile, throughout 2023, sales rose 38% YoY. In our view, the record high local EV sales might further support the consumption of the battery metals basket (i.e. 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
📌China’s new internal combustion engine car sales grew 12% YoY in December, after the 26% YoY spike in November. However, the numbers remained below their pre-Covid level (-12% vs. December 2019), amid the strong appetite for EVs, which continues to pressure PGM consumption. Overall, in 2023 ICE car sales rose 3% YoY (-16% vs. 2019). To recap, the Chinese automotive sector represents some 26% and 17% of the global demand for Pd and Pt, respectively
📌New EV sales in China surged 47% YoY in December, following the 31% YoY increase in November. Meanwhile, throughout 2023, sales rose 38% YoY. In our view, the record high local EV sales might further support the consumption of the battery metals basket (i.e. 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)
☢️ Kazatomprom expects to miss production targets for 2024-25, but remains committed to its 2024 delivery obligations, according to a company press release. The miner stated that supply risks are driven by the shortage of sulfuric acid (a key operating raw material) and construction delays at newly developed deposits. The company said that it would provide more details in its FY23 trading update (due 1 February). In early-2024, spot U3O8 prices hit 15-year highs, amid the supply issues (including the suspension of Niger’s shipments to the EU, and Cameco lowering its guidance by ~8%) and growing state interest in nuclear energy. Overall, the news might add additional support to already buoyant uranium prices
Note that as of mid-2023, Kazatomprom planned to produce 25.3-31.0kt of U3O8 in 2024-25 (52-64% of the global 2022 mined output)
#uranium
https://metals-wire.com/sector/Uranium
☢️ Kazatomprom expects to miss production targets for 2024-25, but remains committed to its 2024 delivery obligations, according to a company press release. The miner stated that supply risks are driven by the shortage of sulfuric acid (a key operating raw material) and construction delays at newly developed deposits. The company said that it would provide more details in its FY23 trading update (due 1 February). In early-2024, spot U3O8 prices hit 15-year highs, amid the supply issues (including the suspension of Niger’s shipments to the EU, and Cameco lowering its guidance by ~8%) and growing state interest in nuclear energy. Overall, the news might add additional support to already buoyant uranium prices
Note that as of mid-2023, Kazatomprom planned to produce 25.3-31.0kt of U3O8 in 2024-25 (52-64% of the global 2022 mined output)
#uranium
https://metals-wire.com/sector/Uranium