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
Alcoa 4Q24 results - EBITDA margin slowly recovers
✏️Alcoa's 4Q24 revenues were above both the consensus and our forecasts (by +3% and +8%, respectively) due to upbeat alumina shipments. However, cost pressure was also higher than we had anticipated, so EBITDA matched our forecast (+6% vs. the consensus)
⛏Alcoa‘s outlook for its 2025 alumina production is 9.5-9.7mnt — a decrease of 3-5% YoY due to the curtailment of Kwinana refinery operations — while shipments are expected at 13.1-13.3mnt (flat YoY). Aluminum output is seen at 2.3-2.5mnt, up 4-13% YoY due to smelter restarts, while shipments are expected between 2.6-2.8mnt (vs. 2.6mnt in 2024)
❗️At spot, we expect Alcoa’s 1Q25F EBITDA to be moderately stronger QoQ, as the spot Al price is ~4% above the 4Q24 avg.
#AA #Aluminium
https://metals-wire.com/company/AA_US
✏️Alcoa's 4Q24 revenues were above both the consensus and our forecasts (by +3% and +8%, respectively) due to upbeat alumina shipments. However, cost pressure was also higher than we had anticipated, so EBITDA matched our forecast (+6% vs. the consensus)
⛏Alcoa‘s outlook for its 2025 alumina production is 9.5-9.7mnt — a decrease of 3-5% YoY due to the curtailment of Kwinana refinery operations — while shipments are expected at 13.1-13.3mnt (flat YoY). Aluminum output is seen at 2.3-2.5mnt, up 4-13% YoY due to smelter restarts, while shipments are expected between 2.6-2.8mnt (vs. 2.6mnt in 2024)
❗️At spot, we expect Alcoa’s 1Q25F EBITDA to be moderately stronger QoQ, as the spot Al price is ~4% above the 4Q24 avg.
#AA #Aluminium
https://metals-wire.com/company/AA_US
Morning Bites (part 1)
💎 India’s rough diamond net imports dropped 14% YoY in December, decelerating from the -79% YoY in November. Meanwhile, India’s polished diamond net exports shrank 48% YoY (vs. the -27% YoY in November). Synthetic rough diamond net imports rose 17% YoY, reversing from the -23% YoY in November. As such, the share of lab-grown net rough imports in diamond trading was 9% in December. We also remind readers that in mid-December, India (~95% of world polished stone supply) resumed rough imports after 2 months of suspension. Overall, the gradual improvement of consumer sentiment in the (key) US and Chinese markets (which together account for ~65% of the world's gem-set jewellery trade) might trigger the recovery on the stressed diamond market, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India’s rough diamond net imports dropped 14% YoY in December, decelerating from the -79% YoY in November. Meanwhile, India’s polished diamond net exports shrank 48% YoY (vs. the -27% YoY in November). Synthetic rough diamond net imports rose 17% YoY, reversing from the -23% YoY in November. As such, the share of lab-grown net rough imports in diamond trading was 9% in December. We also remind readers that in mid-December, India (~95% of world polished stone supply) resumed rough imports after 2 months of suspension. Overall, the gradual improvement of consumer sentiment in the (key) US and Chinese markets (which together account for ~65% of the world's gem-set jewellery trade) might trigger the recovery on the stressed diamond market, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
💎De Beers has reduced rough prices to bolster sales at its 1st cycle in 2024, Bloomberg reports, citing people familiar with the matter. The miner lowered prices 5-10% for rough stones under 0.75ct, with no reductions for the smallest items. Larger stones (2-4ct) have seen the biggest cuts, of up to 25% in some categories. In our view, the decline was likely driven by the overall mix worsening, as well as De Beers' potential liquidity needs (the company suspended sales in late-2023 and so might have attempted to sell the maximum feasible volumes). Furthermore, the current market environment could be similar to the 2015-16 stress period, when rough sales and prices showed a robust recovery from the very bottom
As such, if prices start to recover in the next 2-3 months, that might be a strong signal of an upcoming market turnaround. We also await De Beers' market comments in its cycle 1 report (due on 31 January)
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reduced rough prices to bolster sales at its 1st cycle in 2024, Bloomberg reports, citing people familiar with the matter. The miner lowered prices 5-10% for rough stones under 0.75ct, with no reductions for the smallest items. Larger stones (2-4ct) have seen the biggest cuts, of up to 25% in some categories. In our view, the decline was likely driven by the overall mix worsening, as well as De Beers' potential liquidity needs (the company suspended sales in late-2023 and so might have attempted to sell the maximum feasible volumes). Furthermore, the current market environment could be similar to the 2015-16 stress period, when rough sales and prices showed a robust recovery from the very bottom
As such, if prices start to recover in the next 2-3 months, that might be a strong signal of an upcoming market turnaround. We also await De Beers' market comments in its cycle 1 report (due on 31 January)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
🔗CISA mills' daily crude steel production during early January was reported at 2.02mnt, up 21.2% from the previous ten days and +4.9% YoY. Meanwhile, local steel inventories rose 16.5% over the same period (-3.3% YoY). In our view, Beijing's efforts to bolster the economy via the real estate sector might boost local steel consumption in 2024, supporting steel products prices. To recap, China represents ~57% of global steel production
⛏First Quantum is suspending operations at its Ravensthorpe nickel mine for two years, as the asset was loss-making in 9mo23, the company reports. Operations are expected to resume in 18-24 months, once Ravensthorpe’s stockpiles have been sold. Although the mine produced 30kt last year (~1% of global Ni supply), it is to keep selling the metal’s inventories. Hence, the positive impact on nickel prices might be rather limited, in our view
#steel #nickel
https://metals-wire.com/news-reports
🔗CISA mills' daily crude steel production during early January was reported at 2.02mnt, up 21.2% from the previous ten days and +4.9% YoY. Meanwhile, local steel inventories rose 16.5% over the same period (-3.3% YoY). In our view, Beijing's efforts to bolster the economy via the real estate sector might boost local steel consumption in 2024, supporting steel products prices. To recap, China represents ~57% of global steel production
⛏First Quantum is suspending operations at its Ravensthorpe nickel mine for two years, as the asset was loss-making in 9mo23, the company reports. Operations are expected to resume in 18-24 months, once Ravensthorpe’s stockpiles have been sold. Although the mine produced 30kt last year (~1% of global Ni supply), it is to keep selling the metal’s inventories. Hence, the positive impact on nickel prices might be rather limited, in our view
#steel #nickel
https://metals-wire.com/news-reports