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
Morning Bites (part 4)
🪨Work has been suspended at BMA's Saraji open pit coking coal mine in Australia, following a fatal incident, Argus reports. The local government sent inspectors to investigate the vehicle incident. The Saraji mine produced 4.6mnt of coking coal in FY23 (1.4% of the global seaborne coking coal market in 2023, per IEA estimates). In our view, although operations might resume at Saraji soon, the news is likely to support global coking coal prices, as did a similar to the accident at BMA's Peak Downs mine in September 2023
#coal
https://metals-wire.com/sector/Coal
🪨Work has been suspended at BMA's Saraji open pit coking coal mine in Australia, following a fatal incident, Argus reports. The local government sent inspectors to investigate the vehicle incident. The Saraji mine produced 4.6mnt of coking coal in FY23 (1.4% of the global seaborne coking coal market in 2023, per IEA estimates). In our view, although operations might resume at Saraji soon, the news is likely to support global coking coal prices, as did a similar to the accident at BMA's Peak Downs mine in September 2023
#coal
https://metals-wire.com/sector/Coal
🗞Today, China has published its industrial production data 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 crude steel output fell 15% YoY in December, after the flat dynamics seen in November, materially lower YoY on the back of Beijing's plan to keep national output no higher than the 2022 levels, we believe. Meanwhile, local steel production might decrease to 950mnt in 2025 (-7% vs. 2023), per the CISA estimates. To recap, China represents ~57% of global steel supply
🏢Property sales in China declined 23% YoY in December vs. -21% YoY in November, and were also 55% below the 2020 levels. Meanwhile, floor space starts fell 12% YoY last month (+5% YoY in November), while personal mortgage loans were also down 23% YoY (-14% YoY in November). At the same time, property completions rose 13% YoY. Despite Beijing’s efforts to support the property sector, it remained broadly weak in 2023. However, new economic stimulus might bolster construction activity this year
#steel #property
https://metals-wire.com/sector/Steel
🔗China’s crude steel output fell 15% YoY in December, after the flat dynamics seen in November, materially lower YoY on the back of Beijing's plan to keep national output no higher than the 2022 levels, we believe. Meanwhile, local steel production might decrease to 950mnt in 2025 (-7% vs. 2023), per the CISA estimates. To recap, China represents ~57% of global steel supply
🏢Property sales in China declined 23% YoY in December vs. -21% YoY in November, and were also 55% below the 2020 levels. Meanwhile, floor space starts fell 12% YoY last month (+5% YoY in November), while personal mortgage loans were also down 23% YoY (-14% YoY in November). At the same time, property completions rose 13% YoY. Despite Beijing’s efforts to support the property sector, it remained broadly weak in 2023. However, new economic stimulus might bolster construction activity this year
#steel #property
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🇵🇪Peru’s copper output expanded 11% YoY in November, accelerating from the 2% YoY increase in October, per INEI data. On our numbers, local 11mo23 production was up ~14% YoY, which roughly meets the Peruvian government's plan to boost domestic Cu output 15% in 2023. Meanwhile, the country’s December 2023 comparison base will be higher, as Anglo American launched the Quellaveco copper mine in September 2022. Overall, in November, the joint production of Chile and Peru (~38% of global Cu supply) has only gained 3% YoY
To recap, Peru accounts for ~11% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
🇵🇪Peru’s copper output expanded 11% YoY in November, accelerating from the 2% YoY increase in October, per INEI data. On our numbers, local 11mo23 production was up ~14% YoY, which roughly meets the Peruvian government's plan to boost domestic Cu output 15% in 2023. Meanwhile, the country’s December 2023 comparison base will be higher, as Anglo American launched the Quellaveco copper mine in September 2022. Overall, in November, the joint production of Chile and Peru (~38% of global Cu supply) has only gained 3% YoY
To recap, Peru accounts for ~11% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 3)
💎Petra Diamonds reported a 9% YoY drop in revenues in fiscal 1H24 (ended Dec-23), driven by the 13% YoY decrease in LFL rough diamond prices. To recap, the miner’s LFL prices plunged 16-18% at Tender 2 (vs. Tender 1). On our numbers, global junior miners (including Petra) have been loss-making at spot since mid-2023, indicating the limited potential downside for rough prices. Hence, if rough diamond prices start to recover in the next 2-3 months, that would be a strong signal of an upcoming market turnaround, we believe. According to Petra CEO Richard Duffy, the company is seeing encouraging indications of a price recovery and some stabilisation in the rough diamond market, amid actions taken by both the upstream and the midstream
In addition, Petra has maintained its fiscal 2024 production guidance at 2.9-3.2mnct, while its fiscal 1H24 diamond output was up 2% YoY to 1.4mnct, following the ramp-up of the Williamson mine
#diamonds
https://metals-wire.com/sector/Diamonds
💎Petra Diamonds reported a 9% YoY drop in revenues in fiscal 1H24 (ended Dec-23), driven by the 13% YoY decrease in LFL rough diamond prices. To recap, the miner’s LFL prices plunged 16-18% at Tender 2 (vs. Tender 1). On our numbers, global junior miners (including Petra) have been loss-making at spot since mid-2023, indicating the limited potential downside for rough prices. Hence, if rough diamond prices start to recover in the next 2-3 months, that would be a strong signal of an upcoming market turnaround, we believe. According to Petra CEO Richard Duffy, the company is seeing encouraging indications of a price recovery and some stabilisation in the rough diamond market, amid actions taken by both the upstream and the midstream
In addition, Petra has maintained its fiscal 2024 production guidance at 2.9-3.2mnct, while its fiscal 1H24 diamond output was up 2% YoY to 1.4mnct, following the ramp-up of the Williamson mine
#diamonds
https://metals-wire.com/sector/Diamonds