Morning Bites (part 1)
🔗CISA mills' daily crude steel production during mid-February was reported at 2.10mnt, up 1.5% vs. the previous ten days, and 0.4% higher YoY. Local steel inventories recovered 25.7% over the period (-2.8% YoY), after the sharp decline in late January, amid seasonally soft demand during the Chinese New Year holidays (10-17 February). Meanwhile, record high liquidity injections in early 2024 and Beijing’s further efforts to bolster domestic construction activity might support steel products prices this year, we believe
According to CISA estimates, Chinese steel production is set to decline 7% vs. 2023 in 2025, which could affect ~4% of global steel supply, bolstering prices in the medium term. China represents ~57% of world steel output
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during mid-February was reported at 2.10mnt, up 1.5% vs. the previous ten days, and 0.4% higher YoY. Local steel inventories recovered 25.7% over the period (-2.8% YoY), after the sharp decline in late January, amid seasonally soft demand during the Chinese New Year holidays (10-17 February). Meanwhile, record high liquidity injections in early 2024 and Beijing’s further efforts to bolster domestic construction activity might support steel products prices this year, we believe
According to CISA estimates, Chinese steel production is set to decline 7% vs. 2023 in 2025, which could affect ~4% of global steel supply, bolstering prices in the medium term. China represents ~57% of world steel output
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🥉Global mined copper production increased 0.5% YoY in 2023, reaching 22.1mnt, the International Copper Study Group reports. For December, output fell 1.7% YoY (vs. the +1.1% YoY in November). Although the global 2023 copper production saw significant growth in Peru and D.R. Congo, these dynamics were largely offset by operational constraints in Chile, China, Indonesia, Panama and the US. Furthermore, a recently announced closure of the major Cobre Panama mine by mid-2024 (~2% of global Cu supply), driven by continuous social unrest, might add some stress to the red metal supply in 2024, we believe
As of the end-January 2024, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 217kt (-9.6% YoY), <1% of global refined copper usage in 2023, also equivalent to ~3 days of consumption (vs. ~9 days in 2010-2020)
#copper
https://metals-wire.com/sector/Copper
🥉Global mined copper production increased 0.5% YoY in 2023, reaching 22.1mnt, the International Copper Study Group reports. For December, output fell 1.7% YoY (vs. the +1.1% YoY in November). Although the global 2023 copper production saw significant growth in Peru and D.R. Congo, these dynamics were largely offset by operational constraints in Chile, China, Indonesia, Panama and the US. Furthermore, a recently announced closure of the major Cobre Panama mine by mid-2024 (~2% of global Cu supply), driven by continuous social unrest, might add some stress to the red metal supply in 2024, we believe
As of the end-January 2024, copper stocks held at the major metal exchanges (LME, COMEX, SHFE) totalled 217kt (-9.6% YoY), <1% of global refined copper usage in 2023, also equivalent to ~3 days of consumption (vs. ~9 days in 2010-2020)
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 3)
💎 De Beers' rough diamond sales fell 40% YoY in 2023 to USD 3.6bn, according to the company's report. Specifically, the miner's rough volumes sold dropped 19% YoY to 24.7mnct, with the average realised price down 25% YoY to USD 147/ct, reflecting an overall worsening of the mix and a 6% decrease in the rough diamond index. Regarding the outlook for 2024, De Beers expects market conditions to remain challenging in the short term, but anticipates the high midstream inventory levels seen in 2023 to decline gradually in 2024 as retailers replenish their stocks. Furthermore, the miner estimates that consumer demand, which is currently stressed, will return to growth into 2025
Overall, the news underpins our view that the global diamond market might remain stressed for the next 3-9 months amid the industry's still elevated inventories
#diamonds
https://metals-wire.com/sector/Diamonds
💎 De Beers' rough diamond sales fell 40% YoY in 2023 to USD 3.6bn, according to the company's report. Specifically, the miner's rough volumes sold dropped 19% YoY to 24.7mnct, with the average realised price down 25% YoY to USD 147/ct, reflecting an overall worsening of the mix and a 6% decrease in the rough diamond index. Regarding the outlook for 2024, De Beers expects market conditions to remain challenging in the short term, but anticipates the high midstream inventory levels seen in 2023 to decline gradually in 2024 as retailers replenish their stocks. Furthermore, the miner estimates that consumer demand, which is currently stressed, will return to growth into 2025
Overall, the news underpins our view that the global diamond market might remain stressed for the next 3-9 months amid the industry's still elevated inventories
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🏭Global primary aluminium output increased 2.4% YoY in January, after the +2.1% YoY in December, the International Aluminium Institute reports. Specifically, China’s output (59% of global Al output) rose 2.8% YoY, following the improved power supply in previously drought-hit parts of the country's hydro-electric system. In our view, potential recovery in construction activity in China (~58% of global primary Al demand in 2022), bolstered by new economic stimulus and record high liquidity injections in early-2024, remains the key trigger for subdued Al prices (with >50% of global Al suppliers breakeven or loss-making at current prices, on our numbers)
To recap, China’s aluminium supply is to rise >2.5% YoY to 42.7mnt this year, according to industry participants, if new projects start up in 3Q24 as planned
#aluminium
https://metals-wire.com/sector/Aluminium
🏭Global primary aluminium output increased 2.4% YoY in January, after the +2.1% YoY in December, the International Aluminium Institute reports. Specifically, China’s output (59% of global Al output) rose 2.8% YoY, following the improved power supply in previously drought-hit parts of the country's hydro-electric system. In our view, potential recovery in construction activity in China (~58% of global primary Al demand in 2022), bolstered by new economic stimulus and record high liquidity injections in early-2024, remains the key trigger for subdued Al prices (with >50% of global Al suppliers breakeven or loss-making at current prices, on our numbers)
To recap, China’s aluminium supply is to rise >2.5% YoY to 42.7mnt this year, according to industry participants, if new projects start up in 3Q24 as planned
#aluminium
https://metals-wire.com/sector/Aluminium
Morning Bites (part 1)
📈Russia’s gold output increased 7.0% YoY in January, reversing from the -7.3% YoY in December, according to Rosstat data. Russia’s gold output was down 38.1% MoM, due to seasonal effects. Overall, we keep our positive outlook on gold price performance, as demand from global central banks remains solid, while high cost support levels and potentially lower key rates in the world's top economies (e.g. the EU and US) in 2024 are likely to add further support to the precious metal’s prices, in our view
To recap, Russia accounts for ~9% of the world's mined gold output
#gold
https://metals-wire.com/sector/Gold
📈Russia’s gold output increased 7.0% YoY in January, reversing from the -7.3% YoY in December, according to Rosstat data. Russia’s gold output was down 38.1% MoM, due to seasonal effects. Overall, we keep our positive outlook on gold price performance, as demand from global central banks remains solid, while high cost support levels and potentially lower key rates in the world's top economies (e.g. the EU and US) in 2024 are likely to add further support to the precious metal’s prices, in our view
To recap, Russia accounts for ~9% of the world's mined gold output
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
🪨India's annual coal demand is set to add 300mnt by 2030, implying some 25% growth vs. the 2023E level, Reuters reports, citing the Coaltrans India conference. To recap, India imported ~93mnt of coking coal last year (26% of global seaborne market), following exceptionally strong local steel output (~140mnt of steel in 2023, +12% YoY). Meanwhile, the Indian government is targeting a jump in domestic steel production up to 300mnt by 2030: although the forecast seems to us to be overly upbeat, further growth in Indian steel output would be a long-term positive factor for coking coal prices, in our view
#coal
https://metals-wire.com/sector/Coal
🪨India's annual coal demand is set to add 300mnt by 2030, implying some 25% growth vs. the 2023E level, Reuters reports, citing the Coaltrans India conference. To recap, India imported ~93mnt of coking coal last year (26% of global seaborne market), following exceptionally strong local steel output (~140mnt of steel in 2023, +12% YoY). Meanwhile, the Indian government is targeting a jump in domestic steel production up to 300mnt by 2030: although the forecast seems to us to be overly upbeat, further growth in Indian steel output would be a long-term positive factor for coking coal prices, in our view
#coal
https://metals-wire.com/sector/Coal
Morning Bites
🏗China’s preliminary excavator sales figures were down 36% YoY in February (domestic + export), after the one-off 19% YoY gain in January, per CME estimates. The figure was also 52% below the 2021 level. In particular, domestic excavator sales are set to decline 53% YoY (-78% vs. February 2021), remaining broadly flat MoM. The still subdued domestic sales suggest there is still no recovery in the stressed Chinese real estate sector -- and that there will not be in the near future. However, record high liquidity injections in early-2024 and Beijing’s recently announced new support measures for the economy might bolster domestic construction activity this year, 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 preliminary excavator sales figures were down 36% YoY in February (domestic + export), after the one-off 19% YoY gain in January, per CME estimates. The figure was also 52% below the 2021 level. In particular, domestic excavator sales are set to decline 53% YoY (-78% vs. February 2021), remaining broadly flat MoM. The still subdued domestic sales suggest there is still no recovery in the stressed Chinese real estate sector -- and that there will not be in the near future. However, record high liquidity injections in early-2024 and Beijing’s recently announced new support measures for the economy might bolster domestic construction activity this year, 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
Week ahead data releases in M&M
The reporting season is drawing to a close, but several major M&M names are due to release their 4Q/2Н23 financials this week. Generally, we are slightly more bullish than the consensus forecasts on the EBITDA level, except for Fresnillo and Ero Copper
We also await China’s official customs data for February, as well as monthly liquidity injections statistics
#reporting_season
https://metals-wire.com/events
The reporting season is drawing to a close, but several major M&M names are due to release their 4Q/2Н23 financials this week. Generally, we are slightly more bullish than the consensus forecasts on the EBITDA level, except for Fresnillo and Ero Copper
We also await China’s official customs data for February, as well as monthly liquidity injections statistics
#reporting_season
https://metals-wire.com/events
Morning Bites
🌏Global manufacturing PMIs remained broadly weak in February. The Eurozone Markit Manufacturing PMI was reported at 46.6, slightly above the 46.5 seen in January. The US ISM manufacturing PMI fell to 47.8, well below the market estimates of 49.5
🇨🇳The official NBS Manufacturing PMI in China was at 49.1 in February (vs. 49.2 in January), slightly below the consensus of 49.2. At the same time, the Caixin China Manufacturing PMI unexpectedly rose to 50.9 in February, ahead of the 50.6 estimates
❗️Overall, global PMIs remained well below 50.0, reflecting adverse sentiment in the manufacturing sector. Meanwhile, China’s record high liquidity injections in early 2024 and the new economic stimulus recently announced by Beijing might add support to the demand for industrial metals (e.g. steel, copper and aluminium) later this year, we believe
#PMIs
https://metals-wire.com/news-reports
🌏Global manufacturing PMIs remained broadly weak in February. The Eurozone Markit Manufacturing PMI was reported at 46.6, slightly above the 46.5 seen in January. The US ISM manufacturing PMI fell to 47.8, well below the market estimates of 49.5
🇨🇳The official NBS Manufacturing PMI in China was at 49.1 in February (vs. 49.2 in January), slightly below the consensus of 49.2. At the same time, the Caixin China Manufacturing PMI unexpectedly rose to 50.9 in February, ahead of the 50.6 estimates
❗️Overall, global PMIs remained well below 50.0, reflecting adverse sentiment in the manufacturing sector. Meanwhile, China’s record high liquidity injections in early 2024 and the new economic stimulus recently announced by Beijing might add support to the demand for industrial metals (e.g. steel, copper and aluminium) later this year, we believe
#PMIs
https://metals-wire.com/news-reports
Morning Bites (part 1)
💍Hong Kong jewellery and watch sales rose 25% YoY in January, decelerating from the +50% YoY in December, according to the government data. However, the strong dynamics were mostly due to the low base effect: HK’s border with the Mainland fully reopened in February 2023, a fact which we see limiting further YoY sales growth in the upcoming months. Meanwhile, if the sentiment remain strong on the key US and Chinese markets (jointly ~65% of the world's gem-set jewellery trade), this might speed up the industry's stock release and add support to the stressed diamond sector, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales rose 25% YoY in January, decelerating from the +50% YoY in December, according to the government data. However, the strong dynamics were mostly due to the low base effect: HK’s border with the Mainland fully reopened in February 2023, a fact which we see limiting further YoY sales growth in the upcoming months. Meanwhile, if the sentiment remain strong on the key US and Chinese markets (jointly ~65% of the world's gem-set jewellery trade), this might speed up the industry's stock release and add support to the stressed diamond sector, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
💎US jewellery sales growth slowed to <1% YoY in January, after the 6% YoY jump in December, IDEX reports, citing the US Department of Commerce. According to Rapaport, the US retail market remained seasonally quiet in early-2024. Despite some slowdown in local sales recovery, the potential decline in US Fed Funds rate in 2024 might bolster the consumer spending and accelerate the release of the industry's inventories, in our view
To recap, the US accounts for ~53% of world gem-set jewellery trade
#diamonds
https://metals-wire.com/sector/Diamonds
💎US jewellery sales growth slowed to <1% YoY in January, after the 6% YoY jump in December, IDEX reports, citing the US Department of Commerce. According to Rapaport, the US retail market remained seasonally quiet in early-2024. Despite some slowdown in local sales recovery, the potential decline in US Fed Funds rate in 2024 might bolster the consumer spending and accelerate the release of the industry's inventories, in our view
To recap, the US accounts for ~53% of world gem-set jewellery trade
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
🏦Global central banks accumulated net 39t of gold in January, accelerating from the revised +17t in December and marking the eighth consecutive increase in holdings, the World Gold Council reports. The main buyers were Turkey (12t), China (10t) and India (9t). Meanwhile, the only reported seller was Russia, which sold some 3t of gold. We keep our view that persistently strong demand from global central banks, miners' growing cash costs and market expectations of a US Fed Funds rate cut in 2024 are likely to provide further support to the precious metal's performance
#gold
https://metals-wire.com/sector/Gold
🏦Global central banks accumulated net 39t of gold in January, accelerating from the revised +17t in December and marking the eighth consecutive increase in holdings, the World Gold Council reports. The main buyers were Turkey (12t), China (10t) and India (9t). Meanwhile, the only reported seller was Russia, which sold some 3t of gold. We keep our view that persistently strong demand from global central banks, miners' growing cash costs and market expectations of a US Fed Funds rate cut in 2024 are likely to provide further support to the precious metal's performance
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
🚘US light vehicle sales rose 10% YoY in February, after the 3% YoY growth in January. February's figure was, however, still 4% lower than the pre-Covid 2019 level. Seasonally adjusted sales volumes jumped 7% YoY last month, but were also 4% below the February 2019 number. Although US car sales showed some recovery in early-2024, they remain soft compared with historical volumes, which might further weigh on the automotive demand for PGMs, especially amid growing appetite for EVs globally
We note that North America accounted for ~22% and ~16% of world autocatalyst Pd and Pt consumption, respectively, in 2022
#cars
https://metals-wire.com/news-reports
🚘US light vehicle sales rose 10% YoY in February, after the 3% YoY growth in January. February's figure was, however, still 4% lower than the pre-Covid 2019 level. Seasonally adjusted sales volumes jumped 7% YoY last month, but were also 4% below the February 2019 number. Although US car sales showed some recovery in early-2024, they remain soft compared with historical volumes, which might further weigh on the automotive demand for PGMs, especially amid growing appetite for EVs globally
We note that North America accounted for ~22% and ~16% of world autocatalyst Pd and Pt consumption, respectively, in 2022
#cars
https://metals-wire.com/news-reports
🗞Today, China published its preliminary import/export statistics for January-February (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 finished steel net exports jumped 35% YoY in January-February, decelerating from the 50% YoY growth in December. Meanwhile, we remind readers that China has recently posted strong liquidity injections data for January (historically, the most important month), which might bolster domestic construction activity and, hence, the demand for steel in 2024
🪨China’s coal imports rose 23% YoY in January-February, following the 53% YoY spike in December. The figure was likely supported by some stock replenishment after the cold wave in late-2023 and consumer efforts to stock up before the new import tariffs took effect in January 2024. As a recap, China restored coal import tariffs of 3-6% on countries without two-way free trade pacts (applies largely to key suppliers Mongolia and Russia), which might add some support to coal prices this year
#coal #steel
https://metals-wire.com/news-reports
🔗China’s finished steel net exports jumped 35% YoY in January-February, decelerating from the 50% YoY growth in December. Meanwhile, we remind readers that China has recently posted strong liquidity injections data for January (historically, the most important month), which might bolster domestic construction activity and, hence, the demand for steel in 2024
🪨China’s coal imports rose 23% YoY in January-February, following the 53% YoY spike in December. The figure was likely supported by some stock replenishment after the cold wave in late-2023 and consumer efforts to stock up before the new import tariffs took effect in January 2024. As a recap, China restored coal import tariffs of 3-6% on countries without two-way free trade pacts (applies largely to key suppliers Mongolia and Russia), which might add some support to coal prices this year
#coal #steel
https://metals-wire.com/news-reports
Morning Bites (part 2)
🔗CISA mills daily crude steel production for late February was reported at 2.13mnt, up 1.4% from the previous ten days, but down 4.1% YoY. Meanwhile, local steel inventories were 5.1% lower over the period (+3.4% YoY). In our view, Beijing's efforts to support the local economy via the real estate sector could bolster domestic construction activity in 2024
To recap, China represents ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills daily crude steel production for late February was reported at 2.13mnt, up 1.4% from the previous ten days, but down 4.1% YoY. Meanwhile, local steel inventories were 5.1% lower over the period (+3.4% YoY). In our view, Beijing's efforts to support the local economy via the real estate sector could bolster domestic construction activity in 2024
To recap, China represents ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 3)
🚘New car registrations in France, the UK, Spain, Italy and Germany were up 10% YoY in February, after the 17% YoY jump in January, but remained well below the pre-COVID level (-18% vs. February 2019). In particular, in Germany and Spain, car sales were both 23% below February 2019 levels, while registrations in France were 32% weaker. However, sales in Italy were 5% above the 2019 figures, while UK sales were 4% stronger
Given that these five countries represented >70% of new vehicle registrations in Europe in 2023, 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 were up 10% YoY in February, after the 17% YoY jump in January, but remained well below the pre-COVID level (-18% vs. February 2019). In particular, in Germany and Spain, car sales were both 23% below February 2019 levels, while registrations in France were 32% weaker. However, sales in Italy were 5% above the 2019 figures, while UK sales were 4% stronger
Given that these five countries represented >70% of new vehicle registrations in Europe in 2023, 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 1)
📉Gold-backed ETFs sold net 49t of gold in February, after the -51t seen in January, marking the ninth consecutive month of declines in holdings, the World Gold Council reports. Specifically, American and European funds have sold 37t and 15t, respectively, with only a minor positive inflow of 3t in Asia. Overall, since June 2023, global ETFs gold reserves shrank 350t (~10% of annualised physical gold demand in 2023). Although ETFs sales remain one of the key factors pressuring gold prices, potentially lower US Fed funds rate in 2024 and the growing cash costs for miners are likely to push the gold price higher this year, we believe
#ETF #gold
https://metals-wire.com/sector/Gold
📉Gold-backed ETFs sold net 49t of gold in February, after the -51t seen in January, marking the ninth consecutive month of declines in holdings, the World Gold Council reports. Specifically, American and European funds have sold 37t and 15t, respectively, with only a minor positive inflow of 3t in Asia. Overall, since June 2023, global ETFs gold reserves shrank 350t (~10% of annualised physical gold demand in 2023). Although ETFs sales remain one of the key factors pressuring gold prices, potentially lower US Fed funds rate in 2024 and the growing cash costs for miners are likely to push the gold price higher this year, we believe
#ETF #gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
🏦 The PBoC purchased a further 12t of gold in February (~3% of 2023 gold demand, in annualised terms), after the +10t in January, which marked the 16th consecutive month of reserves accumulation. Hence, the PBoC's gold holdings now stand at 2,257t, with ~309t added since November 2022 (5% of annualised demand). Overall, given the strong demand from global central banks, as well as miners’ rising cash costs and potentially lower key rates in leading economies in 2024 (e.g., the US and EU), we maintain our bullish view on the performance of gold prices
#gold
https://metals-wire.com/sector/Gold
🏦 The PBoC purchased a further 12t of gold in February (~3% of 2023 gold demand, in annualised terms), after the +10t in January, which marked the 16th consecutive month of reserves accumulation. Hence, the PBoC's gold holdings now stand at 2,257t, with ~309t added since November 2022 (5% of annualised demand). Overall, given the strong demand from global central banks, as well as miners’ rising cash costs and potentially lower key rates in leading economies in 2024 (e.g., the US and EU), we maintain our bullish view on the performance of gold prices
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 1)
🇨🇱Chile’s copper output remained flat YoY in January, in line with the December dynamics and staying near the historical lows, according to the INE data. Overall, the ongoing drought and unfavourable structural issues (such as grade depletion) continue to pressure the Chilean mining industry, which accounts for ~27% of global copper supply. Therefore, were the adverse factors in the world's top copper producing country to persist, in addition to the recently halted operations at Cobre Panama mine (~2% of international copper supply), this might add further support to the red metal’s prices, we believe
#copper
https://metals-wire.com/sector/Copper
🇨🇱Chile’s copper output remained flat YoY in January, in line with the December dynamics and staying near the historical lows, according to the INE data. Overall, the ongoing drought and unfavourable structural issues (such as grade depletion) continue to pressure the Chilean mining industry, which accounts for ~27% of global copper supply. Therefore, were the adverse factors in the world's top copper producing country to persist, in addition to the recently halted operations at Cobre Panama mine (~2% of international copper supply), this might add further support to the red metal’s prices, we believe
#copper
https://metals-wire.com/sector/Copper