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
Morning Bites (part 2)
📌China’s new internal combustion engine car sales dropped 24% YoY in February, after the +38% YoY seen in January. Meanwhile, the sales also remained below their pre-Covid level (-22% vs. February 2019), amid switching consumer interest toward EVs, which has continued to pressure PGM consumption. 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 fell 9% YoY in February, reversing from the 79% YoY increase in January. This was the first YoY decline since last year, but it has likely reflected the later start of the Lunar New Year (10 February in 2024 vs. 22 January in 2023). In our view, growing local interest for EVs might add further support to 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 dropped 24% YoY in February, after the +38% YoY seen in January. Meanwhile, the sales also remained below their pre-Covid level (-22% vs. February 2019), amid switching consumer interest toward EVs, which has continued to pressure PGM consumption. 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 fell 9% YoY in February, reversing from the 79% YoY increase in January. This was the first YoY decline since last year, but it has likely reflected the later start of the Lunar New Year (10 February in 2024 vs. 22 January in 2023). In our view, growing local interest for EVs might add further support to 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 1)
💎De Beers has reported sales of USD 430mn at its 2nd cycle in 2024, ~27% below the historical average (vs. -40% at the 1st cycle in 2024) and 14% softer YoY. According to company CEO Al Cook, the ongoing economic uncertainty in the US has led to conservative downstream restocking after the 2023 holiday season, while consumer demand for diamond jewellery remains sluggish in China. At the same time, De Beers expects the demand for rough diamonds to recover gradually in 2024
In our view, the still weak realised volumes imply that elevated levels of the industry’s inventories have not been unwound yet, despite De Beers' ~10% rough diamond price cut in early 2024. Meanwhile, we expect the global diamond market to show some recovery in the next 3-9 months
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 430mn at its 2nd cycle in 2024, ~27% below the historical average (vs. -40% at the 1st cycle in 2024) and 14% softer YoY. According to company CEO Al Cook, the ongoing economic uncertainty in the US has led to conservative downstream restocking after the 2023 holiday season, while consumer demand for diamond jewellery remains sluggish in China. At the same time, De Beers expects the demand for rough diamonds to recover gradually in 2024
In our view, the still weak realised volumes imply that elevated levels of the industry’s inventories have not been unwound yet, despite De Beers' ~10% rough diamond price cut in early 2024. Meanwhile, we expect the global diamond market to show some recovery in the next 3-9 months
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🏗China’s excavator sales declined 41% YoY in February (domestic + export), after the +19% YoY in January, according to the CCMA data. Meanwhile, the figure came in slightly below the CME estimates (-36% YoY). The sales also remained 55% weaker vs. the January 2021 level. In particular, domestic sales were down 49% YoY in February (-76% vs. Feb-21), reversing from the 58% YoY low base growth in January. However, record high liquidity inflows in China in early-2024, in addition to various new economic stimulus announced, might add support to the country’s depressed construction sector and, hence, raise the demand for industrial metals 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 excavator sales declined 41% YoY in February (domestic + export), after the +19% YoY in January, according to the CCMA data. Meanwhile, the figure came in slightly below the CME estimates (-36% YoY). The sales also remained 55% weaker vs. the January 2021 level. In particular, domestic sales were down 49% YoY in February (-76% vs. Feb-21), reversing from the 58% YoY low base growth in January. However, record high liquidity inflows in China in early-2024, in addition to various new economic stimulus announced, might add support to the country’s depressed construction sector and, hence, raise the demand for industrial metals 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
Morning Bites
🇵🇪 Peru’s copper production is set to grow 9% YoY to 3.0mnt in 2024, according to the country’s energy and mining minister, Romulo Mucho. Last year, local copper production showed a 13% YoY gain to a record high 2.76mnt, which was roughly in line with the Peruvian government's plan (+15% YoY). However, the new 3.0mnt outlook seems to us to be overly upbeat, as new major projects (e.g. Chalcobamba and Toromocho Expansion) are expected to launch only in 4Q24. Overall, the negative effect for copper prices might limited, as further growth in Peruvian output (~11% of the global Cu supply) is likely to be offset by structural challenges in Chile (~27%), as well as the recent Cobre Panama mine closure (2%)
In addition, top Chinese copper smelters have agreed to halt some loss-making facilities, which would mean additional support for the red metal’s price, in our view
#copper
https://metals-wire.com/sector/Copper
🇵🇪 Peru’s copper production is set to grow 9% YoY to 3.0mnt in 2024, according to the country’s energy and mining minister, Romulo Mucho. Last year, local copper production showed a 13% YoY gain to a record high 2.76mnt, which was roughly in line with the Peruvian government's plan (+15% YoY). However, the new 3.0mnt outlook seems to us to be overly upbeat, as new major projects (e.g. Chalcobamba and Toromocho Expansion) are expected to launch only in 4Q24. Overall, the negative effect for copper prices might limited, as further growth in Peruvian output (~11% of the global Cu supply) is likely to be offset by structural challenges in Chile (~27%), as well as the recent Cobre Panama mine closure (2%)
In addition, top Chinese copper smelters have agreed to halt some loss-making facilities, which would mean additional support for the red metal’s price, in our view
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
💎 India’s rough diamond net imports dropped 13% YoY in February, after the one-off 43% YoY growth in January. Meanwhile, Indian polished diamond net exports shrank 31% YoY (vs. the -26% YoY in January). Synthetic rough diamond net imports surged ~2x YoY, after +3% YoY in January. As such, the share of lab-grown net rough imports in diamond trading was 9% in February
Although diamond imports to India -- which accounts for more than 90% of world polished stone supply -- remained subdued in terms of value in February, the volumes recovered 8% YoY to 15.2mnct, which might be a leading indicator for recovery in the diamond sector, as we have previously suggested would happen. Meanwhile, the gradual improvement of consumer sentiment in the key US and Chinese markets (which jointly account for ~65% of the world's gem-set jewellery trade) might provide additional support to diamond demand, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India’s rough diamond net imports dropped 13% YoY in February, after the one-off 43% YoY growth in January. Meanwhile, Indian polished diamond net exports shrank 31% YoY (vs. the -26% YoY in January). Synthetic rough diamond net imports surged ~2x YoY, after +3% YoY in January. As such, the share of lab-grown net rough imports in diamond trading was 9% in February
Although diamond imports to India -- which accounts for more than 90% of world polished stone supply -- remained subdued in terms of value in February, the volumes recovered 8% YoY to 15.2mnct, which might be a leading indicator for recovery in the diamond sector, as we have previously suggested would happen. Meanwhile, the gradual improvement of consumer sentiment in the key US and Chinese markets (which jointly account for ~65% of the world's gem-set jewellery trade) might provide additional support to diamond demand, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🇿🇦South Africa’s PGM mining output gained 3% YoY in January, decelerating from the +9% YoY in December, according to official statistics. Meanwhile, the country’s gold production declined 13% YoY (vs. the -4% YoY in December). Although local PGM production remained slightly up on the annual basis in early 2024, we remind readers that major SA players Sibanye, Impala and Amplats have announced job cuts in response to the unfavourable market conditions. At the same time, the demand for PGMs remains subdued, amid inflationary pressures and the growing appetite for EVs globally
To recap, SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of global gold production
#PGMs #gold
https://metals-wire.com/news-reports
🇿🇦South Africa’s PGM mining output gained 3% YoY in January, decelerating from the +9% YoY in December, according to official statistics. Meanwhile, the country’s gold production declined 13% YoY (vs. the -4% YoY in December). Although local PGM production remained slightly up on the annual basis in early 2024, we remind readers that major SA players Sibanye, Impala and Amplats have announced job cuts in response to the unfavourable market conditions. At the same time, the demand for PGMs remains subdued, amid inflationary pressures and the growing appetite for EVs globally
To recap, SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of global gold production
#PGMs #gold
https://metals-wire.com/news-reports
Morning Bites (part 1)
🔗China’s crude steel output grew 2% YoY in January-February, after the 15% YoY drop in December. According to Reuters, the data came in above market expectations, as production had been assumed to decline during the low-demand period when many steelmakers carry out maintenance work. To recap, China represents ~57% of global steel supply
🏢China's property sales dropped 25% YoY in January-February (vs. -23% YoY in December), and were 35% below the 2021 level. Floor space starts were down 31% YoY (-45% vs. 2021) in the last two months, after the 12% YoY decline in December. Personal mortgage loans also came in 37% lower YoY (vs. -23% in December), while property completions fell 21% YoY (vs. +13% YoY in December). Although China’s real estate sector remains heavily depressed, record high liquidity injections in January might bolster local construction activity later in 2024, we believe
#steel #property
https://metals-wire.com/sector/Steel
🔗China’s crude steel output grew 2% YoY in January-February, after the 15% YoY drop in December. According to Reuters, the data came in above market expectations, as production had been assumed to decline during the low-demand period when many steelmakers carry out maintenance work. To recap, China represents ~57% of global steel supply
🏢China's property sales dropped 25% YoY in January-February (vs. -23% YoY in December), and were 35% below the 2021 level. Floor space starts were down 31% YoY (-45% vs. 2021) in the last two months, after the 12% YoY decline in December. Personal mortgage loans also came in 37% lower YoY (vs. -23% in December), while property completions fell 21% YoY (vs. +13% YoY in December). Although China’s real estate sector remains heavily depressed, record high liquidity injections in January might bolster local construction activity later in 2024, we believe
#steel #property
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🏦China’s aggregate financing was down 51% YoY in February to CNY 1.55tn, 30% lower than the consensus estimate, after the record high data seen in January. Meanwhile, traditional bank loans fell 20% YoY, after the broadly flat YoY dynamics in January (-4% vs. the consensus). According to Trading Economics, the latest inflows were rather weak, despite the actions of the Chinese authorities to support the economy (e.g. the cut in mortgage rates)
To recap, China accounts for 52% of global steel demand, as well as 55% and 58% of world copper and aluminium consumption, respectively
#global
https://metals-wire.com/news-reports
🏦China’s aggregate financing was down 51% YoY in February to CNY 1.55tn, 30% lower than the consensus estimate, after the record high data seen in January. Meanwhile, traditional bank loans fell 20% YoY, after the broadly flat YoY dynamics in January (-4% vs. the consensus). According to Trading Economics, the latest inflows were rather weak, despite the actions of the Chinese authorities to support the economy (e.g. the cut in mortgage rates)
To recap, China accounts for 52% of global steel demand, as well as 55% and 58% of world copper and aluminium consumption, respectively
#global
https://metals-wire.com/news-reports
👍1
🗞Today, China has published its industrial production data for January-February (see table above)
#statistics #China
https://metals-wire.com/news-reports
#statistics #China
https://metals-wire.com/news-reports
👍1
Morning Bites
🏭Some Chinese steel mills have delayed restarting their production after the Lunar New Year holidays, due to weaker than expected local demand, poor margins and high producer inventories, SteelOrbis reports. As such, in early-March, the Yunnan Association issued a plan to cut monthly output by 0.5mnt (~40% of its production and ~0.6% of Chinese output). Similarly, Guangdong and Shandong (top-10 steelmaking provinces) have also issued suspension plans. Although China’s steel sector sentiment remains subdued following weak real estate market data, record high liquidity injections in early 2024 and Beijing’s recently announced new economic support measures might trigger a recovery in domestic construction activity this year, we believe
To recap: Chinese steel production is expected 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
🏭Some Chinese steel mills have delayed restarting their production after the Lunar New Year holidays, due to weaker than expected local demand, poor margins and high producer inventories, SteelOrbis reports. As such, in early-March, the Yunnan Association issued a plan to cut monthly output by 0.5mnt (~40% of its production and ~0.6% of Chinese output). Similarly, Guangdong and Shandong (top-10 steelmaking provinces) have also issued suspension plans. Although China’s steel sector sentiment remains subdued following weak real estate market data, record high liquidity injections in early 2024 and Beijing’s recently announced new economic support measures might trigger a recovery in domestic construction activity this year, we believe
To recap: Chinese steel production is expected 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
🇵🇪Peru’s copper output inched down 1% YoY in January, reversing the revised +1% YoY in December, according to MINEM data. Meanwhile, the joint production of Chile and Peru (~38% of global Cu supply) was flat YoY in January. We note that the Peruvian government plans to boost domestic Cu output by another 9% YoY in 2024, after the +13% YoY in 2023. In our view, this outlook is rather bullish, as key projects are to be launched in late-2024. The negative effect for copper prices, however, might be limited, as further growth in Peruvian output is likely to be offset by various issues in other regions: e.g., ore grade depletion in Chile and the recent closure of Cobre Panama mine (2% of global mined Cu supply)
Peru standalone accounts for ~12% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
🇵🇪Peru’s copper output inched down 1% YoY in January, reversing the revised +1% YoY in December, according to MINEM data. Meanwhile, the joint production of Chile and Peru (~38% of global Cu supply) was flat YoY in January. We note that the Peruvian government plans to boost domestic Cu output by another 9% YoY in 2024, after the +13% YoY in 2023. In our view, this outlook is rather bullish, as key projects are to be launched in late-2024. The negative effect for copper prices, however, might be limited, as further growth in Peruvian output is likely to be offset by various issues in other regions: e.g., ore grade depletion in Chile and the recent closure of Cobre Panama mine (2% of global mined Cu supply)
Peru standalone accounts for ~12% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
🏭Global primary aluminium output jumped 3.9% YoY in February, after the revised +2.7% YoY in January, the International Aluminium Institute reports. Specifically, China’s output (58% of global Al supply) increased 3.8% YoY. Meanwhile, according to Reuters, market participants expect China’s output to also gain in March, when the power supply seasonally improves. In our view, a recovery of construction activity in China (~58% of global Al demand in 2022), driven by record high liquidity injections in early-2024, remains the major possible trigger for subdued Al prices (with >50% of global Al suppliers breakeven or loss-making at current prices, on our numbers)
According to market estimates, if new projects start up in 3Q24 as planned, China’s aluminium supply is set to rise >2.5% YoY to 42.7mnt this year
#aluminium
https://metals-wire.com/sector/Aluminium
🏭Global primary aluminium output jumped 3.9% YoY in February, after the revised +2.7% YoY in January, the International Aluminium Institute reports. Specifically, China’s output (58% of global Al supply) increased 3.8% YoY. Meanwhile, according to Reuters, market participants expect China’s output to also gain in March, when the power supply seasonally improves. In our view, a recovery of construction activity in China (~58% of global Al demand in 2022), driven by record high liquidity injections in early-2024, remains the major possible trigger for subdued Al prices (with >50% of global Al suppliers breakeven or loss-making at current prices, on our numbers)
According to market estimates, if new projects start up in 3Q24 as planned, China’s aluminium supply is set to rise >2.5% YoY to 42.7mnt this year
#aluminium
https://metals-wire.com/sector/Aluminium
Morning Bites (part 2)
💍Signet same-store sales dropped 9.6% YoY in 4Q23 (November-January), broadly in line with the 3Q23 dynamics. Specifically, same-store sales in North America shrank 10.0% YoY (-12.3% YoY in the previous quarter); proceeds from the international segment were down 1.0% YoY (-4.6% YoY in 3Q23). According to Signet CEO Virginia Drosos, the company expects some improvement in same-store sales over FY25 (ends in January-2025), as engagements gradually recover, but total sales are seen falling 2-5% YoY
In our view, the gradual improvement of consumer sentiment in the key US and Chinese markets (which jointly account for ~65% of the world's gem-set jewellery trade) might provide additional support to diamond demand, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💍Signet same-store sales dropped 9.6% YoY in 4Q23 (November-January), broadly in line with the 3Q23 dynamics. Specifically, same-store sales in North America shrank 10.0% YoY (-12.3% YoY in the previous quarter); proceeds from the international segment were down 1.0% YoY (-4.6% YoY in 3Q23). According to Signet CEO Virginia Drosos, the company expects some improvement in same-store sales over FY25 (ends in January-2025), as engagements gradually recover, but total sales are seen falling 2-5% YoY
In our view, the gradual improvement of consumer sentiment in the key US and Chinese markets (which jointly account for ~65% of the world's gem-set jewellery trade) might provide additional support to diamond demand, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🚘EU + UK passenger car registrations rose 10% YoY in February, roughly in line with the 11% YoY growth in January. The dynamics also matched our estimates. Meanwhile, sales were still 13% below the pre-COVID, 2019 level. We reiterate our view that EU car sales are likely to remain sluggish in the near future, given the weak local economic activity (as indicated by the EU PMI remaining <50) and persistent inflationary pressures in the region, which is a negative factor for PGM consumption
To recap, the EU+UK accounted for some 20% and 32% of world autocatalyst Pd and Pt demand, respectively, in 2022
#cars
https://metals-wire.com/sector/PGM
🚘EU + UK passenger car registrations rose 10% YoY in February, roughly in line with the 11% YoY growth in January. The dynamics also matched our estimates. Meanwhile, sales were still 13% below the pre-COVID, 2019 level. We reiterate our view that EU car sales are likely to remain sluggish in the near future, given the weak local economic activity (as indicated by the EU PMI remaining <50) and persistent inflationary pressures in the region, which is a negative factor for PGM consumption
To recap, the EU+UK accounted for some 20% and 32% of world autocatalyst Pd and Pt demand, respectively, in 2022
#cars
https://metals-wire.com/sector/PGM