Morning Bites (part 1)
🔗China’s crude steel output dropped 8% YoY in March, after the +2% YoY in January-February. Output slid amid the subdued domestic demand, which has also triggered a surge in Chinese steel exports. To recap, China represents ~57% of global steel supply
🏢China's property sales fell 24% YoY in March (vs. the -25% YoY in January-February), to the lowest point in the last eight years, being 39% below the 2021 level. Floor space starts were down 26% YoY (-59% vs. 2021) in March, after the 31% YoY decline in January-February. Personal mortgage loans also came in 47% lower YoY (vs. -37% in January-February), while property completions fell 22% YoY (vs. -21% YoY). Despite the continuous slowdown in China’s property sector, record high liquidity inflows in early 2024 might bolster its recovery this year, we believe
#steel #property
https://metals-wire.com/sector/Steel
🔗China’s crude steel output dropped 8% YoY in March, after the +2% YoY in January-February. Output slid amid the subdued domestic demand, which has also triggered a surge in Chinese steel exports. To recap, China represents ~57% of global steel supply
🏢China's property sales fell 24% YoY in March (vs. the -25% YoY in January-February), to the lowest point in the last eight years, being 39% below the 2021 level. Floor space starts were down 26% YoY (-59% vs. 2021) in March, after the 31% YoY decline in January-February. Personal mortgage loans also came in 47% lower YoY (vs. -37% in January-February), while property completions fell 22% YoY (vs. -21% YoY). Despite the continuous slowdown in China’s property sector, record high liquidity inflows in early 2024 might bolster its recovery this year, we believe
#steel #property
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
📌China’s new internal combustion engine car sales grew 1% YoY in March, after the one-off 24% YoY decline in February. However, the numbers remained below their pre-Covid level (-24% vs. March 2019), amid the strong appetite for EVs, which continues to pressure local 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 surged 35% YoY in March, after the weak -9% YoY dynamics in February. In our view, high Chinese EV sales might further support the consumption of the battery metals basket (i.e. cobalt, lithium and nickel), as China has accounted for ~60% of global EV demand in 2023
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
📌China’s new internal combustion engine car sales grew 1% YoY in March, after the one-off 24% YoY decline in February. However, the numbers remained below their pre-Covid level (-24% vs. March 2019), amid the strong appetite for EVs, which continues to pressure local 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 surged 35% YoY in March, after the weak -9% YoY dynamics in February. In our view, high Chinese EV sales might further support the consumption of the battery metals basket (i.e. cobalt, lithium and nickel), as China has accounted for ~60% of global EV demand in 2023
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
Morning Bites (part 1)
💎De Beers has reported sales of USD 445mn at its 3rd cycle in 2024, ~19% below the historical average (vs. -26% at the 2nd cycle in 2024) and 18% softer YoY. Per the company's CEO Al Cook, many clients are maintaining a cautious approach to purchases, given uncertain macroeconomic conditions globally and slow retail sales in China. In our view, persistently soft De Beers' sales imply that the industry’s elevated inventory has not yet been unwound. Meanwhile, we expect the global diamond market to gradually recover in the next ~6 months
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 445mn at its 3rd cycle in 2024, ~19% below the historical average (vs. -26% at the 2nd cycle in 2024) and 18% softer YoY. Per the company's CEO Al Cook, many clients are maintaining a cautious approach to purchases, given uncertain macroeconomic conditions globally and slow retail sales in China. In our view, persistently soft De Beers' sales imply that the industry’s elevated inventory has not yet been unwound. Meanwhile, we expect the global diamond market to gradually recover in the next ~6 months
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
💍LVMH's organic sales of watches and jewellery slid 2% YoY in 1Q24, marking the first decline since 2021, according to the company's report. The segment's total sales were down 5% YoY in 1Q24
🇨🇳 Chow Tai Fook’s 1Q24 LFL sales slid 22% YoY in the gem-set, platinum and K-gold jewellery segment (vs. the flat dynamics in 4Q23), according to the company‘s press release. Sales in the gem-set segment in Mainland China shrank 20% YoY (vs. -2% YoY in 4Q23), while HK and Macau sales dropped 27% YoY, reversing from the +4% YoY in the previous quarter
Despite the slowdown in retailers’ 1Q24 sales, the widely expected US Fed funds rate cut in 2024 might trigger a recovery on the key US and Chinese downstream diamond markets (jointly representing ~65% of the world's gem-set jewellery trade), we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💍LVMH's organic sales of watches and jewellery slid 2% YoY in 1Q24, marking the first decline since 2021, according to the company's report. The segment's total sales were down 5% YoY in 1Q24
🇨🇳 Chow Tai Fook’s 1Q24 LFL sales slid 22% YoY in the gem-set, platinum and K-gold jewellery segment (vs. the flat dynamics in 4Q23), according to the company‘s press release. Sales in the gem-set segment in Mainland China shrank 20% YoY (vs. -2% YoY in 4Q23), while HK and Macau sales dropped 27% YoY, reversing from the +4% YoY in the previous quarter
Despite the slowdown in retailers’ 1Q24 sales, the widely expected US Fed funds rate cut in 2024 might trigger a recovery on the key US and Chinese downstream diamond markets (jointly representing ~65% of the world's gem-set jewellery trade), we believe
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
💎 India’s rough diamond net imports declined 16% YoY in March, following the -13% YoY in February. Meanwhile, India’s polished diamond net exports were down 31% YoY, the same as in February. Synthetic rough diamond net imports slid 13% YoY, after the 107% YoY jump in February. The share of lab-grown net rough imports in total trading stood at 6% in March
We note India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India’s rough diamond net imports declined 16% YoY in March, following the -13% YoY in February. Meanwhile, India’s polished diamond net exports were down 31% YoY, the same as in February. Synthetic rough diamond net imports slid 13% YoY, after the 107% YoY jump in February. The share of lab-grown net rough imports in total trading stood at 6% in March
We note India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
🔗CISA mills daily crude steel production in early-April was reported at 2.11mnt, down 0.5% from the previous ten days, and -9.1% YoY. Meanwhile, local steel inventories were 0.9% lower over the period (and -0.4% YoY). In our view, China’s subdued production (based on CISA data, -1.0% YoY since January 2024) reflects sluggish domestic steel demand, which has also triggered growth in exports. Record high liquidity inflows in early 2024, however, might bolster China’s construction recovery this year (and, hence, steel demand), in our view
China represents ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills daily crude steel production in early-April was reported at 2.11mnt, down 0.5% from the previous ten days, and -9.1% YoY. Meanwhile, local steel inventories were 0.9% lower over the period (and -0.4% YoY). In our view, China’s subdued production (based on CISA data, -1.0% YoY since January 2024) reflects sluggish domestic steel demand, which has also triggered growth in exports. Record high liquidity inflows in early 2024, however, might bolster China’s construction recovery this year (and, hence, steel demand), in our view
China represents ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🇵🇪 Peru’s copper output jumped 13% YoY in February, reversing from the 1% YoY decline in January, mainly due to the ramp-up of Glencore’s Antapaccay mine and Anglo American’s Quellaveco mine, according to MINEM data. We remind readers that the Peruvian government plans to boost domestic Cu output by another 9% YoY in 2024, after the +13% YoY in 2023. Meanwhile, the joint production of Chile and Peru (~38% of global Cu supply) rose 11% YoY in February, marking the sharpest increase since 2021
Peru standalone accounts for ~12% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
🇵🇪 Peru’s copper output jumped 13% YoY in February, reversing from the 1% YoY decline in January, mainly due to the ramp-up of Glencore’s Antapaccay mine and Anglo American’s Quellaveco mine, according to MINEM data. We remind readers that the Peruvian government plans to boost domestic Cu output by another 9% YoY in 2024, after the +13% YoY in 2023. Meanwhile, the joint production of Chile and Peru (~38% of global Cu supply) rose 11% YoY in February, marking the sharpest increase since 2021
Peru standalone accounts for ~12% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
Alcoa 1Q24 results — EBITDA beats consensus, but is in line with us
✏️Alcoa's 1Q24 revenues were slightly ahead of the consensus and us (+2% and +5%, respectively). Although EBITDA came in 17% ahead of the consensus (but in-line with us), it remained >75% lower than the 2022 avg., due to the subdued Al prices in early-2024 and high EU energy costs
🔮 The company has maintained production outlook for 2024: 9.8-10.0mnt for alumina (-9% YoY), with shipments of 12.7-12.9mnt (flat YoY). Aluminium output is seen at 2.2-2.3mnt in 2024 (+6% YoY), with shipments at 2.5-2.6mnt (+2% YoY)
❗️At spot, we expect Alcoa’s 2Q24F EBITDA to substantially improve QoQ (>2x growth), driven by the recent recovery in aluminium prices (which are currently ~10% higher than the 1Q24 avg.)
#AA #Aluminium
https://metals-wire.com/company/AA_U
✏️Alcoa's 1Q24 revenues were slightly ahead of the consensus and us (+2% and +5%, respectively). Although EBITDA came in 17% ahead of the consensus (but in-line with us), it remained >75% lower than the 2022 avg., due to the subdued Al prices in early-2024 and high EU energy costs
🔮 The company has maintained production outlook for 2024: 9.8-10.0mnt for alumina (-9% YoY), with shipments of 12.7-12.9mnt (flat YoY). Aluminium output is seen at 2.2-2.3mnt in 2024 (+6% YoY), with shipments at 2.5-2.6mnt (+2% YoY)
❗️At spot, we expect Alcoa’s 2Q24F EBITDA to substantially improve QoQ (>2x growth), driven by the recent recovery in aluminium prices (which are currently ~10% higher than the 1Q24 avg.)
#AA #Aluminium
https://metals-wire.com/company/AA_U
Morning Bites (part 1)
🚘EU + UK passenger car registrations decreased 2% YoY in March, after the 10% YoY growth in February. The dynamics were slightly weaker than we had anticipated (flat YoY). Meanwhile, the sales remained 22% below their pre-COVID, 2019 level. We maintain our view that EU car sales are likely to remain subdued in the near future, following slow local economic activity (as indicated by the EU PMI still <50) and persistent inflationary pressures in the region, which continue to weigh on 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 decreased 2% YoY in March, after the 10% YoY growth in February. The dynamics were slightly weaker than we had anticipated (flat YoY). Meanwhile, the sales remained 22% below their pre-COVID, 2019 level. We maintain our view that EU car sales are likely to remain subdued in the near future, following slow local economic activity (as indicated by the EU PMI still <50) and persistent inflationary pressures in the region, which continue to weigh on 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
Morning Bites (part 2)
💎Petra Diamonds’ LFL rough prices at its auction number 5 remained broadly flat (-1%) vs. Tender 4, as follows from Petra’s press release. The miner’s LFL prices for >2ct stones remained solid, while smaller goods showed some seasonal weakness. However, average LFL prices at the 1-5 tenders of fiscal 2024 (July 2023 - March 2024) were still 9% lower YoY
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 global diamond market, which is expected to show the first signs of a recovery in the next ~6 months, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💎Petra Diamonds’ LFL rough prices at its auction number 5 remained broadly flat (-1%) vs. Tender 4, as follows from Petra’s press release. The miner’s LFL prices for >2ct stones remained solid, while smaller goods showed some seasonal weakness. However, average LFL prices at the 1-5 tenders of fiscal 2024 (July 2023 - March 2024) were still 9% lower YoY
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 global diamond market, which is expected to show the first signs of a recovery in the next ~6 months, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
Week ahead data releases in M&M
This week, many global M&M names are due to report their 1Q24 financials. We believe that the consensus is slightly too bearish in its EBITDA forecasts for large miners, such as Vale, Freeport and Newmont
#reporting_season
https://metals-wire.com/events
This week, many global M&M names are due to report their 1Q24 financials. We believe that the consensus is slightly too bearish in its EBITDA forecasts for large miners, such as Vale, Freeport and Newmont
#reporting_season
https://metals-wire.com/events
Morning Bites
🚗💨Internal combustion engine (ICE) car registrations in Europe declined 4% YoY in 1Q24, after the 1% YoY growth in 4Q23. Petrol car sales decreased 1% YoY (vs. +6% YoY in 4Q23), while diesel cars were down 11% YoY. Diesel cars accounted for 24% of total ICE car registrations (also 24% in 4Q23). Overall, the figures remain far below the 2019 levels, weighing on PGM demand. To recap, the EU represents 20% and 31% of global Pd and Pt autocatalyst demand, respectively
🚘 EV sales in Europe increased 6% YoY in 1Q24, after the -9% YoY in 4Q23. Specifically, BEV sales gained 3% YoY (vs. -4% YoY in 4Q23), while PHEV sales rose 11% YoY. The share of BEVs in total EV sales was 64% (67% in 4Q23). BEV sales in Germany (~20% of total EV sales in Europe) were down 14% YoY in 1Q24, likely amid incentives cut. Growing global interest for EVs, however, is likely to further drive up the demand for the battery metals (e.g. Ni, Li and cobalt)
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
🚗💨Internal combustion engine (ICE) car registrations in Europe declined 4% YoY in 1Q24, after the 1% YoY growth in 4Q23. Petrol car sales decreased 1% YoY (vs. +6% YoY in 4Q23), while diesel cars were down 11% YoY. Diesel cars accounted for 24% of total ICE car registrations (also 24% in 4Q23). Overall, the figures remain far below the 2019 levels, weighing on PGM demand. To recap, the EU represents 20% and 31% of global Pd and Pt autocatalyst demand, respectively
🚘 EV sales in Europe increased 6% YoY in 1Q24, after the -9% YoY in 4Q23. Specifically, BEV sales gained 3% YoY (vs. -4% YoY in 4Q23), while PHEV sales rose 11% YoY. The share of BEVs in total EV sales was 64% (67% in 4Q23). BEV sales in Germany (~20% of total EV sales in Europe) were down 14% YoY in 1Q24, likely amid incentives cut. Growing global interest for EVs, however, is likely to further drive up the demand for the battery metals (e.g. Ni, Li and cobalt)
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
Morning Bites
🏭Global primary aluminium output increased 3.5% YoY in March, decelerating from the revised +6.2% YoY in February, the International Aluminium Institute reports. Specifically, China’s production (59% of global Al output) rose 4.9% YoY, following the improved power supply in previously drought-hit parts of the country's hydro-electric system. Despite the increasing supply globally, the potential recovery in construction activity in China (~58% of global primary Al demand in 2022), bolstered by the new economic stimulus and record high liquidity injections in early 2024, might provide additional support to Al prices (which have recently recovered >15% from early 2024)
To recap, China’s aluminium supply might 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 3.5% YoY in March, decelerating from the revised +6.2% YoY in February, the International Aluminium Institute reports. Specifically, China’s production (59% of global Al output) rose 4.9% YoY, following the improved power supply in previously drought-hit parts of the country's hydro-electric system. Despite the increasing supply globally, the potential recovery in construction activity in China (~58% of global primary Al demand in 2022), bolstered by the new economic stimulus and record high liquidity injections in early 2024, might provide additional support to Al prices (which have recently recovered >15% from early 2024)
To recap, China’s aluminium supply might 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)
🔗Global crude steel output fell 4% YoY to 161mnt in March, reversing from +4% YoY gain in February, the World Steel Association reports. The decline was mainly driven by China‘s 8% YoY drop (amid subdued domestic demand), after the +4% YoY seen in February. At the same time, ex-China steel output was broadly flat YoY. Specifically, Indian output (~8% of global steel supply) gained 8% YoY (after the +11% YoY in February), while Russia’s output inched up 1% YoY. US steel production was flat YoY, while EU supply remained under pressure (-4% YoY in March, vs. -2% YoY in February)
We reiterate our view that Сhinese steel supply might remain stressed in the coming months, amid concerns regarding China's economic recovery: the main steelmaking provinces have already issued suspension plans
#steel
https://metals-wire.com/sector/Steel
🔗Global crude steel output fell 4% YoY to 161mnt in March, reversing from +4% YoY gain in February, the World Steel Association reports. The decline was mainly driven by China‘s 8% YoY drop (amid subdued domestic demand), after the +4% YoY seen in February. At the same time, ex-China steel output was broadly flat YoY. Specifically, Indian output (~8% of global steel supply) gained 8% YoY (after the +11% YoY in February), while Russia’s output inched up 1% YoY. US steel production was flat YoY, while EU supply remained under pressure (-4% YoY in March, vs. -2% YoY in February)
We reiterate our view that Сhinese steel supply might remain stressed in the coming months, amid concerns regarding China's economic recovery: the main steelmaking provinces have already issued suspension plans
#steel
https://metals-wire.com/sector/Steel
❤1
Morning Bites (part 2)
🇨🇱 Chile's copper output guidance for 2025 was revised down to 5.8mnt, vs. previously guided 6mnt (-3%). The projected output, per a Chilean Copper Commission statement, would represent a 6% increase from the 5.5mnt expected this year, bolstered by Quebrada Blanca mine expansion. Chile's production (~27% of the global copper supply) has suffered in the past two years: output from the state-owned Codelco has significantly declined amid structural challenges and project delays
In our view, the lower production outlook might be positive for sentiment on copper markets
#copper
https://metals-wire.com/sector/Copper
🇨🇱 Chile's copper output guidance for 2025 was revised down to 5.8mnt, vs. previously guided 6mnt (-3%). The projected output, per a Chilean Copper Commission statement, would represent a 6% increase from the 5.5mnt expected this year, bolstered by Quebrada Blanca mine expansion. Chile's production (~27% of the global copper supply) has suffered in the past two years: output from the state-owned Codelco has significantly declined amid structural challenges and project delays
In our view, the lower production outlook might be positive for sentiment on copper markets
#copper
https://metals-wire.com/sector/Copper
Freeport McMoran 1Q24 results — above expectations
✏️Freeport's 1Q24 revenues outperformed both the consensus and our estimates (by 10% and 16%, respectively), as copper and gold sales were materially above our expectations. As a result, adjusted EBITDA was also a positive surprise (+12% vs. the consensus, and +8% vs. us)
⛏The miner reiterated its outlook for 2024: copper sales are to remain flat YoY, while gold sales are to grow >15% YoY. The company also anticipates 2024 net unit cash costs to remain broadly unchanged vs. the 2023 average of USD 1.60/lb
📈 According to Freeport, copper market fundamentals remain increasingly positive, pointing to near-term and long-term deficits -- in line with our view
❗️At spot, we expect Freeport’s 2Q24F EBITDA to show double-digit growth QoQ, supported by the strong price dynamics of the commodity basket (current copper and gold prices are respectively 15% and 12% above the 1Q24 average)
#FCX #copper
https://metals-wire.com/company/FCX_US
✏️Freeport's 1Q24 revenues outperformed both the consensus and our estimates (by 10% and 16%, respectively), as copper and gold sales were materially above our expectations. As a result, adjusted EBITDA was also a positive surprise (+12% vs. the consensus, and +8% vs. us)
⛏The miner reiterated its outlook for 2024: copper sales are to remain flat YoY, while gold sales are to grow >15% YoY. The company also anticipates 2024 net unit cash costs to remain broadly unchanged vs. the 2023 average of USD 1.60/lb
📈 According to Freeport, copper market fundamentals remain increasingly positive, pointing to near-term and long-term deficits -- in line with our view
❗️At spot, we expect Freeport’s 2Q24F EBITDA to show double-digit growth QoQ, supported by the strong price dynamics of the commodity basket (current copper and gold prices are respectively 15% and 12% above the 1Q24 average)
#FCX #copper
https://metals-wire.com/company/FCX_US
Morning Bites (part 1)
🔗CISA mills' daily crude steel production in mid-April was reported at 2.12mnt, up 0.3% from the previous ten days, but down 7.5% YoY. On a YTD basis, output was -1.7% YoY, which might reflect Beijing’s plans to limit national steel production further in 2024, per the National Development and Reform Commission (NDRC). Meanwhile, local steel inventories were 0.8% lower vs. the previous ten days (-2.3% YoY). Despite the currently sluggish domestic steel demand, China's record high liquidity injections in early 2024 and the new economic support measures are likely to bolster its construction activity this year, we believe
We remind readers that China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in mid-April was reported at 2.12mnt, up 0.3% from the previous ten days, but down 7.5% YoY. On a YTD basis, output was -1.7% YoY, which might reflect Beijing’s plans to limit national steel production further in 2024, per the National Development and Reform Commission (NDRC). Meanwhile, local steel inventories were 0.8% lower vs. the previous ten days (-2.3% YoY). Despite the currently sluggish domestic steel demand, China's record high liquidity injections in early 2024 and the new economic support measures are likely to bolster its construction activity this year, we believe
We remind readers that China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel