Morning Bites
🔗China’s crude steel output dropped 7% YoY in April, following the -8% YoY in March. Output remained weak YoY, following the subdued domestic demand, which has also resulted in high Chinese steel exports. To recap, China represents ~57% of global steel supply
🏢China's property sales fell 14% YoY in April (after the -24% YoY in March), being 54% below the 2021 level. Floor space starts were down 12% YoY in April (after the 26% YoY decline in March), and were -65% vs. 2021. Personal mortgage loans also came in 36% lower YoY (vs. -47% in March), while property completions dropped 15% YoY (vs. -22% YoY in March). Despite the ongoing slowdown in China’s property sector, possible state buying of unsold real estate might add support to local construction activity, we believe
#steel #property
https://metals-wire.com/sector/Steel
🔗China’s crude steel output dropped 7% YoY in April, following the -8% YoY in March. Output remained weak YoY, following the subdued domestic demand, which has also resulted in high Chinese steel exports. To recap, China represents ~57% of global steel supply
🏢China's property sales fell 14% YoY in April (after the -24% YoY in March), being 54% below the 2021 level. Floor space starts were down 12% YoY in April (after the 26% YoY decline in March), and were -65% vs. 2021. Personal mortgage loans also came in 36% lower YoY (vs. -47% in March), while property completions dropped 15% YoY (vs. -22% YoY in March). Despite the ongoing slowdown in China’s property sector, possible state buying of unsold real estate might add support to local construction activity, we believe
#steel #property
https://metals-wire.com/sector/Steel
Morning Bites (part 1)
🔗CISA mills daily crude steel production in early-May was reported at 2.19mnt, down 0.4% from the previous ten days, and -2.6% YoY. Meanwhile, local steel inventories were 2.5% higher over the period (and -7.6% YoY). In our view, China’s subdued production (based on CISA data, -1.7% YoY since January 2024) is due to overall sluggish domestic steel consumption, which has also led to growth in exports
China represents ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills daily crude steel production in early-May was reported at 2.19mnt, down 0.4% from the previous ten days, and -2.6% YoY. Meanwhile, local steel inventories were 2.5% higher over the period (and -7.6% YoY). In our view, China’s subdued production (based on CISA data, -1.7% YoY since January 2024) is due to overall sluggish domestic steel consumption, which has also led to growth in exports
China represents ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🏢 China is set to allocate CNY 300bn (USD 42bn) for the state purchase of unsold real estate, Bloomberg reports, citing PBoC Deputy Governor Tao Ling. The proposed aid volume, however, is substantially below estimates of CNY 1-2tn (USD 140-280bn). We note that the unsold housing stock currently stands at 3.6bn sqm, with an estimated cost of some CNY 7tn. Although the measure might add marginal support to local construction activity, it is in our view insufficient to resolve overstocking issues in China’s property sector, which we believe could become a negative factor for industrial metals prices in the short term
China accounts for 52% of global steel consumption, and for 57% and 61% of world Cu and Al demand, respectively
#steel #property
https://metals-wire.com/sector/Steel
🏢 China is set to allocate CNY 300bn (USD 42bn) for the state purchase of unsold real estate, Bloomberg reports, citing PBoC Deputy Governor Tao Ling. The proposed aid volume, however, is substantially below estimates of CNY 1-2tn (USD 140-280bn). We note that the unsold housing stock currently stands at 3.6bn sqm, with an estimated cost of some CNY 7tn. Although the measure might add marginal support to local construction activity, it is in our view insufficient to resolve overstocking issues in China’s property sector, which we believe could become a negative factor for industrial metals prices in the short term
China accounts for 52% of global steel consumption, and for 57% and 61% of world Cu and Al demand, respectively
#steel #property
https://metals-wire.com/sector/Steel
Morning Bites (part 3)
💎Petra Diamonds’ LFL rough prices at its 6th tender slid 3% vs. its 5th auction, mainly due to soft demand following Indian holidays and slow recovery in the Chinese market, according to Petra's press-release. Meanwhile, the miner’s average LFL prices in the last six tenders (July 2023 - May 2024) were down 9% YoY. Regarding the diamond market environment, Petra continues to see gradual stabilisation, remaining cautiously optimistic on demand and pricing improvement in 2024, which comes in line with our expectations of a potential diamond market recovery starting in the next 6 months
#diamonds
https://metals-wire.com/sector/Diamonds
💎Petra Diamonds’ LFL rough prices at its 6th tender slid 3% vs. its 5th auction, mainly due to soft demand following Indian holidays and slow recovery in the Chinese market, according to Petra's press-release. Meanwhile, the miner’s average LFL prices in the last six tenders (July 2023 - May 2024) were down 9% YoY. Regarding the diamond market environment, Petra continues to see gradual stabilisation, remaining cautiously optimistic on demand and pricing improvement in 2024, which comes in line with our expectations of a potential diamond market recovery starting in the next 6 months
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
💍China’s jewellery and watch retail sales were up 3% YoY in April, after the 7% YoY decline in March. According to Rapaport, the shift in Chinese consumer preferences to gold investment has slowed the recovery in local diamond demand in the past months. Overall, market participants expect gradual improvements in terms of prices and consumption in 2024, which is in line with our view that the global diamond market could potentially start recovering in the next six months
#diamonds
https://metals-wire.com/sector/Diamonds
💍China’s jewellery and watch retail sales were up 3% YoY in April, after the 7% YoY decline in March. According to Rapaport, the shift in Chinese consumer preferences to gold investment has slowed the recovery in local diamond demand in the past months. Overall, market participants expect gradual improvements in terms of prices and consumption in 2024, which is in line with our view that the global diamond market could potentially start recovering in the next six months
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
🏭Global primary aluminium output increased 3.3% YoY in April, decelerating from the revised +3.8% YoY in March, the International Aluminium Institute reports. Specifically, China’s production (59% of global Al output) rose 4.7% YoY, following the improved power supply in previously drought-hit parts of the country's hydro-electric system. The spot Al price, however, has gained ~25% since its lows in January 2024, as strong demand from China’s new-energy sector (e.g., solar panels and wind turbines) has offset the negative effects on prices from continuous production growth, we believe
In our view, the solid consumption dynamics in China and widely expected monetary easing in key global economies (e.g., the US and EU) in 2024, might further support the Al price
#aluminium
https://metals-wire.com/sector/Aluminium
🏭Global primary aluminium output increased 3.3% YoY in April, decelerating from the revised +3.8% YoY in March, the International Aluminium Institute reports. Specifically, China’s production (59% of global Al output) rose 4.7% YoY, following the improved power supply in previously drought-hit parts of the country's hydro-electric system. The spot Al price, however, has gained ~25% since its lows in January 2024, as strong demand from China’s new-energy sector (e.g., solar panels and wind turbines) has offset the negative effects on prices from continuous production growth, we believe
In our view, the solid consumption dynamics in China and widely expected monetary easing in key global economies (e.g., the US and EU) in 2024, might further support the Al price
#aluminium
https://metals-wire.com/sector/Aluminium
Morning Bites (part 2)
🏭 Rio Tinto has declared force majeure on Queensland alumina exports, Reuters reports. According to a company representative, the force majeure in Australia is because of a shortage of gas to power its operations. Rio Tinto expects disruptions to affect only third-party contracts, with operations likely to return to normal capacity in 2H24. Although the affected volumes account for <1% of global alumina supply, on our numbers, the force majeure might add a positive note to the short-term sentiment on aluminium
#aluminium
https://metals-wire.com/sector/Aluminium
🏭 Rio Tinto has declared force majeure on Queensland alumina exports, Reuters reports. According to a company representative, the force majeure in Australia is because of a shortage of gas to power its operations. Rio Tinto expects disruptions to affect only third-party contracts, with operations likely to return to normal capacity in 2H24. Although the affected volumes account for <1% of global alumina supply, on our numbers, the force majeure might add a positive note to the short-term sentiment on aluminium
#aluminium
https://metals-wire.com/sector/Aluminium
Morning Bites (part 1)
🔗Global crude steel output dropped 5% YoY to 156mnt in April, following the 4% YoY decline in March, the World Steel Association reports. Meanwhile, China’s production (~55% of global crude steel supply) fell 7% YoY, following the -8% YoY in March. Ex-China steel output was down 2% YoY. Russia’s output slid 6% YoY and US steel production fell 3% YoY in April, while the EU's inched up 1% YoY (after the -4% YoY in March). Meanwhile, the growth in Indian output (~8% of global steel supply) slowed to 4% YoY (after the +8% YoY in March)
We maintain our view that China’s steel supply might remain stressed in the coming months, following subdued domestic demand, as well as the rather limited stimulus for the property sector
#steel
https://metals-wire.com/sector/Steel
🔗Global crude steel output dropped 5% YoY to 156mnt in April, following the 4% YoY decline in March, the World Steel Association reports. Meanwhile, China’s production (~55% of global crude steel supply) fell 7% YoY, following the -8% YoY in March. Ex-China steel output was down 2% YoY. Russia’s output slid 6% YoY and US steel production fell 3% YoY in April, while the EU's inched up 1% YoY (after the -4% YoY in March). Meanwhile, the growth in Indian output (~8% of global steel supply) slowed to 4% YoY (after the +8% YoY in March)
We maintain our view that China’s steel supply might remain stressed in the coming months, following subdued domestic demand, as well as the rather limited stimulus for the property sector
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
💎De Beers has reported sales of USD 380mn at its 4th Cycle in 2024, ~29% below the historical average and 21% softer YoY (vs. -18% YoY at the 3rd cycle in 2024). According to the company's CEO, Al Cook, the sales trended lower due to slow trading in India (~95% of the world's polished stones supply) during local elections. Meanwhile, the miner expects the diamond market to be supported in coming years by a recovery in engagements
Despite the recent De Beers price cut, sales have remained subdued, which indicates that industry stock is still elevated. We, however, reiterate our view that the global diamond market might show its first signs of recovery in the next ~6 months due to strong fundamentals
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 380mn at its 4th Cycle in 2024, ~29% below the historical average and 21% softer YoY (vs. -18% YoY at the 3rd cycle in 2024). According to the company's CEO, Al Cook, the sales trended lower due to slow trading in India (~95% of the world's polished stones supply) during local elections. Meanwhile, the miner expects the diamond market to be supported in coming years by a recovery in engagements
Despite the recent De Beers price cut, sales have remained subdued, which indicates that industry stock is still elevated. We, however, reiterate our view that the global diamond market might show its first signs of recovery in the next ~6 months due to strong fundamentals
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
🚘EU + UK passenger car registrations rose 12% YoY in April, a reversal of the -2% YoY in March. The dynamics also matched our estimates. Meanwhile, the sales were still 20% below the pre-COVID, 2019 level. We reiterate our view that EU car sales are likely to remain sluggish in the near future, given continuously 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 23% and 30% of world autocatalyst Pd and Pt demand, respectively, in 2023
#cars
https://metals-wire.com/sector/PGM
🚘EU + UK passenger car registrations rose 12% YoY in April, a reversal of the -2% YoY in March. The dynamics also matched our estimates. Meanwhile, the sales were still 20% below the pre-COVID, 2019 level. We reiterate our view that EU car sales are likely to remain sluggish in the near future, given continuously 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 23% and 30% of world autocatalyst Pd and Pt demand, respectively, in 2023
#cars
https://metals-wire.com/sector/PGM
Morning Bites
🥉Global mined copper production increased 4.9% YoY in March, after the 9.5% YoY rise in February, the International Copper Study Group reports. Meanwhile, overall 1Q24 output was up 6.0% YoY. The dynamics were mostly driven by output growth in DR Congo (~11% of global supply), where production surged 24% YoY in 1Q24, supported by the expansion of the Kamoa mine, which offset the closure of Cobre Panama (since November 2023). On the demand side, the ICSG notes an increase in refined copper consumption (+4.0% YoY in 1Q24), driven by strong demand in China (+6.5% YoY in 1Q24) amid rapid expansion of the new-energy sector, while weak demand in the EU, US, and Japan weighed on ex-China usage (+0.7% YoY in 1Q24)
#copper
https://metals-wire.com/sector/Copper
🥉Global mined copper production increased 4.9% YoY in March, after the 9.5% YoY rise in February, the International Copper Study Group reports. Meanwhile, overall 1Q24 output was up 6.0% YoY. The dynamics were mostly driven by output growth in DR Congo (~11% of global supply), where production surged 24% YoY in 1Q24, supported by the expansion of the Kamoa mine, which offset the closure of Cobre Panama (since November 2023). On the demand side, the ICSG notes an increase in refined copper consumption (+4.0% YoY in 1Q24), driven by strong demand in China (+6.5% YoY in 1Q24) amid rapid expansion of the new-energy sector, while weak demand in the EU, US, and Japan weighed on ex-China usage (+0.7% YoY in 1Q24)
#copper
https://metals-wire.com/sector/Copper
Morning Bites
🔗CISA mills' daily crude steel production in mid-May was reported at 2.21mnt, up 0.8% from the previous ten days, but -1.6% YoY. Local steel inventories were 3.4% higher over the period (and +3.5% YoY). In our view, China’s subdued production (based on the CISA data, -1.7% YTD until 20 May) is due to rather soft domestic steel demand, which has also led to some growth in exports. We reiterate our view that the recently announced new support measures for China’s property sector are not enough to trigger a recovery in local construction activity
We recap that China represents ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in mid-May was reported at 2.21mnt, up 0.8% from the previous ten days, but -1.6% YoY. Local steel inventories were 3.4% higher over the period (and +3.5% YoY). In our view, China’s subdued production (based on the CISA data, -1.7% YTD until 20 May) is due to rather soft domestic steel demand, which has also led to some growth in exports. We reiterate our view that the recently announced new support measures for China’s property sector are not enough to trigger a recovery in local construction activity
We recap that China represents ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites
🏗China’s preliminary excavator sales were up 5% YoY in May (domestic + export), vs. the flat dynamics in April, per CME estimates. However, the figure was still 40% below the 2021 level. Specifically, domestic excavator sales are likely to gain 17% YoY, but remain -65% vs. May 2021, suggesting there is still no improvement in the depressed Chinese real estate sector. We also note that the recently announced new support measures for China’s property sector came in materially below expectations and are therefore unlikely to trigger a recovery in local construction activity, in our view
We recap that 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 were up 5% YoY in May (domestic + export), vs. the flat dynamics in April, per CME estimates. However, the figure was still 40% below the 2021 level. Specifically, domestic excavator sales are likely to gain 17% YoY, but remain -65% vs. May 2021, suggesting there is still no improvement in the depressed Chinese real estate sector. We also note that the recently announced new support measures for China’s property sector came in materially below expectations and are therefore unlikely to trigger a recovery in local construction activity, in our view
We recap that 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
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Morning Bites
📈China’s output of aluminium products rose 8% YoY to 5.8mnt in April, accelerating from the +4% YoY in March. Given the persistently strong demand for Al in China (~60% of global consumption), bolstered by the rapid expansion of the new energy sector, we maintain our positive long-term view on aluminium. Meanwhile, on our numbers, the metal’s price has already reached its fundamentally reasonable level for 2024 (USD 2,700-2,800/t)
🥉Chinese output of copper products dropped 4% YoY in April to 1.8mnt, decelerating from the -9% YoY in March. Despite some slowdown in consumption, the demand trends remain strong, while global copper visible inventories are close to their historical lows. Furthermore, the widely expected monetary easing in key economies (e.g., the US and EU) in 2024 might add additional impetus to the red metal's price, we believe. China remains the world's largest consumer of copper, representing ~55% of global Cu demand
#aluminium #copper
https://metals-wire.com/news-reports
📈China’s output of aluminium products rose 8% YoY to 5.8mnt in April, accelerating from the +4% YoY in March. Given the persistently strong demand for Al in China (~60% of global consumption), bolstered by the rapid expansion of the new energy sector, we maintain our positive long-term view on aluminium. Meanwhile, on our numbers, the metal’s price has already reached its fundamentally reasonable level for 2024 (USD 2,700-2,800/t)
🥉Chinese output of copper products dropped 4% YoY in April to 1.8mnt, decelerating from the -9% YoY in March. Despite some slowdown in consumption, the demand trends remain strong, while global copper visible inventories are close to their historical lows. Furthermore, the widely expected monetary easing in key economies (e.g., the US and EU) in 2024 might add additional impetus to the red metal's price, we believe. China remains the world's largest consumer of copper, representing ~55% of global Cu demand
#aluminium #copper
https://metals-wire.com/news-reports
Morning Bites (part 1)
📈Russia’s gold output rose 11.7% YoY in April, reversing from the 14.5% YoY drop in March, according to the Rosstat data. It was 5.2% YoY higher on the 4mo24 basis, but down 4.8% MoM. In our view, spot gold is trading above its fundamentally reasonable level (USD 2,200-2,300/oz for 2024), driven by the persistently strong demand from global central banks and market expectations of an upcoming US Fed funds rate cut in 2024
Russia’s gold output accounts for ~9% of the world's mined supply
#gold
https://metals-wire.com/sector/Gold
📈Russia’s gold output rose 11.7% YoY in April, reversing from the 14.5% YoY drop in March, according to the Rosstat data. It was 5.2% YoY higher on the 4mo24 basis, but down 4.8% MoM. In our view, spot gold is trading above its fundamentally reasonable level (USD 2,200-2,300/oz for 2024), driven by the persistently strong demand from global central banks and market expectations of an upcoming US Fed funds rate cut in 2024
Russia’s gold output accounts for ~9% of the world's mined supply
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
🇨🇳China’s grid infrastructure investment surged 25% YoY in 4mo24, according to National Bureau of Statistics data. The figure was also 40% above the 4mo20-23 average. In our view, this might be one of the key factors behind the recent rally in copper and aluminium prices (at spot, +20% and +17% vs. the early-2024 levels, respectively), as the grid accounts for 10-15% of Cu and Al consumption in China, on our numbers
Overall, the data underpin China's plans to expand local infrastructure in order to match growing installations of renewable energy. To recap, in 2023, installed solar energy capacity in China rose 55% YoY to 610GW (~40% of the global capacity), while we do not expect the dynamics to slow in coming years
We reiterate our positive view on silver, copper and aluminium -- key beneficiary metals of global clean energy transition in 2024-30
#silver #copper #aluminium
https://metals-wire.com/news-reports
🇨🇳China’s grid infrastructure investment surged 25% YoY in 4mo24, according to National Bureau of Statistics data. The figure was also 40% above the 4mo20-23 average. In our view, this might be one of the key factors behind the recent rally in copper and aluminium prices (at spot, +20% and +17% vs. the early-2024 levels, respectively), as the grid accounts for 10-15% of Cu and Al consumption in China, on our numbers
Overall, the data underpin China's plans to expand local infrastructure in order to match growing installations of renewable energy. To recap, in 2023, installed solar energy capacity in China rose 55% YoY to 610GW (~40% of the global capacity), while we do not expect the dynamics to slow in coming years
We reiterate our positive view on silver, copper and aluminium -- key beneficiary metals of global clean energy transition in 2024-30
#silver #copper #aluminium
https://metals-wire.com/news-reports
Morning Bites (part 1)
⚒Nornickel has revised down its forecast for the nickel market surplus in 2024, to 100kt. The company expects the Palladium deficit to deepen, to 900koz in 2024
• The Ni market is set to remain in surplus of 100kt in 2024-25 (vs. the previous forecast of +190kt in 2024), amid higher stainless steel output and a slower ramp-up of Indonesian nickel capacities.
• The miner now anticipates a deeper Pd market deficit, of 0.9mnoz, in 2024, and of 0.3mnoz in 2025 (vs. earlier indications of -0.4mnoz for 2024). Meanwhile, Nornickel now sees the Pt market in a balanced state in 2024-25 (vs. previous expectations of -0.3mnoz for 2024)
❗Nornickel notes a high level of speculative net-short positions in Pd (~15% of global demand as of end-May 2024, on our numbers), while the metal's price has not yet reacted to positive effects of lower recycling rates and mined supply in Russia and SA
#nickel #PGMs
https://metals-wire.com/news-reports
⚒Nornickel has revised down its forecast for the nickel market surplus in 2024, to 100kt. The company expects the Palladium deficit to deepen, to 900koz in 2024
• The Ni market is set to remain in surplus of 100kt in 2024-25 (vs. the previous forecast of +190kt in 2024), amid higher stainless steel output and a slower ramp-up of Indonesian nickel capacities.
• The miner now anticipates a deeper Pd market deficit, of 0.9mnoz, in 2024, and of 0.3mnoz in 2025 (vs. earlier indications of -0.4mnoz for 2024). Meanwhile, Nornickel now sees the Pt market in a balanced state in 2024-25 (vs. previous expectations of -0.3mnoz for 2024)
❗Nornickel notes a high level of speculative net-short positions in Pd (~15% of global demand as of end-May 2024, on our numbers), while the metal's price has not yet reacted to positive effects of lower recycling rates and mined supply in Russia and SA
#nickel #PGMs
https://metals-wire.com/news-reports