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
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⚒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
Morning Bites (part 2)
🏭 Ivanhoe is set to complete construction of Kamoa-Kakula’s phase 3 concentrator ahead of schedule, according to a company press release (it had peviously been planned to launch the project in 4Q24). The Phase 3 concentrator has a designed capacity of ~210kt (~1% of global Cu supply), bringing the plant's total capacity to 600kt. To recap, DR Congo's Cu output grew 24% YoY in 1Q24, driving the growth in global supply (+6% YoY in 1Q24)
Although the Cu supply dynamics might remain strong in the near term, as new projects are ramped up, the growing demand from grid construction and renewable energy installments in China might offset the negative effects on the red metal's price, we believe
#copper
https://metals-wire.com/sector/Copper
🏭 Ivanhoe is set to complete construction of Kamoa-Kakula’s phase 3 concentrator ahead of schedule, according to a company press release (it had peviously been planned to launch the project in 4Q24). The Phase 3 concentrator has a designed capacity of ~210kt (~1% of global Cu supply), bringing the plant's total capacity to 600kt. To recap, DR Congo's Cu output grew 24% YoY in 1Q24, driving the growth in global supply (+6% YoY in 1Q24)
Although the Cu supply dynamics might remain strong in the near term, as new projects are ramped up, the growing demand from grid construction and renewable energy installments in China might offset the negative effects on the red metal's price, we believe
#copper
https://metals-wire.com/sector/Copper
Morning Bites
💍Hong Kong jewellery and watch sales shrank 29% YoY in April, accelerating from the revised -16% YoY in March, per the government data. According to Rapaport, sales remained under pressure as local consumers made outbound trips during the Easter holiday period
Despite the soft demand in HK, and rather slow recovery in China, sentiment remains strong on the key US market (~53% of the world's gem-set jewellery trade), which 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 shrank 29% YoY in April, accelerating from the revised -16% YoY in March, per the government data. According to Rapaport, sales remained under pressure as local consumers made outbound trips during the Easter holiday period
Despite the soft demand in HK, and rather slow recovery in China, sentiment remains strong on the key US market (~53% of the world's gem-set jewellery trade), which 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
🌏Global manufacturing PMIs showed mixed dynamics in May. The Eurozone Markit Manufacturing PMI recovered to 47.3 (the highest point since March 2023). The US ISM manufacturing PMI was at 48.7 (vs. the consensus of 49.6)
🇨🇳The official NBS Manufacturing PMI in China shrank to 49.5 in May (from 50.4 in April), missing the market estimates of 50.5. Meanwhile, the Caixin China Manufacturing PMI was at 51.7 in May - ahead of the 51.5 forecasts
🇮🇳 Although the Indian manufacturing PMI slowed to 57.5 (vs. the consensus of 58.4), it remains the strongest of the indicators among the world's key economies
❗️The US and EU PMIs remained weak in April (staying below 50.0), but the Chinese and Indian data were rather strong. Overall, this reflects the improving sentiment in the Asian manufacturing sectors, which is a positive factor for the industrial metals demand (e.g. steel, aluminum and copper)
#PMIs
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🌏Global manufacturing PMIs showed mixed dynamics in May. The Eurozone Markit Manufacturing PMI recovered to 47.3 (the highest point since March 2023). The US ISM manufacturing PMI was at 48.7 (vs. the consensus of 49.6)
🇨🇳The official NBS Manufacturing PMI in China shrank to 49.5 in May (from 50.4 in April), missing the market estimates of 50.5. Meanwhile, the Caixin China Manufacturing PMI was at 51.7 in May - ahead of the 51.5 forecasts
🇮🇳 Although the Indian manufacturing PMI slowed to 57.5 (vs. the consensus of 58.4), it remains the strongest of the indicators among the world's key economies
❗️The US and EU PMIs remained weak in April (staying below 50.0), but the Chinese and Indian data were rather strong. Overall, this reflects the improving sentiment in the Asian manufacturing sectors, which is a positive factor for the industrial metals demand (e.g. steel, aluminum and copper)
#PMIs
https://metals-wire.com/news-reports
Morning Bites (part 1)
🏦 Global central banks purchased net 33t of gold in April, vs. the revised +3t in March, marking the 11th consecutive month in which they increased holdings, the World Gold Council (WGC) reports. The major contributors were Turkey (+8t), Kazakhstan and India (+6t both), while China has slowed its purchases (+2t in April). There were no material sales volumes, which stood at only 3t in April
We maintain our view that the fundamentally reasonable gold price is USD 2,200-2,300/oz for 2024. Meanwhile, the spot gold price has exceeded this level, following persistently strong demand from global central banks and widely expected US Fed funds rate cut this year
#gold
https://metals-wire.com/sector/Gold
🏦 Global central banks purchased net 33t of gold in April, vs. the revised +3t in March, marking the 11th consecutive month in which they increased holdings, the World Gold Council (WGC) reports. The major contributors were Turkey (+8t), Kazakhstan and India (+6t both), while China has slowed its purchases (+2t in April). There were no material sales volumes, which stood at only 3t in April
We maintain our view that the fundamentally reasonable gold price is USD 2,200-2,300/oz for 2024. Meanwhile, the spot gold price has exceeded this level, following persistently strong demand from global central banks and widely expected US Fed funds rate cut this year
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
🚘US light vehicle sales were up 5% YoY in May, recovering after the 2% YoY drop in April. However, the figure was still 10% below the pre-Covid 2019 level. Seasonally-adjusted sales volumes gained 3% YoY last month, but remained -7% vs. the 2019 level. Despite the gradual recovery in US car sales in 2024, they remain soft compared with historical volumes. In our view, the positive effect on automotive demand for PGMs might be rather limited, given the growing appetite for EVs globally
On our numbers, North America accounted for 22% and 15% of world autocatalyst Pd and Pt consumption, respectively, in 2023
#cars
https://metals-wire.com/news-reports
🚘US light vehicle sales were up 5% YoY in May, recovering after the 2% YoY drop in April. However, the figure was still 10% below the pre-Covid 2019 level. Seasonally-adjusted sales volumes gained 3% YoY last month, but remained -7% vs. the 2019 level. Despite the gradual recovery in US car sales in 2024, they remain soft compared with historical volumes. In our view, the positive effect on automotive demand for PGMs might be rather limited, given the growing appetite for EVs globally
On our numbers, North America accounted for 22% and 15% of world autocatalyst Pd and Pt consumption, respectively, in 2023
#cars
https://metals-wire.com/news-reports
Morning Bites
🇨🇱Chile’s copper output decreased 2% YoY in April, marking the lowest monthly result in the last 13 months, after the flat YoY dynamics in March, per INE data. According to Bloomberg, poor ore quality and operational setbacks affected the country’s Cu supply. Despite the slowdown in local production, Codelco (the leading Chilean miner; ~7% of global Cu supply) plans to increase output up to 5% YoY in 2024. Overall, the disruptions in Chile’s mining industry, if they persist, might partially offset the ramp up of new copper assets (e.g. Kamoa phase 3) in 2024
Chile accounted for ~24% of global copper supply in 2023
#copper
https://metals-wire.com/sector/Copper
🇨🇱Chile’s copper output decreased 2% YoY in April, marking the lowest monthly result in the last 13 months, after the flat YoY dynamics in March, per INE data. According to Bloomberg, poor ore quality and operational setbacks affected the country’s Cu supply. Despite the slowdown in local production, Codelco (the leading Chilean miner; ~7% of global Cu supply) plans to increase output up to 5% YoY in 2024. Overall, the disruptions in Chile’s mining industry, if they persist, might partially offset the ramp up of new copper assets (e.g. Kamoa phase 3) in 2024
Chile accounted for ~24% of global copper supply in 2023
#copper
https://metals-wire.com/sector/Copper
🗞Today, China published its preliminary import/export statistics for May (see table above)
#statistics #China
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#statistics #China
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Morning Bites (part 1)
🔗China’s finished steel net exports continued to grow, being up 16% YoY in May, following the +17% YoY in April. According to Bloomberg, weak domestic demand (amid the prolonged property crisis) has encouraged local producers to find customers abroad. Meanwhile, according to CISA's data (representing >80% of domestic output), Chinese steel supply was down 1.3% YoY in 5mo24
🪨China’s coal imports gained 11% YoY in May, in line with the +11% YoY in April. According to Reuters, safety inspections following local mining accidents weighed on Shanxi’s production (the top coking coal hub) in 2024. As a result, in April, China's coal output fell to its lowest point since October 2022, which has bolstered imports
#coal #steel
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🔗China’s finished steel net exports continued to grow, being up 16% YoY in May, following the +17% YoY in April. According to Bloomberg, weak domestic demand (amid the prolonged property crisis) has encouraged local producers to find customers abroad. Meanwhile, according to CISA's data (representing >80% of domestic output), Chinese steel supply was down 1.3% YoY in 5mo24
🪨China’s coal imports gained 11% YoY in May, in line with the +11% YoY in April. According to Reuters, safety inspections following local mining accidents weighed on Shanxi’s production (the top coking coal hub) in 2024. As a result, in April, China's coal output fell to its lowest point since October 2022, which has bolstered imports
#coal #steel
https://metals-wire.com/news-reports
Morning Bites (part 2)
🔗CISA mills' daily crude steel production in late-May was reported at 2.18mnt, down 1.5% from the previous ten days, but +3.9% YoY. Meanwhile, local steel inventories decreased 13.4% over the period (also being -6.8% YoY). In our view, sluggish domestic steel demand, which has triggered export growth, might keep weighing on China’s steel production (based on the CISA data, -1.3% YoY in 5mo24)
To recap, China accounts for ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in late-May was reported at 2.18mnt, down 1.5% from the previous ten days, but +3.9% YoY. Meanwhile, local steel inventories decreased 13.4% over the period (also being -6.8% YoY). In our view, sluggish domestic steel demand, which has triggered export growth, might keep weighing on China’s steel production (based on the CISA data, -1.3% YoY in 5mo24)
To recap, China accounts for ~57% of world steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 3)
📈Gold-backed ETFs saw inflows of 8t in May, after 11 months of consecutive net sales. According to the World Gold Council (WGC), last month's inflows were concentrated in Europe (+6t) and Asia (+5t); North American funds sold net 2t in May. In our view, gold at spot is still 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 widely anticipated US Fed funds rate cut in 2024
We also remind readers that ECB (the European Central Bank) yesterday decided to lower its key rate to 3.75% (vs. 4.00% earlier), marking the first cut since 2019, which was in-line with market expectations
#ETF #gold
https://metals-wire.com/news-reports
📈Gold-backed ETFs saw inflows of 8t in May, after 11 months of consecutive net sales. According to the World Gold Council (WGC), last month's inflows were concentrated in Europe (+6t) and Asia (+5t); North American funds sold net 2t in May. In our view, gold at spot is still 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 widely anticipated US Fed funds rate cut in 2024
We also remind readers that ECB (the European Central Bank) yesterday decided to lower its key rate to 3.75% (vs. 4.00% earlier), marking the first cut since 2019, which was in-line with market expectations
#ETF #gold
https://metals-wire.com/news-reports
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Morning Bites (part 1)
💎US jewellery sales grew 5% YoY in April, roughly in line with the revised +6% YoY in March and marking the sixth consecutive YoY gain, IDEX reports, citing the US Department of Commerce. According to Rapaport, local diamond trading was seasonally slow in April, without notable market-moving events. We reiterate our view that the gradual recovery in US demand could well accelerate the release of the industry's inventories, supporting sentiment in the global diamond market
The US accounts for ~53% of global gem-set jewellery demand
#diamonds
https://metals-wire.com/sector/Diamonds
💎US jewellery sales grew 5% YoY in April, roughly in line with the revised +6% YoY in March and marking the sixth consecutive YoY gain, IDEX reports, citing the US Department of Commerce. According to Rapaport, local diamond trading was seasonally slow in April, without notable market-moving events. We reiterate our view that the gradual recovery in US demand could well accelerate the release of the industry's inventories, supporting sentiment in the global diamond market
The US accounts for ~53% of global gem-set jewellery demand
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🏦 The PBoC stopped buying gold for its reserves in May, after 18 consecutive months of accumulation, Bloomberg reports, citing official data. Since November 2022, China’s central bank has added ~316t of gold (~5% of annualised demand) to its holdings, which currently stand at 2,264t. Overall, the news that China's accumulation of gold has stopped has been negative for sentiment, and has pushed the gold spot price closer to what we see as its fundamentally reasonable level for 2024 (USD 2,200-2,300/oz, on our numbers)
However, based on WGC data, reported central bank gold purchases accounted for <40% of its total official sector demand estimate in the last two years (16% in 1Q24)
#gold
https://metals-wire.com/sector/Gold
🏦 The PBoC stopped buying gold for its reserves in May, after 18 consecutive months of accumulation, Bloomberg reports, citing official data. Since November 2022, China’s central bank has added ~316t of gold (~5% of annualised demand) to its holdings, which currently stand at 2,264t. Overall, the news that China's accumulation of gold has stopped has been negative for sentiment, and has pushed the gold spot price closer to what we see as its fundamentally reasonable level for 2024 (USD 2,200-2,300/oz, on our numbers)
However, based on WGC data, reported central bank gold purchases accounted for <40% of its total official sector demand estimate in the last two years (16% in 1Q24)
#gold
https://metals-wire.com/sector/Gold
Morning Bites
🏗China’s excavator sales rose 6% YoY in May (domestic + export), after the flat YoY dynamic in April, according to the CCMA data. The figure was broadly in line with CME estimates. Specifically, domestic sales were up 29% YoY (although still 61% lower than May 2021), which might indicate that local construction activity has bottomed out. We believe, however, that some material government input is required to trigger a recovery in the Chinese property sector
The recently announced CNY 300bn of new support measures for China’s real estate sector was substantially below expectations (CNY 1-2tn) and is therefore unlikely to boost the demand for industrial metals, we believe
China accounts for 52% of global steel consumption, and for 57% and 61% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
🏗China’s excavator sales rose 6% YoY in May (domestic + export), after the flat YoY dynamic in April, according to the CCMA data. The figure was broadly in line with CME estimates. Specifically, domestic sales were up 29% YoY (although still 61% lower than May 2021), which might indicate that local construction activity has bottomed out. We believe, however, that some material government input is required to trigger a recovery in the Chinese property sector
The recently announced CNY 300bn of new support measures for China’s real estate sector was substantially below expectations (CNY 1-2tn) and is therefore unlikely to boost the demand for industrial metals, we believe
China accounts for 52% of global steel consumption, and for 57% and 61% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
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Morning Bites
🚘 New car registrations in France, the UK, Spain, Italy and Germany inched down 2% YoY in May, after the 12% YoY growth in April. The figure also remained materially below the pre-COVID level (-26% vs. May 2019). Specifically, in Germany and Italy, car sales were 29% lower than the same month in 2019, while registrations in France and Spain were 27% and 24% weaker, respectively. UK car sales dropped 20% YoY
Given these five countries represented >70% of new vehicle registrations in Europe in 2023, local car sales have likely remained subdued in May
#cars
https://metals-wire.com/sector/PGM
🚘 New car registrations in France, the UK, Spain, Italy and Germany inched down 2% YoY in May, after the 12% YoY growth in April. The figure also remained materially below the pre-COVID level (-26% vs. May 2019). Specifically, in Germany and Italy, car sales were 29% lower than the same month in 2019, while registrations in France and Spain were 27% and 24% weaker, respectively. UK car sales dropped 20% YoY
Given these five countries represented >70% of new vehicle registrations in Europe in 2023, local car sales have likely remained subdued in May
#cars
https://metals-wire.com/sector/PGM
Morning Bites (part 1)
🇿🇦South Africa’s PGM mining output jumped 17% YoY in April, reversing from the revised 2% YoY decline in March, according to official statistics. The country’s gold production inched down 2% YoY, after the revised decline of 4% YoY in March. Despite the announced job cuts by major SA PGM miners Sibanye, Impala and Amplats, local production dynamics remain solid. Unfavourable market conditions, however, might weigh on production in 2024, we believe, amid subdued PGM demand from the automotive sector, persistent inflationary pressures in key economies (e.g. the US and EU) 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 jumped 17% YoY in April, reversing from the revised 2% YoY decline in March, according to official statistics. The country’s gold production inched down 2% YoY, after the revised decline of 4% YoY in March. Despite the announced job cuts by major SA PGM miners Sibanye, Impala and Amplats, local production dynamics remain solid. Unfavourable market conditions, however, might weigh on production in 2024, we believe, amid subdued PGM demand from the automotive sector, persistent inflationary pressures in key economies (e.g. the US and EU) 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
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Morning Bites (part 2)
💍Signet has reported a YoY drop of 8.9% in same-store sales in 1Q24 (February-April), after the -9.6% YoY in 4Q23. The retailer’s press release indicates that same-store sales in North America shrank 9.2% YoY, while proceeds from the international segment were down 3.2% YoY. According to Signet CEO Virginia Drosos, despite the weak beginning to the quarter, the company saw a notable improvement in sentiment in 1Q24, which was especially strong in May
Overall, we expect the positive momentum mentioned by the CEO to persist, as we maintain our cautiously upbeat view on the diamond sector. We think it might show the first signs of a recovery in the coming 3-6 months
#diamonds
https://metals-wire.com/news-reports
💍Signet has reported a YoY drop of 8.9% in same-store sales in 1Q24 (February-April), after the -9.6% YoY in 4Q23. The retailer’s press release indicates that same-store sales in North America shrank 9.2% YoY, while proceeds from the international segment were down 3.2% YoY. According to Signet CEO Virginia Drosos, despite the weak beginning to the quarter, the company saw a notable improvement in sentiment in 1Q24, which was especially strong in May
Overall, we expect the positive momentum mentioned by the CEO to persist, as we maintain our cautiously upbeat view on the diamond sector. We think it might show the first signs of a recovery in the coming 3-6 months
#diamonds
https://metals-wire.com/news-reports