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
https://metals-wire.com/news-reports
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
🗞Today, China has published its industrial production data for May (see table above)
#statistics #China
https://metals-wire.com/news-reports
#statistics #China
https://metals-wire.com/news-reports
Morning Bites (part 1)
🔗China’s crude steel output rose 3% YoY in May, reversing from the -7% YoY in April. However, production remained 1% lower YoY in 5mo24, amid sluggish domestic demand. China represents ~57% of global steel supply
🏢China's property sales fell 16% YoY in May (after the -14% YoY in April), and were 54% below the 2021 level. Floor space starts were down 23% YoY in May (vs. -12% YoY in April), and were -68% vs. 2021. Personal mortgage loans came in 42% lower YoY (vs. -36% in April), while property completions dropped 18% YoY (vs. -15% YoY). As we have noted previously, the recently announced support measures are not enough to revive the local property sector. Hence, the demand for industrial metals from China's construction is likely to remain subdued in 2024
#steel #property
https://metals-wire.com/sector/Steel
🔗China’s crude steel output rose 3% YoY in May, reversing from the -7% YoY in April. However, production remained 1% lower YoY in 5mo24, amid sluggish domestic demand. China represents ~57% of global steel supply
🏢China's property sales fell 16% YoY in May (after the -14% YoY in April), and were 54% below the 2021 level. Floor space starts were down 23% YoY in May (vs. -12% YoY in April), and were -68% vs. 2021. Personal mortgage loans came in 42% lower YoY (vs. -36% in April), while property completions dropped 18% YoY (vs. -15% YoY). As we have noted previously, the recently announced support measures are not enough to revive the local property sector. Hence, the demand for industrial metals from China's construction is likely to remain subdued in 2024
#steel #property
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🔗CISA mills daily crude steel production in early-June was reported at 2.24mnt, up 3.1% from the previous ten days, and +0.5% YoY. Meanwhile, local steel inventories were 10.4% higher over the period (and +1.8% YoY). In our view, China’s subdued production (based on CISA data, -1.1% YTD until June 10) is due to overall sluggish domestic steel demand, 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-June was reported at 2.24mnt, up 3.1% from the previous ten days, and +0.5% YoY. Meanwhile, local steel inventories were 10.4% higher over the period (and +1.8% YoY). In our view, China’s subdued production (based on CISA data, -1.1% YTD until June 10) is due to overall sluggish domestic steel demand, 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 3)
🇵🇪 Peru’s copper output dropped 8% YoY in April, after the flat YoY dynamics seen in March, as follows from the MINEM data. The decline is associated with maintenance works, as well as lower ore grades at some assets (e.g., output at Cerro Verde fell 5% YoY in April). Overall, the joint production of Chile and Peru (~38% of global Cu supply) fell 4% YoY in April, the sharpest decline since August 2022
We remind readers that the Peruvian government plans to boost domestic Cu supply 9% YoY in 2024, after the +13% YoY in 2023, while Peru standalone accounts for ~12% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
🇵🇪 Peru’s copper output dropped 8% YoY in April, after the flat YoY dynamics seen in March, as follows from the MINEM data. The decline is associated with maintenance works, as well as lower ore grades at some assets (e.g., output at Cerro Verde fell 5% YoY in April). Overall, the joint production of Chile and Peru (~38% of global Cu supply) fell 4% YoY in April, the sharpest decline since August 2022
We remind readers that the Peruvian government plans to boost domestic Cu supply 9% YoY in 2024, after the +13% YoY in 2023, while Peru standalone accounts for ~12% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
📌China’s new internal combustion engine car sales dropped 12% YoY in May, after the -1% YoY in April. The numbers remained well below their pre-Covid levels (-19% vs. May 2019), amid the strong appetite for EVs, which keeps pressuring PGM consumption. To recap, the Chinese automotive sector represents some 20% and 17% of the global demand for Pd and Pt, respectively
📌New EV sales in China gained 33% YoY in May, following the +34% YoY in April. In our view, persistently strong local EV demand might add further support to the consumption of the battery metals basket (cobalt, lithium and nickel), as China accounted for ~55% of global EV sales in 1Q24
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
📌China’s new internal combustion engine car sales dropped 12% YoY in May, after the -1% YoY in April. The numbers remained well below their pre-Covid levels (-19% vs. May 2019), amid the strong appetite for EVs, which keeps pressuring PGM consumption. To recap, the Chinese automotive sector represents some 20% and 17% of the global demand for Pd and Pt, respectively
📌New EV sales in China gained 33% YoY in May, following the +34% YoY in April. In our view, persistently strong local EV demand might add further support to the consumption of the battery metals basket (cobalt, lithium and nickel), as China accounted for ~55% of global EV sales in 1Q24
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
Morning Bites (part 2)
🏦 China’s aggregate financing rose 33% YoY in May to CNY 2.07tn after the negative reading in April. Meanwhile, traditional bank loans declined 30% YoY, missing the consensus estimates by 27%. We maintain our view that the new support measures are insufficient to trigger a recovery in China’s property sector. Hence, the demand for industrial metals from local construction is likely to remain limited in 2024
China accounts for 52% of global steel consumption, and for 57% and 61% of world Cu and Al demand, respectively
#global
https://metals-wire.com/news-reports
🏦 China’s aggregate financing rose 33% YoY in May to CNY 2.07tn after the negative reading in April. Meanwhile, traditional bank loans declined 30% YoY, missing the consensus estimates by 27%. We maintain our view that the new support measures are insufficient to trigger a recovery in China’s property sector. Hence, the demand for industrial metals from local construction is likely to remain limited in 2024
China accounts for 52% of global steel consumption, and for 57% and 61% of world Cu and Al demand, respectively
#global
https://metals-wire.com/news-reports
Morning Bites
💍China’s jewellery and watch retail sales increased 10% YoY in May, after the 3% YoY rise in April. According to Rapaport, the local diamond market is traditionally slow in the summer, with demand likely to rebound in September. Overall, some recovery in the China and US downstream markets (which jointly represent ~65% of global demand for polished diamonds) might accelerate the diamond industry’s stock release, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💍China’s jewellery and watch retail sales increased 10% YoY in May, after the 3% YoY rise in April. According to Rapaport, the local diamond market is traditionally slow in the summer, with demand likely to rebound in September. Overall, some recovery in the China and US downstream markets (which jointly represent ~65% of global demand for polished diamonds) might accelerate the diamond industry’s stock release, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
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Morning Bites
💍Richemont jewellery segment sales inched down 1% YoY in 1Q24, after the 6% YoY gain in 4Q23, the company reports. Sales growth was seen almost in all regions -- the Americas (+12% YoY), Europe (+5% YoY) and Japan (+24% YoY), except for Asia Pacific (-16% YoY)
🇨🇳 Chow Tai Fook’s 2Q24 LFL sales dropped 33% YoY in the gem-set jewellery segment, in line with the 34% YoY decrease in 1Q24, the company has reported. Particularly, sales in the gem-set segment in Mainland China were 33% lower YoY (vs. the 20% YoY fall in 1Q24), while HK and Macau sales declined 37% YoY (vs. the 27% YoY contraction in 1Q24)
Overall, we keep our cautiously positive view on the diamond sector, given strong US downstream demand (~53% of the global market) and upbeat Chinese jewellery sales (~12%) in May, which might accelerate the industry's stock release in 2024, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💍Richemont jewellery segment sales inched down 1% YoY in 1Q24, after the 6% YoY gain in 4Q23, the company reports. Sales growth was seen almost in all regions -- the Americas (+12% YoY), Europe (+5% YoY) and Japan (+24% YoY), except for Asia Pacific (-16% YoY)
🇨🇳 Chow Tai Fook’s 2Q24 LFL sales dropped 33% YoY in the gem-set jewellery segment, in line with the 34% YoY decrease in 1Q24, the company has reported. Particularly, sales in the gem-set segment in Mainland China were 33% lower YoY (vs. the 20% YoY fall in 1Q24), while HK and Macau sales declined 37% YoY (vs. the 27% YoY contraction in 1Q24)
Overall, we keep our cautiously positive view on the diamond sector, given strong US downstream demand (~53% of the global market) and upbeat Chinese jewellery sales (~12%) in May, which might accelerate the industry's stock release in 2024, we believe
#diamonds
https://metals-wire.com/sector/Diamonds