Morning Bites (part 1)
🔗China’s finished steel net exports grew 18% YoY in June, following the +16% YoY in May. To recap, weak domestic demand (amid the prolonged property crisis) has encouraged local producers to find customers abroad, and that led to elevated exports in 1H24. Meanwhile, the new potential economic stimulus, which is expected to be announced after the Third Plenum meeting (15-18 July), might add support to Chinese construction demand, we believe
🪨China’s coal imports rose 12% YoY in June, in line with the +11% YoY in May. According to Reuters, record high temperatures in northwest and east China in June boosted electricity demand (to power air conditioning). Furthermore, China's coal output was down 3% YoY in 5mo23, which has led to increased imports
#coal #steel
https://metals-wire.com/news-reports
🔗China’s finished steel net exports grew 18% YoY in June, following the +16% YoY in May. To recap, weak domestic demand (amid the prolonged property crisis) has encouraged local producers to find customers abroad, and that led to elevated exports in 1H24. Meanwhile, the new potential economic stimulus, which is expected to be announced after the Third Plenum meeting (15-18 July), might add support to Chinese construction demand, we believe
🪨China’s coal imports rose 12% YoY in June, in line with the +11% YoY in May. According to Reuters, record high temperatures in northwest and east China in June boosted electricity demand (to power air conditioning). Furthermore, China's coal output was down 3% YoY in 5mo23, which has led to increased imports
#coal #steel
https://metals-wire.com/news-reports
Morning Bites (part 2)
🇿🇦South Africa’s PGM mining output declined 4% YoY in May, reversing from the +17% YoY in April, according to official statistics. The country’s gold production fell 9% YoY, accelerating from the 2% YoY drop in April. In our view, unfavourable market conditions will likely keep weighing on PGM production in 2024, as demand from the automotive sector remains subdued, in addition to growing consumer interest 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 declined 4% YoY in May, reversing from the +17% YoY in April, according to official statistics. The country’s gold production fell 9% YoY, accelerating from the 2% YoY drop in April. In our view, unfavourable market conditions will likely keep weighing on PGM production in 2024, as demand from the automotive sector remains subdued, in addition to growing consumer interest 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 3)
⛏BHP aims to halt its Nickel West operations in 4Q24 until 2027, due to global oversupply of nickel, according to a company press release. Specifically, BHP is to suspend work at the Kwinana nickel refinery, the Kalgoorlie nickel smelter and the Mt Keith and Leinster mines, implementing a care and maintenance programme. BHP’s Nickel West mines accounted for ~2.3% of global Ni supply in 2023 (and ~5.3% of Class-1 Ni supply), on our numbers
Overall, the news is in line with the latest nickel mine closures, as the supply side has started to react to the continuous Ni price decline (-27% YoY in 1H24 and -38% vs. 1H22)
#Nickel
https://metals-wire.com/news-reports
⛏BHP aims to halt its Nickel West operations in 4Q24 until 2027, due to global oversupply of nickel, according to a company press release. Specifically, BHP is to suspend work at the Kwinana nickel refinery, the Kalgoorlie nickel smelter and the Mt Keith and Leinster mines, implementing a care and maintenance programme. BHP’s Nickel West mines accounted for ~2.3% of global Ni supply in 2023 (and ~5.3% of Class-1 Ni supply), on our numbers
Overall, the news is in line with the latest nickel mine closures, as the supply side has started to react to the continuous Ni price decline (-27% YoY in 1H24 and -38% vs. 1H22)
#Nickel
https://metals-wire.com/news-reports
Week ahead data releases in M&M
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among major M&M names, Alcoa is to release its 2Q24 earnings. On the EBITDA side, we are broadly in-line with the consensus
This week we also expect to see Chinese industrial production and EU car registrations data
#reporting_season
https://metals-wire.com/events
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among major M&M names, Alcoa is to release its 2Q24 earnings. On the EBITDA side, we are broadly in-line with the consensus
This week we also expect to see Chinese industrial production and EU car registrations data
#reporting_season
https://metals-wire.com/events
🗞Today, China has published its industrial production data for June (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 was broadly flat YoY in June, after the 3% YoY gain in May. Meanwhile, the production remained 1% lower YoY in 1H24, amid slow domestic demand and subdued steel margins, per Reuters. China represents ~57% of global steel supply
🏢China's property sales decreased 14% YoY in June (after the -16% YoY in May), and were 49% below the 2021 level. Floor space starts declined 22% YoY in June (vs. -23% YoY in May), and were -71% vs. 2021. Personal mortgage loans were 25% lower YoY (vs. -42% in May), while property completions dropped 30% YoY (vs. -18% YoY). Although China’s property sector remains depressed, new potential economic stimulus - an announcement on which is broadly expected after the Third Plenum meeting (15-18 July) - might add support to construction demand, we believe
#steel #property
https://metals-wire.com/sector/Steel
🔗China’s crude steel output was broadly flat YoY in June, after the 3% YoY gain in May. Meanwhile, the production remained 1% lower YoY in 1H24, amid slow domestic demand and subdued steel margins, per Reuters. China represents ~57% of global steel supply
🏢China's property sales decreased 14% YoY in June (after the -16% YoY in May), and were 49% below the 2021 level. Floor space starts declined 22% YoY in June (vs. -23% YoY in May), and were -71% vs. 2021. Personal mortgage loans were 25% lower YoY (vs. -42% in May), while property completions dropped 30% YoY (vs. -18% YoY). Although China’s property sector remains depressed, new potential economic stimulus - an announcement on which is broadly expected after the Third Plenum meeting (15-18 July) - might add support to construction demand, we believe
#steel #property
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
📌China’s new internal combustion engine car sales decreased 17% YoY in June, after the 12% YoY decline in May. The sales remained materially below their pre-Covid levels (-21% vs. June 2019), amid persistently strong appetite for EVs, which is in turn affecting 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 increased 30% YoY in June, after the 33% YoY gain in May. Overall, continuously 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 decreased 17% YoY in June, after the 12% YoY decline in May. The sales remained materially below their pre-Covid levels (-21% vs. June 2019), amid persistently strong appetite for EVs, which is in turn affecting 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 increased 30% YoY in June, after the 33% YoY gain in May. Overall, continuously 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
🇵🇪 Peru’s copper output inched down 1% YoY in May, after the 8% YoY drop in April, according to the MINEM data. Although the Peruvian government plans to boost domestic Cu supply 9% YoY in 2024 (after the +13% YoY in 2023), output on the 5mo24 basis remained broadly flat YoY. In our view, the YTD dynamics add some scepticism to the announced plan
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) gained 5% YoY in May
#copper
https://metals-wire.com/sector/Copper
🇵🇪 Peru’s copper output inched down 1% YoY in May, after the 8% YoY drop in April, according to the MINEM data. Although the Peruvian government plans to boost domestic Cu supply 9% YoY in 2024 (after the +13% YoY in 2023), output on the 5mo24 basis remained broadly flat YoY. In our view, the YTD dynamics add some scepticism to the announced plan
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) gained 5% YoY in May
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
💎 De Beers has allowed sightholders to defer some rough purchases at its 6th cycle in 2024, Rapaport reports, citing a miner’s message. Hence, sightholders will be able to avoid buying up to 50% of their allocations for <0.75ct diamonds (of medium and high quality) at the upcoming July trading session. In addition, De Beers is to allow sightholders to sell up to 30% of certain rough back to the miner (this option is usually capped at 10%)
Overall, the announced measures are in line with De Beers’ price-over-volume strategy, and could brighten the sentiment on diamonds in 2024, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💎 De Beers has allowed sightholders to defer some rough purchases at its 6th cycle in 2024, Rapaport reports, citing a miner’s message. Hence, sightholders will be able to avoid buying up to 50% of their allocations for <0.75ct diamonds (of medium and high quality) at the upcoming July trading session. In addition, De Beers is to allow sightholders to sell up to 30% of certain rough back to the miner (this option is usually capped at 10%)
Overall, the announced measures are in line with De Beers’ price-over-volume strategy, and could brighten the sentiment on diamonds in 2024, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🇨🇳China’s grid accelerated its purchases of aluminium wire in early 2024, as a cheaper substitute for copper, Bloomberg reports. According to industry executives, China's State Grid (>80% of local electricity supplies) slowed its purchases of copper wire in recent months, as the red metal's prices remain near all time highs (at spot, +62% vs. 2019 level). At the same time, the State Grid’s tenders for aluminum cables rose 40% YoY, to 718kt in 4mo24
In our view, if China did start widely substituting copper with aluminium in its power networks, aluminum prices would enjoy material support. To recap, the grid accounts for 10-15% of Cu and Al consumption in China, on our numbers
#copper #aluminium
https://metals-wire.com/news-reports
🇨🇳China’s grid accelerated its purchases of aluminium wire in early 2024, as a cheaper substitute for copper, Bloomberg reports. According to industry executives, China's State Grid (>80% of local electricity supplies) slowed its purchases of copper wire in recent months, as the red metal's prices remain near all time highs (at spot, +62% vs. 2019 level). At the same time, the State Grid’s tenders for aluminum cables rose 40% YoY, to 718kt in 4mo24
In our view, if China did start widely substituting copper with aluminium in its power networks, aluminum prices would enjoy material support. To recap, the grid accounts for 10-15% of Cu and Al consumption in China, on our numbers
#copper #aluminium
https://metals-wire.com/news-reports
Morning Bites (part 1)
🔗CISA mills' daily crude steel production in early-July was reported at 2.15mnt, down 0.7% from the previous ten days and 4.0% lower than in the same period a year earlier. Meanwhile, local steel inventories grew 4.8% over the period (but were down 3.1% YoY). In our view, soft domestic steel demand, which was driving export growth, might continue to weigh on China’s steel output in the short term (-1.1% YoY in 1H24)
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in early-July was reported at 2.15mnt, down 0.7% from the previous ten days and 4.0% lower than in the same period a year earlier. Meanwhile, local steel inventories grew 4.8% over the period (but were down 3.1% YoY). In our view, soft domestic steel demand, which was driving export growth, might continue to weigh on China’s steel output in the short term (-1.1% YoY in 1H24)
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
💎 India’s rough diamond net imports shrank 30% YoY in June to USD 918mn, reversing from the 4% YoY growth in May. In terms of volumes, net imports were down 19% YoY to 7.8mnct. India’s polished diamond net exports were down 25% YoY (vs. -19% YoY in May). Synthetic rough diamond net imports dropped 24% YoY, after the 16% YoY growth seen in May. The share of lab-grown net rough imports in total trading stood at 6% in June. On our numbers, the Indian midstream remains in the stock accumulation zone
India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India’s rough diamond net imports shrank 30% YoY in June to USD 918mn, reversing from the 4% YoY growth in May. In terms of volumes, net imports were down 19% YoY to 7.8mnct. India’s polished diamond net exports were down 25% YoY (vs. -19% YoY in May). Synthetic rough diamond net imports dropped 24% YoY, after the 16% YoY growth seen in May. The share of lab-grown net rough imports in total trading stood at 6% in June. On our numbers, the Indian midstream remains in the stock accumulation zone
India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🚘EU + UK passenger car registrations grew 4% YoY in June, after the -2% YoY in May. The dynamics were in line with our estimates. Meanwhile, the sales were still 12% below the pre-COVID, 2019 level. We maintain our view that EU car sales are likely to remain sluggish, at least in the short term, given the still weak local economic activity in the region (as indicated by the EU PMI remaining <50), which is a negative factor for PGM consumption
To recap, in 2023 the EU+UK accounted for some 23% and 30% of world autocatalyst Pd and Pt demand, respectively
#cars
https://metals-wire.com/sector/PGM
🚘EU + UK passenger car registrations grew 4% YoY in June, after the -2% YoY in May. The dynamics were in line with our estimates. Meanwhile, the sales were still 12% below the pre-COVID, 2019 level. We maintain our view that EU car sales are likely to remain sluggish, at least in the short term, given the still weak local economic activity in the region (as indicated by the EU PMI remaining <50), which is a negative factor for PGM consumption
To recap, in 2023 the EU+UK accounted for some 23% and 30% of world autocatalyst Pd and Pt demand, respectively
#cars
https://metals-wire.com/sector/PGM
Week ahead data releases in M&M
With the reporting season ongoing, several major M&M companies are due to report their earnings this week. As concerns Anglo American, Amplats and Teck, we are more conservative than the consensus estimates on their EBITDA
We also await the World Steel monthly production statistics, which are scheduled for Tuesday
#reporting_season
https://metals-wire.com/events
With the reporting season ongoing, several major M&M companies are due to report their earnings this week. As concerns Anglo American, Amplats and Teck, we are more conservative than the consensus estimates on their EBITDA
We also await the World Steel monthly production statistics, which are scheduled for Tuesday
#reporting_season
https://metals-wire.com/events
Morning Bites (part 1)
🚗💨Internal combustion engine (ICE) car registrations in Europe declined 3% YoY in 2Q24, after the -4% YoY in 1Q24 (and were also -58% vs. 2Q19 level). Petrol car sales shrank 2% YoY (vs. -1% YoY in 1Q24), while diesel cars were down 5% YoY. Diesel cars accounted for 25% of total ICE car registrations (24% in 1Q24). Overall, the figures remain well below the pre-Covid levels, stressing PGM demand. To recap, the EU represents 23% and 30% of global Pd and Pt autocatalyst demand, respectively
🚘 EV sales in Europe inched down 2% YoY in 2Q24, after the +6% YoY in 1Q24. Specifically, BEV sales were flat YoY (vs. +3% YoY in 1Q24), while PHEV sales dipped 7% YoY. The share of BEVs in total EV sales was 68% (64% in 1Q24). Despite some slowdown in local sales, the growing global attractiveness of EVs is likely to provide further support to 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 3% YoY in 2Q24, after the -4% YoY in 1Q24 (and were also -58% vs. 2Q19 level). Petrol car sales shrank 2% YoY (vs. -1% YoY in 1Q24), while diesel cars were down 5% YoY. Diesel cars accounted for 25% of total ICE car registrations (24% in 1Q24). Overall, the figures remain well below the pre-Covid levels, stressing PGM demand. To recap, the EU represents 23% and 30% of global Pd and Pt autocatalyst demand, respectively
🚘 EV sales in Europe inched down 2% YoY in 2Q24, after the +6% YoY in 1Q24. Specifically, BEV sales were flat YoY (vs. +3% YoY in 1Q24), while PHEV sales dipped 7% YoY. The share of BEVs in total EV sales was 68% (64% in 1Q24). Despite some slowdown in local sales, the growing global attractiveness of EVs is likely to provide further support to 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 (part 2)
💍Richemont jewellery segment sales grew 2% YoY in 2Q24, after the 1% YoY drop in 1Q24, according to a press release from the retailer. Specifically, sales growth was recorded across almost all regions: Japan (+42% YoY), the Americas (+11% YoY) and Europe (+4% YoY). There was only a slowdown in Asia Pacific (-19% YoY), due to both lower consumer confidence and the 2023 high base effect, Richemont explained. We reiterate our view that the gradual recovery in US demand (53% of global gem-set jewellery trade) could speed up the release of industry inventories, supporting sentiment in the global diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
💍Richemont jewellery segment sales grew 2% YoY in 2Q24, after the 1% YoY drop in 1Q24, according to a press release from the retailer. Specifically, sales growth was recorded across almost all regions: Japan (+42% YoY), the Americas (+11% YoY) and Europe (+4% YoY). There was only a slowdown in Asia Pacific (-19% YoY), due to both lower consumer confidence and the 2023 high base effect, Richemont explained. We reiterate our view that the gradual recovery in US demand (53% of global gem-set jewellery trade) could speed up the release of industry inventories, supporting sentiment in the global diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🏭Global primary aluminium output rose 3.2% YoY in June, roughly in line with the revised +3.5% YoY in May, according to data from the International Aluminium Institute. Specifically, China’s production (59% of global Al output) rose 4.2% YoY, following improved power supply from the country's hydroelectric system, as well as smelters’ solidified margins. Although spot Al prices shrank 7% MoM to USD 2,330/t, amid the lack of new material economic support measures in China, Al is trading below its fundamentally reasonable level for 2024 (USD >2,500/t), on our numbers
Furthermore, China’s Al output is capped at 45mnt (vs. 43.5mnt annualised in 1H24), implying limited potential for additional supply growth
We reiterate our view that the strong consumption dynamics in China (incl. solid demand from the local new energy sector and grid), as well as the widely expected monetary easing in the US in 2024, could well add support to Al prices
#aluminium
https://metals-wire.com/sector/Aluminium
🏭Global primary aluminium output rose 3.2% YoY in June, roughly in line with the revised +3.5% YoY in May, according to data from the International Aluminium Institute. Specifically, China’s production (59% of global Al output) rose 4.2% YoY, following improved power supply from the country's hydroelectric system, as well as smelters’ solidified margins. Although spot Al prices shrank 7% MoM to USD 2,330/t, amid the lack of new material economic support measures in China, Al is trading below its fundamentally reasonable level for 2024 (USD >2,500/t), on our numbers
Furthermore, China’s Al output is capped at 45mnt (vs. 43.5mnt annualised in 1H24), implying limited potential for additional supply growth
We reiterate our view that the strong consumption dynamics in China (incl. solid demand from the local new energy sector and grid), as well as the widely expected monetary easing in the US in 2024, could well add support to Al prices
#aluminium
https://metals-wire.com/sector/Aluminium