Morning Bites
📌China’s new internal combustion engine car sales dropped 21% YoY in July, accelerating from the -17% YoY in June. The figures remained well below their pre-Covid level (-27% vs. July 2019), amid the strong appetite for EVs, which continues to pressure PGM consumption (the share of local ICE sales dropped to 56% last month - the lowest point ever). 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 27% YoY in July, following the +30% YoY in June. 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 ~58% of global EV sales in 1H24
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
📌China’s new internal combustion engine car sales dropped 21% YoY in July, accelerating from the -17% YoY in June. The figures remained well below their pre-Covid level (-27% vs. July 2019), amid the strong appetite for EVs, which continues to pressure PGM consumption (the share of local ICE sales dropped to 56% last month - the lowest point ever). 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 27% YoY in July, following the +30% YoY in June. 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 ~58% of global EV sales in 1H24
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
Morning Bites (part 1)
🇵🇪 Peru’s copper output slid 12% YoY in June, after the 1% YoY drop in May, per Ministry of Energy and Mines data. According to the Ministry, the June drop was partly explained by the lower performance of assets controlled by Chinese companies: Chinalco (-61% YoY) and MMG (-13% YoY)
The Peruvian government plans to increase Cu supply 9% YoY in 2024 (after the +13% YoY in 2023). For 1H24, however, output was down 2% YoY. In our view, the YTD dynamics suggest a sceptical view of the announced plan
Peru accounts for ~12% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
🇵🇪 Peru’s copper output slid 12% YoY in June, after the 1% YoY drop in May, per Ministry of Energy and Mines data. According to the Ministry, the June drop was partly explained by the lower performance of assets controlled by Chinese companies: Chinalco (-61% YoY) and MMG (-13% YoY)
The Peruvian government plans to increase Cu supply 9% YoY in 2024 (after the +13% YoY in 2023). For 1H24, however, output was down 2% YoY. In our view, the YTD dynamics suggest a sceptical view of the announced plan
Peru accounts for ~12% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 2)
🇿🇦South Africa’s PGM mining output shrank 6% YoY in June, following the 4% YoY decline in May, according to official statistics. The country’s gold production was also 13% lower YoY, after the 9% YoY drop in May
In our view, the ongoing shift to EVs globally remains a key factor weighing on PGM consumption. 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 shrank 6% YoY in June, following the 4% YoY decline in May, according to official statistics. The country’s gold production was also 13% lower YoY, after the 9% YoY drop in May
In our view, the ongoing shift to EVs globally remains a key factor weighing on PGM consumption. 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)
💎A third of Surat diamond polishers have reported temporary closures or have cut working weeks to 2-3 days as the slump in global demand persists, IDEX reports. The news follows a recent announcement made by Kiran Gems (one of the key midstream producers) that it would halt production on 17-27 August, with the aim of rebalancing supply and supporting prices. Historically the Indian midstream provides ~95% of global polished supply
Although midstream inventories remain elevated, production stoppages in the Indian polishing sector, as well as De Beers’ August tender cancellation, might, combined with stable downstream demand, accelerate industry stock release in 2H24 and in turn lift sentiment in the stressed diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
💎A third of Surat diamond polishers have reported temporary closures or have cut working weeks to 2-3 days as the slump in global demand persists, IDEX reports. The news follows a recent announcement made by Kiran Gems (one of the key midstream producers) that it would halt production on 17-27 August, with the aim of rebalancing supply and supporting prices. Historically the Indian midstream provides ~95% of global polished supply
Although midstream inventories remain elevated, production stoppages in the Indian polishing sector, as well as De Beers’ August tender cancellation, might, combined with stable downstream demand, accelerate industry stock release in 2H24 and in turn lift sentiment in the stressed diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
🗞Today, China has published its industrial production data for July (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 dropped 9% YoY in July, after the flat YoY dynamics seen in June. Meanwhile, production remained 2% lower YoY in 7mo24, amid slow domestic demand and subdued steel margins, according to the world’s largest steelmaker, Baowu. China represents ~57% of global steel supply
🏢China's property sales decreased 12% YoY in July (after the -14% YoY in June), and were 52% below the 2021 level. Floor space starts declined 19% YoY in July (after the -22% YoY), and were -68% vs. 2021. Personal mortgage loans were 34% lower YoY (vs. -25%), while property completions dropped 22% YoY (vs. -33% YoY). We reiterate our view that more government support measures are needed for a full-scale recovery in the stressed property sector
#steel #property
https://metals-wire.com/sector/Steel
🔗China’s crude steel output dropped 9% YoY in July, after the flat YoY dynamics seen in June. Meanwhile, production remained 2% lower YoY in 7mo24, amid slow domestic demand and subdued steel margins, according to the world’s largest steelmaker, Baowu. China represents ~57% of global steel supply
🏢China's property sales decreased 12% YoY in July (after the -14% YoY in June), and were 52% below the 2021 level. Floor space starts declined 19% YoY in July (after the -22% YoY), and were -68% vs. 2021. Personal mortgage loans were 34% lower YoY (vs. -25%), while property completions dropped 22% YoY (vs. -33% YoY). We reiterate our view that more government support measures are needed for a full-scale recovery in the stressed property sector
#steel #property
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🏦 China’s aggregate financing rose 46% YoY in July to CNY 0.77tn, reversing from the 22% YoY drop in June (-15% YoY on the 7mo24 basis). Meanwhile, traditional bank loans declined 25% YoY, missing the consensus estimates by 42%. We maintain our view that more government support measures would be required to trigger a full-scale recovery in China’s property sector and support the construction demand for industrial metals in 2H24
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 46% YoY in July to CNY 0.77tn, reversing from the 22% YoY drop in June (-15% YoY on the 7mo24 basis). Meanwhile, traditional bank loans declined 25% YoY, missing the consensus estimates by 42%. We maintain our view that more government support measures would be required to trigger a full-scale recovery in China’s property sector and support the construction demand for industrial metals in 2H24
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 (part 3)
🇨🇱 Workers at BHP's Escondida copper mine have gone on strike after failing to reach a wage agreement with management, Bloomberg reports. The protests at the world’s largest copper mine (~5% of global Cu mined supply in 2023) began on 13 August. Workers have rejected terms that included a signing bonus of $28,900 each and have demanded 1% of shareholder dividends to be distributed equally among them, citing the favorable current and projected prices of copper. The last significant strike at Escondida took place in 2017 and lasted 44 days (reducing Cu production by ~120kt), driving up global copper prices
In our view, the strike could, if it persists, stress the global Cu supply, which would in turn be favourable for prices. Meanwhile, we maintain our positive view on copper, amid growing demand for renewables globally, and surging investments in China’s grid infrastructure
#copper
https://metals-wire.com/sector/Copper
🇨🇱 Workers at BHP's Escondida copper mine have gone on strike after failing to reach a wage agreement with management, Bloomberg reports. The protests at the world’s largest copper mine (~5% of global Cu mined supply in 2023) began on 13 August. Workers have rejected terms that included a signing bonus of $28,900 each and have demanded 1% of shareholder dividends to be distributed equally among them, citing the favorable current and projected prices of copper. The last significant strike at Escondida took place in 2017 and lasted 44 days (reducing Cu production by ~120kt), driving up global copper prices
In our view, the strike could, if it persists, stress the global Cu supply, which would in turn be favourable for prices. Meanwhile, we maintain our positive view on copper, amid growing demand for renewables globally, and surging investments in China’s grid infrastructure
#copper
https://metals-wire.com/sector/Copper
Morning Bites
🔗CISA mills' daily crude steel production in early August was reported at 2.00mnt, +1.5% vs. the previous ten days, but 6.9% lower YoY. YTD output (up to 10 August) was down 2.2% YoY. At the same time, local steel inventories slid 0.9% over the period (also being down 0.9% YoY). We reiterate our view that soft domestic steel demand, which has triggered export growth, might keep weighing on China’s steel output in the near term, unless new material economic support measures are announced by Beijing
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in early August was reported at 2.00mnt, +1.5% vs. the previous ten days, but 6.9% lower YoY. YTD output (up to 10 August) was down 2.2% YoY. At the same time, local steel inventories slid 0.9% over the period (also being down 0.9% YoY). We reiterate our view that soft domestic steel demand, which has triggered export growth, might keep weighing on China’s steel output in the near term, unless new material economic support measures are announced by Beijing
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Week ahead data releases in M&M
As the reporting season continues apace, several major M&M names are scheduled to release their 1H24/2Q24 financials this week. Our EBITDA estimates for Antofagasta and SQM are somewhat below the consensus
#reporting_season
https://metals-wire.com/events
As the reporting season continues apace, several major M&M names are scheduled to release their 1H24/2Q24 financials this week. Our EBITDA estimates for Antofagasta and SQM are somewhat below the consensus
#reporting_season
https://metals-wire.com/events
Morning Bites
🇨🇱Chile’s copper output slid 1% YoY in June, after the +8% YoY seen in May, according to data from the INE. To recap, top Chilean miner Codelco (~7% of global Cu supply) plans to increase production by up to 5% YoY in 2024. In our view, this might support local output, which is still pressured by negative structural effects (e.g. ore depletion) and the unfavourable weather conditions
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) fell 5% YoY in June
#copper
https://metals-wire.com/sector/Copper
🇨🇱Chile’s copper output slid 1% YoY in June, after the +8% YoY seen in May, according to data from the INE. To recap, top Chilean miner Codelco (~7% of global Cu supply) plans to increase production by up to 5% YoY in 2024. In our view, this might support local output, which is still pressured by negative structural effects (e.g. ore depletion) and the unfavourable weather conditions
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) fell 5% YoY in June
#copper
https://metals-wire.com/sector/Copper
Morning Bites
💎 India’s rough diamond net imports shrank 12% YoY in July to USD 870mn, after the 30% YoY drop in June. In terms of volumes, net imports were down 36% YoY to 6.2mnct. India’s polished diamond net exports declined 18% YoY (vs. -25% YoY in June). Synthetic rough diamond net imports dropped 25% YoY, after the 24% YoY drop seen in June. The share of lab-grown net rough imports in total trading was 9% in July. On our numbers, the Indian midstream remained in the stock accumulation zone last month
India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India’s rough diamond net imports shrank 12% YoY in July to USD 870mn, after the 30% YoY drop in June. In terms of volumes, net imports were down 36% YoY to 6.2mnct. India’s polished diamond net exports declined 18% YoY (vs. -25% YoY in June). Synthetic rough diamond net imports dropped 25% YoY, after the 24% YoY drop seen in June. The share of lab-grown net rough imports in total trading was 9% in July. On our numbers, the Indian midstream remained in the stock accumulation zone last month
India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
🏭Global primary aluminium output rose 2.4% YoY in July, decelerating from the revised +3.9% YoY in June, according to the International Aluminium Institute data. China’s production (60% of global Al output in July) rose 2.5% YoY, despite the recent price weakness. We maintain our view that spot Al continues to trade below its fundamentally reasonable level for 2024 (USD >2,500/t), on our numbers
We also note that there is limited potential for additional supply growth in China, as local Al output is capped at 45mnt (vs. ~43mnt annualised in 7mo24)
Overall, strong consumption dynamics in China (incl. solid demand from the local new energy sector and grid), as well as the potential Fed Funds rate cut in September 2024, might add material support to Al prices later this year
#aluminium
https://metals-wire.com/sector/Aluminium
🏭Global primary aluminium output rose 2.4% YoY in July, decelerating from the revised +3.9% YoY in June, according to the International Aluminium Institute data. China’s production (60% of global Al output in July) rose 2.5% YoY, despite the recent price weakness. We maintain our view that spot Al continues to trade below its fundamentally reasonable level for 2024 (USD >2,500/t), on our numbers
We also note that there is limited potential for additional supply growth in China, as local Al output is capped at 45mnt (vs. ~43mnt annualised in 7mo24)
Overall, strong consumption dynamics in China (incl. solid demand from the local new energy sector and grid), as well as the potential Fed Funds rate cut in September 2024, might add material support to Al prices later this year
#aluminium
https://metals-wire.com/sector/Aluminium
Morning Bites (part 2)
☢️ China has ordered the construction of 11 new nuclear reactors as part of its emissions reduction plans, Bloomberg reports. The country has 56 reactors in operation (and now 41 units under construction), accounting for ~5% of its total generation mix in 2023. China currently has more nuclear reactors under construction than any other nation in the world, and approved 10 new units in both 2022 and 2023
Although there are few details on the new reactors, they are expected to launch by 2029. On our numbers, the 11 new units might account for 3-4% of global uranium demand in 2023, based on recent projects, which would represent long-term support for uranium fundamentals
#uranium
https://metals-wire.com/sector/Uranium
☢️ China has ordered the construction of 11 new nuclear reactors as part of its emissions reduction plans, Bloomberg reports. The country has 56 reactors in operation (and now 41 units under construction), accounting for ~5% of its total generation mix in 2023. China currently has more nuclear reactors under construction than any other nation in the world, and approved 10 new units in both 2022 and 2023
Although there are few details on the new reactors, they are expected to launch by 2029. On our numbers, the 11 new units might account for 3-4% of global uranium demand in 2023, based on recent projects, which would represent long-term support for uranium fundamentals
#uranium
https://metals-wire.com/sector/Uranium
Morning Bites (part 3)
🇨🇱 The union at BHP’s Escondida copper mine has signed a new deal, ending a short lasting strike, according to a company statement. BHP did not provide any details on the deal with the union, but earlier sources at the company and the union told Reuters that workers were offered ~USD 32,000 as a bonus and an additional USD 2,000 in soft loans
#copper
https://metals-wire.com/sector/Copper
🇨🇱 The union at BHP’s Escondida copper mine has signed a new deal, ending a short lasting strike, according to a company statement. BHP did not provide any details on the deal with the union, but earlier sources at the company and the union told Reuters that workers were offered ~USD 32,000 as a bonus and an additional USD 2,000 in soft loans
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
🏗 China has approved a CNY 1.4tn (USD 196bn) support package for 5.4k real estate projects, Xinhua reports, citing National Financial Regulatory Administration officials. The announced measures exceed market expectations, as in late-March commercial banks reached a preliminary agreement to fund CNY ~520bn (USD 72bn) for 2.1k projects. Meanwhile, some local mills also noted improved demand for rebar
In our view, the announced package for 'frozen projects' might add support to the weakened sentiment in the steel market
However, we recap that China’s unsold housing stock remains large, at approximately 3.6bn sqf, with an estimated cost of some CNY 7tn
#steel
https://metals-wire.com/sector/Steel
🏗 China has approved a CNY 1.4tn (USD 196bn) support package for 5.4k real estate projects, Xinhua reports, citing National Financial Regulatory Administration officials. The announced measures exceed market expectations, as in late-March commercial banks reached a preliminary agreement to fund CNY ~520bn (USD 72bn) for 2.1k projects. Meanwhile, some local mills also noted improved demand for rebar
In our view, the announced package for 'frozen projects' might add support to the weakened sentiment in the steel market
However, we recap that China’s unsold housing stock remains large, at approximately 3.6bn sqf, with an estimated cost of some CNY 7tn
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🥉Global mined copper production slid 1.7% YoY in June, after increasing 0.8% YoY in May, the International Copper Study Group (ICSG) reports. Over 1H24, output was up 3.1% YoY, due to production recovery at existing assets (mainly in Chile, Indonesia, and the USA), as well as additional production from mine projects ramping up to capacity, namely in the DR Congo (~11% of global supply). Meanwhile, the ICSG notes strong refined copper consumption (+3.3% YoY in 1H24), particularly in China (+5.5% YoY)
Overall, we maintain our positive view on copper, amid growing demand for renewables globally, and surging investments in China’s grid infrastructure
#copper
https://metals-wire.com/sector/Copper
🥉Global mined copper production slid 1.7% YoY in June, after increasing 0.8% YoY in May, the International Copper Study Group (ICSG) reports. Over 1H24, output was up 3.1% YoY, due to production recovery at existing assets (mainly in Chile, Indonesia, and the USA), as well as additional production from mine projects ramping up to capacity, namely in the DR Congo (~11% of global supply). Meanwhile, the ICSG notes strong refined copper consumption (+3.3% YoY in 1H24), particularly in China (+5.5% YoY)
Overall, we maintain our positive view on copper, amid growing demand for renewables globally, and surging investments in China’s grid infrastructure
#copper
https://metals-wire.com/sector/Copper
Morning Bites
🔗Global crude steel output dropped 5% YoY to 153mnt in July, after the <1% YoY growth seen in June, according to the World Steel Association data. China’s production (~54% of global crude steel supply in July) was down 9% YoY, after the flat dynamics in June. Ex-China steel output inched up 1% YoY in July, the same as in June. Specifically, last month, Russian production declined 3% YoY, while US and EU output grew 2% and 6% YoY, respectively. Indian output (~8% of global steel supply) rose another 7% YoY (vs. +6% YoY in June)
Although steel market sentiment has been depressed in recent months, the recently announced new support package for China’s unfinished real estate projects might bolster local construction activity, we believe
#steel
https://metals-wire.com/sector/Steel
🔗Global crude steel output dropped 5% YoY to 153mnt in July, after the <1% YoY growth seen in June, according to the World Steel Association data. China’s production (~54% of global crude steel supply in July) was down 9% YoY, after the flat dynamics in June. Ex-China steel output inched up 1% YoY in July, the same as in June. Specifically, last month, Russian production declined 3% YoY, while US and EU output grew 2% and 6% YoY, respectively. Indian output (~8% of global steel supply) rose another 7% YoY (vs. +6% YoY in June)
Although steel market sentiment has been depressed in recent months, the recently announced new support package for China’s unfinished real estate projects might bolster local construction activity, we believe
#steel
https://metals-wire.com/sector/Steel