Morning Bites

🚘EU + UK passenger car registrations were flat YoY in July, after the 4% YoY increase in June. The dynamics matched our estimates. The July sales figures were still 23% 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), which might further weigh on PGM consumption

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

Morning Bites

💍China’s jewellery and watch retail sales slid 12% YoY in July, after the 11% YoY gain in June. Meanwhile, on the 7mo24 basis, sales were broadly flat YoY. According to Rapaport, local demand for engagement rings was rather weak in July, while Mainland consumers preferred spending at overseas destinations. Despite the soft Chinese dynamics, we reiterate our view that the ongoing recovery in US downstream demand (~53% of global retail gem-set jewellery trade) could accelerate the release of industry inventories in 2H24, supporting sentiment in the stressed diamond market

#diamonds 
https://metals-wire.com/sector/Diamonds

Morning Bites

💍Hong Kong jewellery and watch sales dropped 25% YoY in July, accelerating from the 23% YoY decline in June, according to the government data. Sales were also -32% vs. the pre-Covid 2019 level. According to Rapaport, local demand was subdued in July, as consumers from the Mainland preferred spending abroad, which weighed on sales in Hong Kong, as the main consumers in HK are from China. Despite soft demand in HK, sentiment on the key US market (~53% of the world's gem-set jewellery trade) remains strong. That might accelerate the industry's stock release in 2024 and add support to the stressed diamond sector, we believe

#diamonds
https://metals-wire.com/sector/Diamonds

Morning Bites (part 1)

🏦 Global central banks purchased net 37t of gold in July, vs. the +12t in June, the World Gold Council (WGC) reports. This marked the 14th consecutive month of reserve accumulation. The major contributors in July were Poland and Uzbekistan (+14t and +10t, respectively), while only Kazakhstan sold a notable amount (4t)

We maintain our view that gold is still trading above its fundamentally reasonable level for 2024 (USD 2,300-2,400/oz) due to persistently strong demand from global central banks and in light of the widely expected US Fed funds rate cut in September 2024. However, we see more upside risk in gold prices amid continued geopolitical unrest, as well as renewed purchases by ETFs

#gold    
https://metals-wire.com/sector/Gold

Morning Bites (part 2)

🌏Global manufacturing PMIs remained soft in August. The Eurozone Markit Manufacturing PMI stood flat at 45.8 for the third consecutive month. The US ISM manufacturing PMI was at 47.2 (below market expectations of 48.8)

🇨🇳The official NBS Manufacturing PMI in China shrank further to 49.1 in August (from 49.4 a month ago). Meanwhile, the Caixin China Manufacturing PMI rebounded to 50.4 in August — ahead of the forecasts of 50.0

🇮🇳 Although the Indian manufacturing PMI slowed further to 57.5 (vs. the consensus of 57.8), it remains one the strongest indicators among the world's key economies

❗️Overall, most global PMIs remained below 50.0 in August, indicating an ongoing slowdown in manufacturing activity. However, consistently strong PMI data from India might partly offset the negative impact on demand for industrial metals (e.g. steel, aluminum and copper), we believe

#PMIs
https://metals-wire.com/news-reports

Morning Bites

💎US jewellery sales rose 6% YoY in July, after the revised 5% YoY gain in June, marking the 9th consecutive YoY gain, IDEX reports, citing the US Department of Commerce. According to Rapaport, retail sales remained steady at mid- and high-end jewelers in July, while wholesalers aimed to hold limited diamond stock

We reiterate our view that solid sales recovery in the world's key US downstream market (~53% of global retail gem-set jewellery trade) could accelerate the release of industry inventories in 2H24, supporting sentiment in the stressed diamond market

#diamonds 
https://metals-wire.com/sector/Diamonds

Morning Bites (part 1)

📈Gold-backed ETFs purchased 29t net in August, following the +48t in July. According to the World Gold Council (WGC), inflows were recorded across all regions: North American funds raised 17t, while European funds added 8t. As we have noted previously, the return of ETFs to gold buying, after a long period of net selling, creates additional positive momentum for the metal

We maintain our view that gold is still trading above its fundamentally reasonable level for 2024 (USD 2,300-2,400/oz) amid persistently strong demand from global central banks and the widely expected US Fed funds rate cut in September 2024. However, we see more upside risk in gold prices following geopolitical factors, as well as ETFs’ return to gold buying

#ETF #gold
https://metals-wire.com/news-reports

Morning Bites (part 2)

💎The GJEPC has noted a looming recovery in the diamond industry, according to the council’s letter. Significant reductions in polished diamond inventories across markets indicate that supply (which might be significantly lower YoY in 2024) is now more aligned with demand, providing a basis for price stabilisation. The GJEPC also highlighted the strong sales momentum in August, in addition to price increases in certain diamond segments

As we have noted previously, solid US downstream demand (~53% of the global gem-set jewellery trade) would accelerate the diamond sector recovery in 2H24, while the upcoming festive season is expected to see good sales

#diamonds 
https://metals-wire.com/sector/Diamonds

Morning Bites

🚘New car registrations in France, the UK, Spain, Italy and Germany dropped 20% YoY in August, after the 1% YoY gain in July, and remained firmly below their pre-COVID level (-30% vs. August 2019). In Germany and Spain, car sales were 37% and 30% below their 2019 levels, respectively, while registrations in France were 33% weaker. As for Italy and the UK, sales were 22% and 9% below August 2019, respectively

Given that these five countries represented >70% of new vehicle registrations in Europe in 2023, the region’s car sales likely declined YoY last month, remaining well below their pre-pandemic levels

#cars     
https://metals-wire.com/sector/PGM

🗞Today, China published its preliminary import/export statistics for August (see table above)

#statistics #China
https://metals-wire.com/news-reports

Morning Bites (part 2)

🔗CISA mills daily crude steel production in late-August was reported at 1.89mnt, the lowest point this year (-5.4% vs. the previous ten days and -7.8% YoY). Meanwhile, for 8mo24, output was down 2.8% YoY. At the same time, local steel inventories slid 11.6% over the period (but were up 1.2% YoY). We reiterate our view that soft domestic steel demand might continue to weigh on China’s steel output in the near term, unless new material economic support measures are announced

China accounts for ~57% of global steel supply

#steel  
https://metals-wire.com/sector/Steel

Morning Bites (part 3)

🚘US light vehicle sales grew 6% YoY in August, reversing from the -3% YoY in July. The figure was still 15% below the pre-Covid 2019 level. Meanwhile, seasonally-adjusted sales volumes were flat YoY last month but 12% lower than the August 2019 level. We believe that continuously soft automotive demand, along with the growing appetite for EVs globally, are likely to weigh further on PGM consumption

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

🏗China’s excavator sales grew 12% YoY in August (domestic + export), accelerating from the +9% YoY in July, according to the CCMA data. The figure slightly exceeded the CME estimates. Specifically, domestic sales were up 18% YoY (but still 46% below the August 2021 level). Despite the positive dynamics seen in recent months, we note that the major sales volumes usually take place in February-April, making the summer period less representative. We maintain our view that more government support measures are required for a full-scale recovery in China’s property sector

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

Morning Bites

🇨🇱Chile’s copper output rose 2% YoY in July, reversing from the 1% YoY decline in June, according to the INE data. Meanwhile, on a 7mo24 basis, the country’s Cu output was up ~2% YoY. To recap, Chile's leading miner, Codelco (~7% of global Cu supply), plans to increase production by up to 5% YoY in 2024. In our view, this plan looks rather ambitious, as the miner’s output was down 8% YoY in 1H24, pressured by negative structural effects (e.g. ore depletion) and unfavourable weather conditions. Furthermore, we note that Codelco failed to reach its previous guidance (1.33mnt in 2023 vs. 1.45mnt initially planned)

To recap, Chile accounts for ~24% of global Cu supply

#copper
https://metals-wire.com/sector/Copper

Morning Bites (part 2)

🇿🇦South Africa’s PGM mining output inched down 1% YoY in July, after the 6% YoY drop in June, according to official statistics. The country’s gold production fell 4% YoY, decelerating from the 13% YoY fall in June. In our view, unfavourable market conditions will likely keep weighing on PGM production in 2H24, as demand from the automotive sector remains subdued, which is accentuated by 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

🗞Last weekend, China has published its industrial production data for August (see table above)

#statistics #China
https://metals-wire.com/news-reports