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
🇨🇱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 1)
📌China’s new internal combustion engine car sales plunged 22% YoY in August, in line with the -21% YoY in July. The figures continue to be materially below their pre-Covid level (-28% vs. August 2019), amid the strong appetite for EVs, thus affecting PGM consumption (the share of local ICE car sales declined to 55% last month - another historical low). We recap that the Chinese automotive sector accounts for 20% and 17% of global Pd and Pt demand, respectively
📌New EV sales in China jumped 30% YoY in August, following the +27% YoY in July. In our view, 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 ~58% of global EV sales in 1H24
#cars #EV #nickel #lithium #cobalt
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📌China’s new internal combustion engine car sales plunged 22% YoY in August, in line with the -21% YoY in July. The figures continue to be materially below their pre-Covid level (-28% vs. August 2019), amid the strong appetite for EVs, thus affecting PGM consumption (the share of local ICE car sales declined to 55% last month - another historical low). We recap that the Chinese automotive sector accounts for 20% and 17% of global Pd and Pt demand, respectively
📌New EV sales in China jumped 30% YoY in August, following the +27% YoY in July. In our view, 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 ~58% of global EV sales in 1H24
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com/news-reports
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
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🇿🇦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
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🗞Last weekend, China has published its industrial production data for August (see table above)
#statistics #China
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#statistics #China
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Morning Bites (part 1)
🔗China’s crude steel output dropped another 10% YoY in August, after the 9% YoY decline in July. Meanwhile, production remained 3% lower YoY on an 8mo24 basis, in response to weak demand, driven by the ongoing slump in construction activity and soft consumer confidence, according to Bloomberg, which also led to elevated exports (+18% YoY in August). China represents ~57% of global steel supply
🏢China's property sales decreased 13% YoY in August (after the 12% YoY decline in July), and were 49% below the 2021 level. Floor space starts declined 17% YoY in August (after the 19% YoY contraction in July), and were 65% lower than in 2021. Personal mortgage loans were 22% lower YoY (vs. the 34% YoY decrease a month ago), while property completions fell 37% YoY (vs. the 22% YoY decrease in July). We reiterate our view that more state 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 another 10% YoY in August, after the 9% YoY decline in July. Meanwhile, production remained 3% lower YoY on an 8mo24 basis, in response to weak demand, driven by the ongoing slump in construction activity and soft consumer confidence, according to Bloomberg, which also led to elevated exports (+18% YoY in August). China represents ~57% of global steel supply
🏢China's property sales decreased 13% YoY in August (after the 12% YoY decline in July), and were 49% below the 2021 level. Floor space starts declined 17% YoY in August (after the 19% YoY contraction in July), and were 65% lower than in 2021. Personal mortgage loans were 22% lower YoY (vs. the 34% YoY decrease a month ago), while property completions fell 37% YoY (vs. the 22% YoY decrease in July). We reiterate our view that more state 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)
💍Signet has reported a 3.4% YoY drop in same-store sales in 2Q24 (May-July), decelerating from the -8.9% YoY in 1Q24. However, we note that sequential same store sales improved for the fifth consecutive quarter. According to the retailer’s press release, same store sales in North America shrank 3.7% YoY, while proceeds from the international segment inched up 1.7% YoY
We reiterate our view that the solid sales recovery in the world's key US downstream market (~53% of global retail gem-set jewellery trade) could accelerate the ongoing destocking in 2H24, supporting sentiment in the stressed diamond market
#diamonds
https://metals-wire.com/news-reports
💍Signet has reported a 3.4% YoY drop in same-store sales in 2Q24 (May-July), decelerating from the -8.9% YoY in 1Q24. However, we note that sequential same store sales improved for the fifth consecutive quarter. According to the retailer’s press release, same store sales in North America shrank 3.7% YoY, while proceeds from the international segment inched up 1.7% YoY
We reiterate our view that the solid sales recovery in the world's key US downstream market (~53% of global retail gem-set jewellery trade) could accelerate the ongoing destocking in 2H24, supporting sentiment in the stressed diamond market
#diamonds
https://metals-wire.com/news-reports
Morning Bites
🏦 China’s aggregate financing declined 3% YoY in August to CNY 3.03tn, reversing from the 46% YoY spike in July (and was also -13% YoY on the 8mo24 basis). Meanwhile, traditional bank loans dropped 34% YoY, missing the consensus estimates by 12%. We reiterate our view that more economic support measures are needed for a full-scale recovery in the stressed Chinese property sector
China accounts for 52% of global steel consumption, and for 57% and 61% of world Cu and Al demand, respectively
#global
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🏦 China’s aggregate financing declined 3% YoY in August to CNY 3.03tn, reversing from the 46% YoY spike in July (and was also -13% YoY on the 8mo24 basis). Meanwhile, traditional bank loans dropped 34% YoY, missing the consensus estimates by 12%. We reiterate our view that more economic support measures are needed for a full-scale recovery in the stressed Chinese property sector
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
🇵🇪 Peru’s copper output declined 3% YoY in July, after the 12% YoY decrease in June, per MINEM data. Although the Peruvian government initially planned to boost domestic Cu supply 9% YoY in 2024 (after the 13% YoY increase in 2023), output on a 7mo24 basis has declined 2% YoY. According to the country’s deputy mining minister, Henry Luna, the YTD dynamics imply that actual production in 2024 will remain broadly flat YoY
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) was roughly unchanged YoY both in July and on a 7mo24 basis
#copper
https://metals-wire.com/sector/Copper
🇵🇪 Peru’s copper output declined 3% YoY in July, after the 12% YoY decrease in June, per MINEM data. Although the Peruvian government initially planned to boost domestic Cu supply 9% YoY in 2024 (after the 13% YoY increase in 2023), output on a 7mo24 basis has declined 2% YoY. According to the country’s deputy mining minister, Henry Luna, the YTD dynamics imply that actual production in 2024 will remain broadly flat YoY
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) was roughly unchanged YoY both in July and on a 7mo24 basis
#copper
https://metals-wire.com/sector/Copper
Morning Bites
💎 India’s rough diamond net imports slid 47% YoY in August, after the 12% YoY drop in July. In terms of volumes, net imports were down 46% YoY, mostly amid De Beers’ decision to cancel its August sight, we believe. India’s polished diamond net exports declined 22% YoY (vs. -18% YoY in July). Synthetic rough diamond net imports fell 8% YoY, after the 25% YoY drop seen in July. The share of lab-grown net rough imports in total trading was 18%, as natural imports were abnormally slow due to a one-off effect
We remind readers that GJEPC has recently underpinned the looming recovery in the diamond industry, following significant reductions in polished inventories across markets and price increases indicated in certain diamond segments. We continue to believe that in 4Q24, polishers will unwind their inventories, paving the way for massive restocking in 1Q25
India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India’s rough diamond net imports slid 47% YoY in August, after the 12% YoY drop in July. In terms of volumes, net imports were down 46% YoY, mostly amid De Beers’ decision to cancel its August sight, we believe. India’s polished diamond net exports declined 22% YoY (vs. -18% YoY in July). Synthetic rough diamond net imports fell 8% YoY, after the 25% YoY drop seen in July. The share of lab-grown net rough imports in total trading was 18%, as natural imports were abnormally slow due to a one-off effect
We remind readers that GJEPC has recently underpinned the looming recovery in the diamond industry, following significant reductions in polished inventories across markets and price increases indicated in certain diamond segments. We continue to believe that in 4Q24, polishers will unwind their inventories, paving the way for massive restocking in 1Q25
India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🚘EU + UK passenger car registrations dropped 17% YoY in August, after being flat YoY in July. The dynamics were broadly in-line with our estimates. Meanwhile, the figure remained 30% below the pre-COVID, 2019 level. We reiterate our view that EU car sales are likely to remain subdued in the near future, amid persistently weak local economic activity (as indicated by the EU PMI remaining <50), which is likely to 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
🚘EU + UK passenger car registrations dropped 17% YoY in August, after being flat YoY in July. The dynamics were broadly in-line with our estimates. Meanwhile, the figure remained 30% below the pre-COVID, 2019 level. We reiterate our view that EU car sales are likely to remain subdued in the near future, amid persistently weak local economic activity (as indicated by the EU PMI remaining <50), which is likely to 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
🏭Global primary aluminium output growth slowed to 1.2% YoY in August, decelerating from the revised +2.1% YoY in July, according to data from the International Aluminium Institute. China’s production (60% of global Al output in August) also rose only 1.2% YoY. We maintain our view that Al continues to trade below its fundamentally reasonable level for 2025 (~USD 2,700/t)
Overall, the strong consumption dynamics in China (incl. solid demand from the local new energy sector and grid), as well as further US Fed Funds rate cuts, could add material support to Al prices, we believe
#aluminium
https://metals-wire.com/sector/Aluminium
🏭Global primary aluminium output growth slowed to 1.2% YoY in August, decelerating from the revised +2.1% YoY in July, according to data from the International Aluminium Institute. China’s production (60% of global Al output in August) also rose only 1.2% YoY. We maintain our view that Al continues to trade below its fundamentally reasonable level for 2025 (~USD 2,700/t)
Overall, the strong consumption dynamics in China (incl. solid demand from the local new energy sector and grid), as well as further US Fed Funds rate cuts, could add material support to Al prices, we believe
#aluminium
https://metals-wire.com/sector/Aluminium
Morning Bites (part 1)
💍China’s jewellery and watch retail sales jumped 18% YoY in August, reversing from the 12% YoY drop in July. However, according to Rapaport, China’s demand for diamond jewellery remains soft, as shoppers switched to buying gold, given the lack of purchasing power amid concerns over local economic growth. At the same time, China’s jewellery sales hit historical highs last month (+6% vs. August 2021), which might be a favourable cross-read for local diamond demand in the long term, were this trend to persist
We reiterate our view that the solid sales recovery in the world's key US downstream market (~53% of global retail gem-set jewellery trade) could accelerate the ongoing destocking in 2H24, supporting sentiment in the stressed diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
💍China’s jewellery and watch retail sales jumped 18% YoY in August, reversing from the 12% YoY drop in July. However, according to Rapaport, China’s demand for diamond jewellery remains soft, as shoppers switched to buying gold, given the lack of purchasing power amid concerns over local economic growth. At the same time, China’s jewellery sales hit historical highs last month (+6% vs. August 2021), which might be a favourable cross-read for local diamond demand in the long term, were this trend to persist
We reiterate our view that the solid sales recovery in the world's key US downstream market (~53% of global retail gem-set jewellery trade) could accelerate the ongoing destocking in 2H24, supporting sentiment in the stressed diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🏗 China has unveiled new economic stimulus to help hit the 5% GDP growth target in 2024, Bloomberg reports, citing PBoC Governor Pan Gongsheng. Specifically, China is to cut its reserve requirement ratio (RRR) 0.50% to 9.50%, in addition to a potential 0.20-0.25pp decrease in loan prime rate (LPR, which currently stands at 3.35%)
Furthermore, Beijing has announced a support package for the depressed local property sector, including lowering borrowing costs on as much as USD5.3tn of mortgages and easing rules for second-home purchases
Although the new Chinese stimulus is still a long way removed from previous "bazooka" measures, it is likely to add positive impetus to the stressed steel market in 4Q24. We believe, however, that more actions would be required for a full-scale recovery in construction activity
#steel
https://metals-wire.com/sector/Steel
🏗 China has unveiled new economic stimulus to help hit the 5% GDP growth target in 2024, Bloomberg reports, citing PBoC Governor Pan Gongsheng. Specifically, China is to cut its reserve requirement ratio (RRR) 0.50% to 9.50%, in addition to a potential 0.20-0.25pp decrease in loan prime rate (LPR, which currently stands at 3.35%)
Furthermore, Beijing has announced a support package for the depressed local property sector, including lowering borrowing costs on as much as USD5.3tn of mortgages and easing rules for second-home purchases
Although the new Chinese stimulus is still a long way removed from previous "bazooka" measures, it is likely to add positive impetus to the stressed steel market in 4Q24. We believe, however, that more actions would be required for a full-scale recovery in construction activity
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 1)
🔗Global crude steel output declined 6% YoY to 145mnt in August, accelerating from the -5% YoY seen in July, according to the World Steel Association data. China’s production (54% of global crude steel supply in August) was down 10% YoY, after the -9% YoY in July. Ex-China steel output was also down, slipping 2% YoY. According to the WSA numbers, last month, Russia’s production dropped 12% YoY, while US and EU output inched up 1% YoY and 2% YoY, respectively. Indian output (~8% of global steel supply) rose 3% YoY (vs. +7% YoY in July)
Although global steel market sentiment has been depressed in recent months, the new support package for China’s property sector might add some support to local construction activity in 4Q24-2025, we believe
#steel
https://metals-wire.com/sector/Steel
🔗Global crude steel output declined 6% YoY to 145mnt in August, accelerating from the -5% YoY seen in July, according to the World Steel Association data. China’s production (54% of global crude steel supply in August) was down 10% YoY, after the -9% YoY in July. Ex-China steel output was also down, slipping 2% YoY. According to the WSA numbers, last month, Russia’s production dropped 12% YoY, while US and EU output inched up 1% YoY and 2% YoY, respectively. Indian output (~8% of global steel supply) rose 3% YoY (vs. +7% YoY in July)
Although global steel market sentiment has been depressed in recent months, the new support package for China’s property sector might add some support to local construction activity in 4Q24-2025, we believe
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🔗CISA mills' daily crude steel production in early-September was reported at 1.94mnt, up 2.7% from the previous ten days, but 10.3% lower YoY. The YTD output (up to 10 September) was down 3.1% YoY. At the same time, local steel inventories rose 2.9% over the period (also being down 5.3% YoY)
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in early-September was reported at 1.94mnt, up 2.7% from the previous ten days, but 10.3% lower YoY. The YTD output (up to 10 September) was down 3.1% YoY. At the same time, local steel inventories rose 2.9% over the period (also being down 5.3% YoY)
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites
🏗China’s preliminary excavator sales grew 12% YoY in September (domestic + export), in line with the August dynamics, according to the CME estimates. The final figure, however, is likely to remain 20% below the 2021 level. Specifically, domestic excavator sales are set to grow 17% YoY this month (but still be -48% vs. September 2021), which might indicate that local construction activity is gradually bottoming out. Meanwhile, the recently announced support package for China’s property sector could add some support to this recovery, we believe
China accounts for 52% of global steel consumption, and for 55% and 58% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
🏗China’s preliminary excavator sales grew 12% YoY in September (domestic + export), in line with the August dynamics, according to the CME estimates. The final figure, however, is likely to remain 20% below the 2021 level. Specifically, domestic excavator sales are set to grow 17% YoY this month (but still be -48% vs. September 2021), which might indicate that local construction activity is gradually bottoming out. Meanwhile, the recently announced support package for China’s property sector could add some support to this recovery, we believe
China accounts for 52% of global steel consumption, and for 55% and 58% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 1)
🔗CISA mills' daily crude steel production in mid-September was reported at 1.99mnt, +2.7% vs. the previous ten days, but -6.8% YoY. YTD output (through 20 September) was down 3.2% YoY. At the same time, local steel inventories rose 4.5% over the period (but inched down 0.7% YoY)
Although global steel market sentiment has been depressed in recent months, the new support package for China’s property sector might help bolster local construction activity in 4Q24-2025, we believe
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in mid-September was reported at 1.99mnt, +2.7% vs. the previous ten days, but -6.8% YoY. YTD output (through 20 September) was down 3.2% YoY. At the same time, local steel inventories rose 4.5% over the period (but inched down 0.7% YoY)
Although global steel market sentiment has been depressed in recent months, the new support package for China’s property sector might help bolster local construction activity in 4Q24-2025, we believe
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🇮🇳 India’s gold imports surged ~60% YoY to 140 tons in August, following a reduction in the local customs levy to 6% from 15%, Bloomberg reports, citing WGC data. This volume in annualised terms accounts for an impressive ~34% of global demand, though this seems to us likely to be a one-off. Overall, the tax decrease, along with seasonally higher demand for gold during the Indian 4Q24 festival and wedding seasons might add support to local gold imports in the upcoming months, we believe
Historically, India is one of the world’s largest gold buying countries (~23% of global consumer gold demand in 2023)
Although at spot gold is trading above its fundamentally reasonable level for 2H24 (~$2,400/oz) we expect additional upside in the precious metal’s price, amid strong demand from global central banks, the return of ETFs to gold purchasing and monetary policy easing in US and EU
#gold
https://metals-wire.com/news-reports
🇮🇳 India’s gold imports surged ~60% YoY to 140 tons in August, following a reduction in the local customs levy to 6% from 15%, Bloomberg reports, citing WGC data. This volume in annualised terms accounts for an impressive ~34% of global demand, though this seems to us likely to be a one-off. Overall, the tax decrease, along with seasonally higher demand for gold during the Indian 4Q24 festival and wedding seasons might add support to local gold imports in the upcoming months, we believe
Historically, India is one of the world’s largest gold buying countries (~23% of global consumer gold demand in 2023)
Although at spot gold is trading above its fundamentally reasonable level for 2H24 (~$2,400/oz) we expect additional upside in the precious metal’s price, amid strong demand from global central banks, the return of ETFs to gold purchasing and monetary policy easing in US and EU
#gold
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