Morning Bites (part 1)
📈China’s output of aluminium products grew 6% YoY to 5.8mnt in August, roughly in-line with the 5% YoY gain in July. Given the persistently strong demand for Al in China (~60% of its global consumption), bolstered by the rapid expansion of the local new energy sector, we maintain our positive view on the metal. We are the fundamentally reasonable price level for Al in 4Q24-2025 at USD >2,700/t
🥉Chinese output of copper products rose 3% YoY in August to 1.9mnt, after the 1% YoY rise in July. We reiterate our view that bullish grid investment plans in China, strong demand trends globally and monetary easing measures in key economies (the US, EU and China) are likely to add further support to the red metal's price. On our numbers, China represents ~55% of global Cu and demand
#aluminium #copper
https://metals-wire.com/news-reports
📈China’s output of aluminium products grew 6% YoY to 5.8mnt in August, roughly in-line with the 5% YoY gain in July. Given the persistently strong demand for Al in China (~60% of its global consumption), bolstered by the rapid expansion of the local new energy sector, we maintain our positive view on the metal. We are the fundamentally reasonable price level for Al in 4Q24-2025 at USD >2,700/t
🥉Chinese output of copper products rose 3% YoY in August to 1.9mnt, after the 1% YoY rise in July. We reiterate our view that bullish grid investment plans in China, strong demand trends globally and monetary easing measures in key economies (the US, EU and China) are likely to add further support to the red metal's price. On our numbers, China represents ~55% of global Cu and demand
#aluminium #copper
https://metals-wire.com/news-reports
Morning Bites (part 2)
🥉Global mined copper production rose 2.6% YoY in July, reversing from the -2.7% YoY in June, the International Copper Study Group (ICSG) reports. Meanwhile, on the 7mo24 basis, output was up 3.0% YoY, as production recovered at existing assets (e.g. in Chile, Indonesia and the US), and new mining projects ramped up (especially in the DR Congo). The ICSG also notes solid global refined Cu consumption (+2.9% YoY in 7mo24), mainly driven by China (+3.5% YoY)
We maintain our positive view on copper, amid growing demand for renewables globally and surging investments in China’s grid infrastructure (which represents ~8% of global Cu demand, on our numbers)
#copper
https://metals-wire.com/sector/Copper
🥉Global mined copper production rose 2.6% YoY in July, reversing from the -2.7% YoY in June, the International Copper Study Group (ICSG) reports. Meanwhile, on the 7mo24 basis, output was up 3.0% YoY, as production recovered at existing assets (e.g. in Chile, Indonesia and the US), and new mining projects ramped up (especially in the DR Congo). The ICSG also notes solid global refined Cu consumption (+2.9% YoY in 7mo24), mainly driven by China (+3.5% YoY)
We maintain our positive view on copper, amid growing demand for renewables globally and surging investments in China’s grid infrastructure (which represents ~8% of global Cu demand, on our numbers)
#copper
https://metals-wire.com/sector/Copper
Morning Bites
🌏Global manufacturing PMIs remained soft in September. The Eurozone Markit Manufacturing PMI stood at 45.0 (vs. the 45.8 seen in August). The US ISM manufacturing PMI was at 47.2 (slightly below market expectations of 47.5) and flat MoM
🇨🇳The official NBS Manufacturing PMI in China was at 49.8 in September (vs. 49.1 a month ago). Meanwhile, the Caixin China Manufacturing PMI slid to 49.3, missing the forecasts of 50.5
🇮🇳 Although India’s manufacturing PMI declined to 56.5 (also slightly below the consensus of 56.7), its indicator remains one of the strongest among the world's key economies
❗️In September, most global PMIs remained below 50.0, indicating an ongoing slowdown in regional (especially EU and US) manufacturing activity. However, India’s strong PMI data 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
🌏Global manufacturing PMIs remained soft in September. The Eurozone Markit Manufacturing PMI stood at 45.0 (vs. the 45.8 seen in August). The US ISM manufacturing PMI was at 47.2 (slightly below market expectations of 47.5) and flat MoM
🇨🇳The official NBS Manufacturing PMI in China was at 49.8 in September (vs. 49.1 a month ago). Meanwhile, the Caixin China Manufacturing PMI slid to 49.3, missing the forecasts of 50.5
🇮🇳 Although India’s manufacturing PMI declined to 56.5 (also slightly below the consensus of 56.7), its indicator remains one of the strongest among the world's key economies
❗️In September, most global PMIs remained below 50.0, indicating an ongoing slowdown in regional (especially EU and US) manufacturing activity. However, India’s strong PMI data 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
📈Russia’s gold output inched down 0.9% YoY in August, after the 10.1% YoY growth seen in July, according to the Rosstat data. It was also 4.7% YoY higher on the 8mo24 basis. Russia’s gold output accounted for ~9% of the world's mined supply in 2023
Although, at spot, gold is trading above its fundamentally reasonable level for 2H24 (~USD 2,400/oz), we expect additional upside in the precious metal’s price, due to strong demand from global central banks and the return of ETFs to gold purchasing, amid monetary policy easing in the US and the EU
#gold
https://metals-wire.com/sector/Gold
📈Russia’s gold output inched down 0.9% YoY in August, after the 10.1% YoY growth seen in July, according to the Rosstat data. It was also 4.7% YoY higher on the 8mo24 basis. Russia’s gold output accounted for ~9% of the world's mined supply in 2023
Although, at spot, gold is trading above its fundamentally reasonable level for 2H24 (~USD 2,400/oz), we expect additional upside in the precious metal’s price, due to strong demand from global central banks and the return of ETFs to gold purchasing, amid monetary policy easing in the US and the EU
#gold
https://metals-wire.com/sector/Gold
Morning Bites
💍Hong Kong jewellery and watch sales shrank 24% YoY in August, remaining broadly in-line with the 25% YoY decline in July, per government data. According to Rapaport, local demand for diamond jewellery remained soft in August, as shoppers had switched to buying gold
Despite slack demand in HK, sentiment remains strong in the key US market (~53% of the world's gem-set jewellery trade), while Chinese data (~12% of the global market) has been upbeat in recent months, which might support the depressed diamond sector, if this trend were to persist
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales shrank 24% YoY in August, remaining broadly in-line with the 25% YoY decline in July, per government data. According to Rapaport, local demand for diamond jewellery remained soft in August, as shoppers had switched to buying gold
Despite slack demand in HK, sentiment remains strong in the key US market (~53% of the world's gem-set jewellery trade), while Chinese data (~12% of the global market) has been upbeat in recent months, which might support the depressed diamond sector, if this trend were to persist
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🚘US light vehicle sales dropped 12% YoY in September, after the 6% YoY gain in August. The figure remained 9% below the pre-Covid 2019 level. Seasonally-adjusted sales volumes, however, stood roughly unchanged YoY last month (but were 8% below the 2019 level).
In our view, the recent US Fed funds rate cut might bolster local car sales in the coming months. However, the medium-/long-term automotive demand for PGMs is likely to remain subdued, amid the growing appetite for EVs globally
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
🚘US light vehicle sales dropped 12% YoY in September, after the 6% YoY gain in August. The figure remained 9% below the pre-Covid 2019 level. Seasonally-adjusted sales volumes, however, stood roughly unchanged YoY last month (but were 8% below the 2019 level).
In our view, the recent US Fed funds rate cut might bolster local car sales in the coming months. However, the medium-/long-term automotive demand for PGMs is likely to remain subdued, amid the growing appetite for EVs globally
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
🚘New car registrations in France, the UK, Spain, Italy and Germany slid another 5% YoY in September, after the 20% YoY decline in August, remaining well below their pre-COVID level (-17% vs. September 2019). In particular, in France and the UK, car sales were both 20% below 2019 levels, while registrations in Germany and Italy were 15% lower, respectively. In Spain, local sales were 11% below September 2019
Given these five countries represented >70% of new vehicle registrations in Europe in 2023, the region’s car sales have likely shown a moderate decline, remaining firmly below their pre-pandemic levels
#cars
https://metals-wire.com/sector/PGM
🚘New car registrations in France, the UK, Spain, Italy and Germany slid another 5% YoY in September, after the 20% YoY decline in August, remaining well below their pre-COVID level (-17% vs. September 2019). In particular, in France and the UK, car sales were both 20% below 2019 levels, while registrations in Germany and Italy were 15% lower, respectively. In Spain, local sales were 11% below September 2019
Given these five countries represented >70% of new vehicle registrations in Europe in 2023, the region’s car sales have likely shown a moderate decline, remaining firmly below their pre-pandemic levels
#cars
https://metals-wire.com/sector/PGM
Morning Bites (part 1)
🏦Global central banks accumulated net 6t of gold in August, a slowdown from the +37t seen in July, the World Gold Council reports. Overall trading was rather slow: the only country to purchase significant volumes was Poland (+6t), while Kazakhstan was a seller, with a net outflow of 5t
Although, at spot, gold continues to trade above its fundamentally reasonable level for 2H24 (~USD 2,400/oz), we expect additional upside in the precious metal’s price, following ETFs’ return to gold purchasing and monetary policy easing in the US/EU, as well as given the persistent geopolitical tensions globally
#gold
https://metals-wire.com/sector/Gold
🏦Global central banks accumulated net 6t of gold in August, a slowdown from the +37t seen in July, the World Gold Council reports. Overall trading was rather slow: the only country to purchase significant volumes was Poland (+6t), while Kazakhstan was a seller, with a net outflow of 5t
Although, at spot, gold continues to trade above its fundamentally reasonable level for 2H24 (~USD 2,400/oz), we expect additional upside in the precious metal’s price, following ETFs’ return to gold purchasing and monetary policy easing in the US/EU, as well as given the persistent geopolitical tensions globally
#gold
https://metals-wire.com/sector/Gold
❤1
Morning Bites (part 2)
📈Gold-backed ETFs purchased net 18t in September, following the +29t in August. According to the World Gold Council (WGC), inflows were recorded in North American and Asian funds, which raised 16t and 2t, respectively, while European funds sold some 2t of gold
As we have noted previously, the return of ETFs to gold buying since May, after 11 months of net selling, creates additional positive momentum for the precious metal’s price
#ETF #gold
https://metals-wire.com/news-reports
📈Gold-backed ETFs purchased net 18t in September, following the +29t in August. According to the World Gold Council (WGC), inflows were recorded in North American and Asian funds, which raised 16t and 2t, respectively, while European funds sold some 2t of gold
As we have noted previously, the return of ETFs to gold buying since May, after 11 months of net selling, creates additional positive momentum for the precious metal’s price
#ETF #gold
https://metals-wire.com/news-reports
Morning Bites (part 1)
🇨🇱Chile’s copper output rose 7% YoY in August, accelerating from 2% YoY gain in July, according to the INE data. On a 8mo24 basis, the country’s Cu output was up ~3% YoY. To recap, Chile's largest miner, Codelco (~7% of global Cu supply), plans to raise 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 7% YoY in August, accelerating from 2% YoY gain in July, according to the INE data. On a 8mo24 basis, the country’s Cu output was up ~3% YoY. To recap, Chile's largest miner, Codelco (~7% of global Cu supply), plans to raise 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)
💎US jewellery sales rose 5% YoY in August, in line with the revised dynamics in July, IDEX reports. According to Rapaport, local retailers are optimistic about the upcoming 2024 winter holidays season, with some jewellers seen moving back from synthetic to natural diamonds
We reiterate our view that solid demand in the world's key US downstream market (~53% of the global retail gem-set jewellery trade) could accelerate the release of industry inventories, resulting in structural market improvements in the seasonally strong 4Q24-1Q25
#diamonds
https://metals-wire.com/sector/Diamonds
💎US jewellery sales rose 5% YoY in August, in line with the revised dynamics in July, IDEX reports. According to Rapaport, local retailers are optimistic about the upcoming 2024 winter holidays season, with some jewellers seen moving back from synthetic to natural diamonds
We reiterate our view that solid demand in the world's key US downstream market (~53% of the global retail gem-set jewellery trade) could accelerate the release of industry inventories, resulting in structural market improvements in the seasonally strong 4Q24-1Q25
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🇿🇦South Africa’s PGM mining output rose 5% YoY in August, after the 1% YoY drop in July, according to official statistics. The country’s gold production shrank 5% YoY -- roughly in-line with the 4% YoY decline in July. In our view, the recently started monetary easing cycle in the EU/US and China, upcoming increase in European import duties (from 10% up to 35%) on Chinese EVs, as well as continuous global Pd/Pt market deficit, might trigger a recovery in PGM prices in 2025
SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of world gold production
#PGMs #gold
https://metals-wire.com/news-reports
🇿🇦South Africa’s PGM mining output rose 5% YoY in August, after the 1% YoY drop in July, according to official statistics. The country’s gold production shrank 5% YoY -- roughly in-line with the 4% YoY decline in July. In our view, the recently started monetary easing cycle in the EU/US and China, upcoming increase in European import duties (from 10% up to 35%) on Chinese EVs, as well as continuous global Pd/Pt market deficit, might trigger a recovery in PGM prices in 2025
SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of world gold production
#PGMs #gold
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 set to release its 3Q24 earnings. On EBITDA, we are more bullish than consensus
This week, we also expect to see Chinese customs data, as well as industrial production statistics
#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 set to release its 3Q24 earnings. On EBITDA, we are more bullish than consensus
This week, we also expect to see Chinese customs data, as well as industrial production statistics
#reporting_season
https://metals-wire.com/events
Morning Bites
📌China’s new internal combustion engine car sales dropped 22% YoY in September, in line with August's dynamics. The figures remain materially below their pre-Covid level (31% lower than September 2019), amid the strong appetite for EVs, affecting PGM consumption (the share of local ICE car sales declined further to 54% last month -- another historical low). We note that the Chinese automotive sector accounts for 20% and 17% of global Pd and Pt demand, respectively
📌New EV sales in China surged 42% YoY in September, following the 30% YoY gain in August. Specifically, PHEV and BEV sales grew 84% and 24% YoY, respectively. In our view, continuously strong local EV demand, along with new monetary easing measures in China, 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 22% YoY in September, in line with August's dynamics. The figures remain materially below their pre-Covid level (31% lower than September 2019), amid the strong appetite for EVs, affecting PGM consumption (the share of local ICE car sales declined further to 54% last month -- another historical low). We note that the Chinese automotive sector accounts for 20% and 17% of global Pd and Pt demand, respectively
📌New EV sales in China surged 42% YoY in September, following the 30% YoY gain in August. Specifically, PHEV and BEV sales grew 84% and 24% YoY, respectively. In our view, continuously strong local EV demand, along with new monetary easing measures in China, 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
🗞Yesterday, China published its preliminary import/export statistics for September (see table above)
#statistics #China
https://metals-wire.com/news-reports
#statistics #China
https://metals-wire.com/news-reports
Morning Bites
🔗China’s finished steel net exports surged 29% YoY in September, after the +18% YoY in August. According to Bloomberg, soft domestic demand (amid the property crisis) has spurred Chinese traders to send steel overseas, leading to elevated net exports in 9mo24 (+22% YoY). Meanwhile, the new monetary support measures announced by Beijing (as well as the additional fiscal stimulus expected in 4Q24) might bolster local construction activity in 2025, we believe
🪨China’s coal imports grew 13% YoY in September, accelerating from the +3% YoY in August. On the 9mo24 basis, the figure was up 12% YoY. According to Reuters, China's thermal power generation returned to YoY growth in August (last seen in April 2024) as heatwaves drove up local power demand, while hydropower output moderated. However, according to the IEA estimates, Chinese coal power generation might start to decline YoY in 2025, amid the country’s rapid shift to renewable energy
#coal #steel
https://metals-wire.com/news-reports
🔗China’s finished steel net exports surged 29% YoY in September, after the +18% YoY in August. According to Bloomberg, soft domestic demand (amid the property crisis) has spurred Chinese traders to send steel overseas, leading to elevated net exports in 9mo24 (+22% YoY). Meanwhile, the new monetary support measures announced by Beijing (as well as the additional fiscal stimulus expected in 4Q24) might bolster local construction activity in 2025, we believe
🪨China’s coal imports grew 13% YoY in September, accelerating from the +3% YoY in August. On the 9mo24 basis, the figure was up 12% YoY. According to Reuters, China's thermal power generation returned to YoY growth in August (last seen in April 2024) as heatwaves drove up local power demand, while hydropower output moderated. However, according to the IEA estimates, Chinese coal power generation might start to decline YoY in 2025, amid the country’s rapid shift to renewable energy
#coal #steel
https://metals-wire.com/news-reports
Morning Bites (part 1)
🔗CISA mills daily crude steel production in late-September was reported at 2.01mnt, up 1.3% vs. the previous ten days, but still down 2.5% YoY. Meanwhile, on a 9mo24 basis, the surveyed mills’ output shrank 3.2% YoY. Local steel inventories declined 8.8% over late-September (but were up 6.3% YoY). We reiterate our view that the new monetary support measures announced by Beijing (as well as the additional fiscal stimulus expected in 4Q24) might add some support to local construction activity in 2025
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills daily crude steel production in late-September was reported at 2.01mnt, up 1.3% vs. the previous ten days, but still down 2.5% YoY. Meanwhile, on a 9mo24 basis, the surveyed mills’ output shrank 3.2% YoY. Local steel inventories declined 8.8% over late-September (but were up 6.3% YoY). We reiterate our view that the new monetary support measures announced by Beijing (as well as the additional fiscal stimulus expected in 4Q24) might add some support to local construction activity in 2025
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
💍LVMH's organic sales of watches and jewellery declined 4% YoY in 3Q24, staying in line with the 2Q24 dynamics, according to a retailer’s press release. Although LVMH noted again that global geopolitical and economic conditions remained uncertain, the company is still confident of a solid performance in 2024 and continues to enhance the desirability of its brands
In our view, LVMH’s rather stable YoY sales dynamics in 9mo24 might add a slight positive impetus to sentiment on the global diamond sector. Meanwhile, solid demand in the US (53% of the global gem-set jewellery trade), as well as the new economic support measures in China (~12% of demand), could accelerate the release of industry inventories in the seasonally strong 4Q24-1Q25, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💍LVMH's organic sales of watches and jewellery declined 4% YoY in 3Q24, staying in line with the 2Q24 dynamics, according to a retailer’s press release. Although LVMH noted again that global geopolitical and economic conditions remained uncertain, the company is still confident of a solid performance in 2024 and continues to enhance the desirability of its brands
In our view, LVMH’s rather stable YoY sales dynamics in 9mo24 might add a slight positive impetus to sentiment on the global diamond sector. Meanwhile, solid demand in the US (53% of the global gem-set jewellery trade), as well as the new economic support measures in China (~12% of demand), could accelerate the release of industry inventories in the seasonally strong 4Q24-1Q25, we believe
#diamonds
https://metals-wire.com/sector/Diamonds