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
Morning Bites
🏗China’s excavator sales increased 11% YoY in September (domestic + export), in line with the 12% YoY gain in August, according to the CCMA data. The domestic sales were above CME estimates, being 22% higher YoY (albeit still 45% lower than the August 2021 level). According to China’s Housing Minister Ni Hong, the local property sector is gradually bottoming out, a statement underpinned by positive excavator sales dynamics.
Overall, the new economic support stimulus (which are not fully disclosed yet) announced by Beijing, as well as plans to double credit quotas for “white-list” unfinished property projects to CNY 4tn (USD 562bn) will likely add support local construction activity in 2025, we believe
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
🏗China’s excavator sales increased 11% YoY in September (domestic + export), in line with the 12% YoY gain in August, according to the CCMA data. The domestic sales were above CME estimates, being 22% higher YoY (albeit still 45% lower than the August 2021 level). According to China’s Housing Minister Ni Hong, the local property sector is gradually bottoming out, a statement underpinned by positive excavator sales dynamics.
Overall, the new economic support stimulus (which are not fully disclosed yet) announced by Beijing, as well as plans to double credit quotas for “white-list” unfinished property projects to CNY 4tn (USD 562bn) will likely add support local construction activity in 2025, we believe
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
🗞Today, China has published its industrial production data 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 crude steel output fell 6% YoY in September (-10% YoY in August). On the 9mo24 basis, output was 4% lower YoY (per National Bureau of Statistics data), affected by slow domestic demand and subdued steel margins. Meanwhile, in late-September Beijing announced new economic support measures (which have not been fully disclosed yet), which might bolster local construction activity in 2025, although they are still not enough for the sector to recover fully
🏢China's property sales decreased 11% YoY in September (-13% YoY in August), and were 40% below the 2021 level. Floor space starts declined 20% YoY in September, being -62% vs. 2021. Personal mortgage loans were 26% lower YoY, while property completions fell 31% YoY (vs. -37% YoY the previous month). According to Chinese officials, the local property sector is gradually bottoming out, bolstered by the economic stimulus and support measures for unfinished real estate projects
#steel #property
https://metals-wire.com/sector/Steel
🔗China’s crude steel output fell 6% YoY in September (-10% YoY in August). On the 9mo24 basis, output was 4% lower YoY (per National Bureau of Statistics data), affected by slow domestic demand and subdued steel margins. Meanwhile, in late-September Beijing announced new economic support measures (which have not been fully disclosed yet), which might bolster local construction activity in 2025, although they are still not enough for the sector to recover fully
🏢China's property sales decreased 11% YoY in September (-13% YoY in August), and were 40% below the 2021 level. Floor space starts declined 20% YoY in September, being -62% vs. 2021. Personal mortgage loans were 26% lower YoY, while property completions fell 31% YoY (vs. -37% YoY the previous month). According to Chinese officials, the local property sector is gradually bottoming out, bolstered by the economic stimulus and support measures for unfinished real estate projects
#steel #property
https://metals-wire.com/sector/Steel
Alcoa 3Q24 results - aluminium recovery drives EBITDA growth
✏️Alcoa's 3Q24 revenues came in moderately below the consensus and our estimates, amid lower Al shipments than we had anticipated. However, EBITDA exceeded the market estimates, and was broadly in line with us
⛏Alcoa‘s outlook for its 2024 aluminium segment production and shipments remains unchanged from the previous projection: 2.2-2.3mnt and 2.5-2.6mnt, respectively
📈According to company CEO William Oplinger, global aluminum demand is currently at record levels, while long-term supply will be limited, as China is approaching its 45mnt production cap
❗️At spot, we expect Alcoa’s 4Q24F EBITDA to be materially stronger QoQ, as the spot Al price is ~6% above the 3Q24 avg.
#AA #Aluminium
https://metals-wire.com/company/AA_US
✏️Alcoa's 3Q24 revenues came in moderately below the consensus and our estimates, amid lower Al shipments than we had anticipated. However, EBITDA exceeded the market estimates, and was broadly in line with us
⛏Alcoa‘s outlook for its 2024 aluminium segment production and shipments remains unchanged from the previous projection: 2.2-2.3mnt and 2.5-2.6mnt, respectively
📈According to company CEO William Oplinger, global aluminum demand is currently at record levels, while long-term supply will be limited, as China is approaching its 45mnt production cap
❗️At spot, we expect Alcoa’s 4Q24F EBITDA to be materially stronger QoQ, as the spot Al price is ~6% above the 3Q24 avg.
#AA #Aluminium
https://metals-wire.com/company/AA_US
Week ahead data releases in M&M
This week, many global M&M names are scheduled to report their 3Q24 financials. We believe that the consensus is overly bullish in its EBITDA forecasts for large copper miners, such as SCCO and First Quantum, but underestimates Newmont performance
We also expect to see global monthly steel production data and EU car sales statistics for September on Tuesday
#reporting_season
https://metals-wire.com/events
This week, many global M&M names are scheduled to report their 3Q24 financials. We believe that the consensus is overly bullish in its EBITDA forecasts for large copper miners, such as SCCO and First Quantum, but underestimates Newmont performance
We also expect to see global monthly steel production data and EU car sales statistics for September on Tuesday
#reporting_season
https://metals-wire.com/events
Morning Bites
🔗CISA mills' daily crude steel production in early October was reported at 2.05mnt, up 1.7% vs. the previous ten days, but still -1.6% YoY. On a YTD basis (until 10 October), output shrank 3.1% YoY, according to the CISA data. Meanwhile, local steel inventories rose 3.2% in early October (but were down 10.0% 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, which has already started to bottom out gradually, per Chinese officials
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in early October was reported at 2.05mnt, up 1.7% vs. the previous ten days, but still -1.6% YoY. On a YTD basis (until 10 October), output shrank 3.1% YoY, according to the CISA data. Meanwhile, local steel inventories rose 3.2% in early October (but were down 10.0% 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, which has already started to bottom out gradually, per Chinese officials
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 1)
💎 India’s rough diamond net imports fell 20% YoY in September, decelerating from the 47% YoY drop in August. Meanwhile, polished diamond net exports declined 23% YoY (vs. -22% YoY in August). Synthetic rough diamond net imports fell 27% YoY, after the 8% YoY drop seen in August. The share of lab-grown net rough imports in total trading stood at 8%
To recap, last month GJEPC underpinned the looming recovery in the diamond industry, as indicated by significant reductions in polished inventories across markets and price increases 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 the world's polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India’s rough diamond net imports fell 20% YoY in September, decelerating from the 47% YoY drop in August. Meanwhile, polished diamond net exports declined 23% YoY (vs. -22% YoY in August). Synthetic rough diamond net imports fell 27% YoY, after the 8% YoY drop seen in August. The share of lab-grown net rough imports in total trading stood at 8%
To recap, last month GJEPC underpinned the looming recovery in the diamond industry, as indicated by significant reductions in polished inventories across markets and price increases 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 the world's polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds