Morning Bites

💎India’s rough diamond net imports were down 49% YoY in February, vs. the -37% YoY the January. Meanwhile, polished diamond net exports slid 21% YoY. Synthetic rough diamond net imports also decreased 59% YoY. The share of lab-grown net rough imports in total trading stood at 7%

Although GJEPC has recently noted the looming recovery in the diamond industry, market participants confirm still high midstream inventories in early-2025. Hence, the potential diamond market recovery might take longer than we had initially anticipated

India accounts for ~95% of the world's polished stone supply

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

🗞Today, China has published its industrial production data for January-February (see table above)

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

Morning Bites (part 2)

🚘US light vehicle sales were up 2% YoY in February, vs. the 4% YoY gain in January. Meanwhile, the figure has almost reached the pre-Covid 2019 level (-1% vs. February 2019). According to Reuters, the new US administration is planning to cancel the USD 7,500 tax credit for EV purchases as part of tax reform legislation (which could even be replaced with USD 1,000 new EV purchase tax). This move, if it materialised, would negatively affect local BEV sales (similar to Germany's case), which is a favourable factor for PGM market fundamentals, we believe

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

🇿🇦South Africa’s PGM mining output slid 4% YoY in January, vs. the -7% YoY in December, according to official data. Meanwhile, local gold production inched up 1% YoY, after the decline of 8% YoY in December. In our view, the ongoing monetary easing cycle in the EU/US and China, the increase in EU import duties (from 10% up to 45%) on Chinese BEVs (encouraging the production of catalyst-containing cars), as well as the expected cancellation of EV-support programmes in the US (which might be even replaced with USD 1,000 new EV purchase tax) could bolster the PGM prices recovery in 2025

SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of world gold production

#PGMs #gold        
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Morning Bites

💍China’s jewellery and watch retail sales rose 5% YoY in January-February, reversing from the -9% YoY seen in December, per NBS data. According to Rapaport, the engagement market provided some support to Chinese diamond demand in early-2025, but overall sales remained soft with little desire for new inventory from retailers

Overall, we keep our cautiously upbeat view on the global diamond market, but it might take longer than we had initially anticipated to recover, given the still high midstream inventories and the slowdown in the US downstream market in early-2025 (~53% of the world gem-set jewellery trade)

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

Morning Bites (part 1)

🇨🇱Chile’s copper output slid 2% YoY in January, hitting the lowest monthly point in the last 9 years, after the 14% YoY gain in December, per INE data. We maintain our positive view on copper amid Chile’s long-term supply issues (beyond 2027), growing demand for renewables globally, and surging investments in China’s grid infrastructure (which represents ~8% of global Cu demand, on our numbers)

Chile accounts for ~24% of global Cu supply

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

Morning Bites (part 2)

💍Signet has reported a 1.1% YoY drop in same-store sales for 4Q24 (November-January), vs. the 0.7% YoY decrease in 3Q24. However, Signet CEO J.K. Symancyk noted the positive demand trends in January across all categories, including bridal. According to the management estimates, if the trend persists, 1Q25 same-store sales might recover, gaining 2.0% YoY

Overall, we keep our cautiously upbeat view on the global diamond market, but it might take longer than we had initially anticipated to recover, given the still high midstream inventories and the slowdown in the US downstream market in early-2025 (~53% of the world gem-set jewellery trade)

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

Morning Bites

🏭Global primary aluminium output slid 0.7% YoY in February, vs. the +2.6% YoY seen in January, and marked the first negative YoY reading since February 2022, per International Aluminium Institute (IAI) data. Chinese production (60% of global Al output) was flat YoY last month, while ex. China output declined 1.6% YoY. Overall, strong consumption dynamics in Asia (incl. grid) and the ongoing monetary easing cycle in key economies (EU/US and China) are likely to add further support to Al, which continues to trade below what we see as its fundamentally reasonable level (USD 2,900-3,000/t for 2025F, 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 (China produced 43.4mnt in 2024, as well as 42.5mnt in 2mo25 in annualised terms, per IAI data)

#aluminium
https://metals-wire.com/sector/Aluminium

Morning Bites (part 2)

🇨🇳China plans to expand its industrial metals reserves in 2025, seeking to ensure resilient supply amid surging energy-transition demand and geopolitical tensions, Bloomberg reports. Cobalt, copper, nickel and lithium are among the metals Beijing plans to purchase

Although the targeted volumes were not disclosed, China, on our numbers, accumulated net 200-400ktpa (1-2% of global demand) of copper to its strategic reserve in 2013-16, and 600kt in 2020. Even excluding this factor, we see a global Cu market deficit of ~2% in 2025 amid strong renewable energy demand and growing investments in China's grid, all of which which underpins our positive view on the red metal

As for nickel, we do not expect a notable effect on sentiment, as the Ni market has remained in a stable surplus since 2022, while China is unlikely to have issues with access to Indonesian metal (~55% of global Ni supply)

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

Morning Bites

🥉Global mined copper production gained 2.1% YoY in January, vs. the revised +4.5% YoY in December, the International Copper Study Group (ICSG) reports. Per the ICSG, the growth was mainly driven by Peru (+7% YoY, primarily due to the ramp-up of the Quellaveco mine) and DRC (+6% YoY, mostly as a consequence of the expansion of the Kamoa mine). The ICSG also reports global refined Cu consumption growth of 1.0% YoY in January

We maintain our positive view on copper, amid long-term supply issues, 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 (part 1)

🚘EU + UK passenger car registrations declined 3% YoY in February, in line with January. The figure matched our estimates, remaining 16% below the pre-COVID 2019 level

We maintain our view that the ongoing monetary easing cycle in the EU/US and China, the increase in EU import duties (from 10% up to 45%) on Chinese BEVs (encouraging the production of catalyst-containing cars), and the expected cancellation of EV-support programmes in the US (which could even be replaced with USD 1,000 new EV purchase tax), might bolster the PGM market fundamentals

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 (part 2)

🔗Global crude steel output declined 3% YoY to 145mnt in February, broadly in line with January, according to World Steel Association (WSA) data. China’s production (55% of global crude steel supply) fell 3% YoY (-6% YoY in January), while ex-China steel output also slipped 4% YoY. The WSA numbers show that Russian output dropped 3% YoY, while both US and EU production lost 7% YoY last month. Indian output (~9% of global steel supply) continued its growth, adding 6% YoY in February

In our view, China’s fiscal stimulus for 2025, (incl. 5% GDP growth target, and an increase in the official budget deficit from 3% to 4%, etc), could spur recovery in the Chinese real estate sector, which started to gradually bottom out in 2H24. Furthermore, Beijing plans to cut 'excessive' steel output in 2025 (2-5% YoY, per market estimates). These measures might cool surging Chinese steel exports, and support global prices in 2025, we believe

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

Morning Bites

🔗CISA mills' daily crude steel production in mid-March was reported at 2.17mnt, up 1.6% vs. the previous ten days, and +5.8% YoY. Meanwhile, on a YTD basis (through 20 March), the output rose 1.9% YoY, per CISA data. Local steel inventories also increased 4.1% over the period (but were -13.4% YoY)

CISA has recently suggested halting new capacity additions in China, due to the oversupplied market, while Beijing plans to cut excessive output in 2025 (by 2-5% YoY, per market estimates). In our view, future supply cuts might cool surging Chinese exports, partially unwinding pressure on global steel prices

China accounts for ~57% of global steel supply

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

Morning Bites

📈Russia’s gold output rose 9.1% YoY in February, after the -2.5% YoY in January, per Rosstat data. The country’s output in 2mo25 was also up 4.5% YoY. Russia accounted for ~9% of the world's mined gold supply in 2023

We keep our view that gold continues to trade above what we see as its fundamentally reasonable level for 1H25 (~USD 2,500/oz), but we expect the precious metal’s price will remain elevated in 2025, given continuing inflows into global ETFs and central banks

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