Morning Bites (part 1)
📌Johnson Matthey expects balanced Pd and deep-deficit Pt markets in 2025
🚗 According to JM, global Pd-Pt demand from the automotive sector is set to decline 5% YoY in 2025, taking into account trade-war concerns and the fact gasoline cars are losing share to BEVs, especially in China. To recap, the Chinese automotive sector accounted for 18% and 17% of global Pt and Pd demand, respectively, last year
📊 In 2025 JM sees a ~10% deficit on the global Pt market, as it less exposed to the downturn in automotive demand due to diversified demand structure; Pd is expected to shift into a balanced state after 5% deficit in 2024 as it more dependent on autocatalyst demand (~85% of Pd consumption)
⛏On the supply side, according to JM, primary Pt and Pd supply are expected to fall 3-4% YoY in 2025, mainly driven by workforce 'rationalisation programmes' in South Africa, as well as planned production cuts in North America, amid continuously weak prices
#PGMs
https://metals-wire.com/sector/PGM
📌Johnson Matthey expects balanced Pd and deep-deficit Pt markets in 2025
🚗 According to JM, global Pd-Pt demand from the automotive sector is set to decline 5% YoY in 2025, taking into account trade-war concerns and the fact gasoline cars are losing share to BEVs, especially in China. To recap, the Chinese automotive sector accounted for 18% and 17% of global Pt and Pd demand, respectively, last year
📊 In 2025 JM sees a ~10% deficit on the global Pt market, as it less exposed to the downturn in automotive demand due to diversified demand structure; Pd is expected to shift into a balanced state after 5% deficit in 2024 as it more dependent on autocatalyst demand (~85% of Pd consumption)
⛏On the supply side, according to JM, primary Pt and Pd supply are expected to fall 3-4% YoY in 2025, mainly driven by workforce 'rationalisation programmes' in South Africa, as well as planned production cuts in North America, amid continuously weak prices
#PGMs
https://metals-wire.com/sector/PGM
Morning Bites (part 2)
🏦 China’s aggregate financing was at CNY 2.19tn in April, vs. a negative reading recorded last year, and after the 1% YoY decline in March. Specifically, traditional bank loans dropped 62% YoY in April (seasonally slow and volatile month), as new loans slumped sharply and credit expanded at a slower pace than expected in April, as trade tensions with the US harmed sentiment
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
🏦 China’s aggregate financing was at CNY 2.19tn in April, vs. a negative reading recorded last year, and after the 1% YoY decline in March. Specifically, traditional bank loans dropped 62% YoY in April (seasonally slow and volatile month), as new loans slumped sharply and credit expanded at a slower pace than expected in April, as trade tensions with the US harmed sentiment
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
🏭Global primary aluminium output rose 2.6% YoY in April, in line with the revised dynamics in March, per International Aluminium Institute (IAI) data. Chinese production (60% of global Al output) increased 3.5% YoY last month, while ex. China output inched up 0.8% 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 we expect to reach USD 2,700-2,900/t by late 2025 - early 2026
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 43.4mnt in 4mo25 in annualised terms, per IAI data)
#aluminium
🏭Global primary aluminium output rose 2.6% YoY in April, in line with the revised dynamics in March, per International Aluminium Institute (IAI) data. Chinese production (60% of global Al output) increased 3.5% YoY last month, while ex. China output inched up 0.8% 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 we expect to reach USD 2,700-2,900/t by late 2025 - early 2026
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 43.4mnt in 4mo25 in annualised terms, per IAI data)
#aluminium
Morning Bites
🔗Global crude steel output was flat YoY, standing at 156mnt in April, after the 3% YoY gain seen in March, according to World Steel Association data. China’s production (55% of global crude steel supply in April) was also unchanged, per WSA data. Meanwhile, Russia’s production dropped 5% YoY last month, while EU output shrank 3% YoY. Indian output (~8% of global steel supply) gained 6% YoY, also being up 7% YoY in 4mo25
We remind our readers that Beijing plans to cut 'excessive' steel output in 2025 (2-5% YoY, per market estimates), which is likely to cool down surging Chinese steel exports, and support global prices in 2025, we believe
#steel
https://metals-wire.com/sector/Steel
🔗Global crude steel output was flat YoY, standing at 156mnt in April, after the 3% YoY gain seen in March, according to World Steel Association data. China’s production (55% of global crude steel supply in April) was also unchanged, per WSA data. Meanwhile, Russia’s production dropped 5% YoY last month, while EU output shrank 3% YoY. Indian output (~8% of global steel supply) gained 6% YoY, also being up 7% YoY in 4mo25
We remind our readers that Beijing plans to cut 'excessive' steel output in 2025 (2-5% YoY, per market estimates), which is likely to cool down surging Chinese steel exports, and support global prices in 2025, we believe
#steel
https://metals-wire.com/sector/Steel
Morning Bites
🇨🇳Investment in China’s grid infrastructure slid 2% YoY in April, after the +18% YoY in March, per NBS AA data. The figure was also up 15% YoY in 4mo25. On our numbers, the grid accounts for 10-15% of Al and Cu demand in China, so upbeat investments (due to the growing installations of renewable energy) are fundamentally supportive of demand for these base metals
Although State Grid sees only a 10% YoY CapEx increase in 2025, the actual figure might be higher, in our view: historically, the company has often exceeded its investment guidance
🥈Solar panel installations in China surged 3.2x YoY in April, vs. +65% YoY in March, per NEA data, as some subsidies were planned to expire in May-June to alleviate pressure on grid. The figure was also up 61% YoY in 4mo25. Given the solid demand for renewable energy in China, we maintain our positive view on silver, Cu and Al, which are the key beneficiary metals of the proposed global transition to clean energy in 2024-30
#silver #copper #aluminium
🇨🇳Investment in China’s grid infrastructure slid 2% YoY in April, after the +18% YoY in March, per NBS AA data. The figure was also up 15% YoY in 4mo25. On our numbers, the grid accounts for 10-15% of Al and Cu demand in China, so upbeat investments (due to the growing installations of renewable energy) are fundamentally supportive of demand for these base metals
Although State Grid sees only a 10% YoY CapEx increase in 2025, the actual figure might be higher, in our view: historically, the company has often exceeded its investment guidance
🥈Solar panel installations in China surged 3.2x YoY in April, vs. +65% YoY in March, per NEA data, as some subsidies were planned to expire in May-June to alleviate pressure on grid. The figure was also up 61% YoY in 4mo25. Given the solid demand for renewable energy in China, we maintain our positive view on silver, Cu and Al, which are the key beneficiary metals of the proposed global transition to clean energy in 2024-30
#silver #copper #aluminium
Morning Bites
⛏️ Ivanhoe has again suspended underground activities at its Kakula mine in the DRC due to seismic activity, according to a company press-release. Following the previous suspension of underground operations announced on May 20, management now expects the seismic activity to continue for weeks. Furthermore, Ivanhoe notes increased water inflows into the mine, so the company's 2025 production and cost guidance has been withdrawn pending review
Given Kakula is one of the ten largest copper mines in the world, with 2024 production of 380kt (~1.5% of global Cu output), the protracted supply disruption, if it materialised, might additionally widen the market deficit in 2025. In our view, this is a supportive factor for the Cu price, which we expect to reach USD 12,000/t by late 2025 or early 2026
#copper
⛏️ Ivanhoe has again suspended underground activities at its Kakula mine in the DRC due to seismic activity, according to a company press-release. Following the previous suspension of underground operations announced on May 20, management now expects the seismic activity to continue for weeks. Furthermore, Ivanhoe notes increased water inflows into the mine, so the company's 2025 production and cost guidance has been withdrawn pending review
Given Kakula is one of the ten largest copper mines in the world, with 2024 production of 380kt (~1.5% of global Cu output), the protracted supply disruption, if it materialised, might additionally widen the market deficit in 2025. In our view, this is a supportive factor for the Cu price, which we expect to reach USD 12,000/t by late 2025 or early 2026
#copper
Morning Bites
🚘EU + UK passenger car registrations were flat YoY in April, vs. +3% YoY in March. The growth was mainly driven by BEV sales (+30% YoY in April), while catalyst-containing car registrations slid 5% YoY; the figure matched our estimates, remaining 20% 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 PGM market fundamentals
In 2024, the EU+UK accounted for some 23% and 26% of world autocatalyst Pd and Pt demand, respectively
#cars
🚘EU + UK passenger car registrations were flat YoY in April, vs. +3% YoY in March. The growth was mainly driven by BEV sales (+30% YoY in April), while catalyst-containing car registrations slid 5% YoY; the figure matched our estimates, remaining 20% 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 PGM market fundamentals
In 2024, the EU+UK accounted for some 23% and 26% of world autocatalyst Pd and Pt demand, respectively
#cars
Morning Bites (part 1)
🔗CISA mills' daily crude steel production in mid-May was reported at 2.20mnt, down 0.3% vs. the previous ten days, and 0.5% lower YoY. Local steel inventories increased 1.8% over the period, but were down 2.8% YoY
Meanwhile, on a YTD basis (through 20 May), production dynamics remain upbeat (+1.8% YoY, per CISA's data), despite Beijing’s plans to cut 'excessive' steel output in 2025. To recap, these measures which might affect 2-5% of China’s 2024 supply, per market participants’ estimates
China accounts for ~57% of global steel supply
#steel
🔗CISA mills' daily crude steel production in mid-May was reported at 2.20mnt, down 0.3% vs. the previous ten days, and 0.5% lower YoY. Local steel inventories increased 1.8% over the period, but were down 2.8% YoY
Meanwhile, on a YTD basis (through 20 May), production dynamics remain upbeat (+1.8% YoY, per CISA's data), despite Beijing’s plans to cut 'excessive' steel output in 2025. To recap, these measures which might affect 2-5% of China’s 2024 supply, per market participants’ estimates
China accounts for ~57% of global steel supply
#steel
Morning Bites (part 2)
🥉Global mined copper production jumped 3.6% YoY in March, vs. the revised -1.6% YoY in February, the International Copper Study Group (ICSG) reports. Meanwhile, production was up 1.1% YoY in 1Q25: growth in Peru (+4.0% YoY) and the DRC (+7.0% YoY) was mainly offset by a slowdown in Chile and Indonesia. Apparent consumption dynamics continued to be ahead of mine supply in 1Q25, being up 3.0% YoY, mainly driven by China (+4.5% YoY)
We maintain our bullish view on copper, amid both short- and 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); however, tariff wars, if they further escalate, would imply additional risks for the demand for base metals
#copper
🥉Global mined copper production jumped 3.6% YoY in March, vs. the revised -1.6% YoY in February, the International Copper Study Group (ICSG) reports. Meanwhile, production was up 1.1% YoY in 1Q25: growth in Peru (+4.0% YoY) and the DRC (+7.0% YoY) was mainly offset by a slowdown in Chile and Indonesia. Apparent consumption dynamics continued to be ahead of mine supply in 1Q25, being up 3.0% YoY, mainly driven by China (+4.5% YoY)
We maintain our bullish view on copper, amid both short- and 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); however, tariff wars, if they further escalate, would imply additional risks for the demand for base metals
#copper
Morning Bites
📈Russia’s gold output rose 8.0% YoY in April, after the 6.9% YoY gain in March, per Rosstat data. The country’s production in 4mo25 was up 2.6% YoY. Russia accounts for ~10% of the world's mined gold supply
We maintain our view that gold is trading above what we see as its fundamentally reasonable level for 1H25 (~USD 2,500/oz), but we expect the precious metal’s price to remain elevated in 2025, given steady inflows and geopolitical tensions
#gold
📈Russia’s gold output rose 8.0% YoY in April, after the 6.9% YoY gain in March, per Rosstat data. The country’s production in 4mo25 was up 2.6% YoY. Russia accounts for ~10% of the world's mined gold supply
We maintain our view that gold is trading above what we see as its fundamentally reasonable level for 1H25 (~USD 2,500/oz), but we expect the precious metal’s price to remain elevated in 2025, given steady inflows and geopolitical tensions
#gold
Morning Bites
📉China’s output of aluminium products inched down 1% YoY to 5.8mnt in April, in line with March dynamics. We maintain our positive view on aluminium, given the rapid expansion of the new energy sector in China (~60% of global consumption), as well as limited potential for additional supply growth. Note that Al output in China is capped at 45mnt (while it produced 43.4mnt in 4mo25 in annualised terms, per IAI data)
🥉China's output of copper products jumped 15% YoY in April to 2.1mnt, vs. +6% in March. We reiterate our view that surging grid investments in China, solid demand trends globally and the monetary policy easing cycle in key economies (the US/EU and China) are likely to add further support to the red metal’s price (which we expect to reach USD 12,000/t by late-2025 or early-2026). China represents ~55% of global Cu demand
#aluminium #copper
📉China’s output of aluminium products inched down 1% YoY to 5.8mnt in April, in line with March dynamics. We maintain our positive view on aluminium, given the rapid expansion of the new energy sector in China (~60% of global consumption), as well as limited potential for additional supply growth. Note that Al output in China is capped at 45mnt (while it produced 43.4mnt in 4mo25 in annualised terms, per IAI data)
🥉China's output of copper products jumped 15% YoY in April to 2.1mnt, vs. +6% in March. We reiterate our view that surging grid investments in China, solid demand trends globally and the monetary policy easing cycle in key economies (the US/EU and China) are likely to add further support to the red metal’s price (which we expect to reach USD 12,000/t by late-2025 or early-2026). China represents ~55% of global Cu demand
#aluminium #copper
Morning Bites (part 1)
💎Global rough diamond supply fell 3% YoY to 108mnct* in 2024, after a 8% decline YoY in 2023, per Kimberley Process data. Specifically, Botswana's output (* - adjusted to De Beers data) was down 27% YoY, while production in Russia was flat YoY at 37.3mnct
Following the supply contraction in 2024, diamond exports (from the 12 key producing countries) declined 7% YoY (vs. -8% YoY in 2023). However, according to industry reports, in early-2025 De Beers sold its rough stones at discounts to selected traders, indicating a possible breakdown in the price-over-volume strategy
We maintain our view that it might take longer than we had anticipated for the global diamond market to recover, given still high midstream inventories and the risks to supply discipline in 2025. Meanwhile, further de-escalation of the US-China trade war (jointly, they account for ~65% of the world polished demand) might become a favorable factor for consumer confidence
#diamonds
💎Global rough diamond supply fell 3% YoY to 108mnct* in 2024, after a 8% decline YoY in 2023, per Kimberley Process data. Specifically, Botswana's output (* - adjusted to De Beers data) was down 27% YoY, while production in Russia was flat YoY at 37.3mnct
Following the supply contraction in 2024, diamond exports (from the 12 key producing countries) declined 7% YoY (vs. -8% YoY in 2023). However, according to industry reports, in early-2025 De Beers sold its rough stones at discounts to selected traders, indicating a possible breakdown in the price-over-volume strategy
We maintain our view that it might take longer than we had anticipated for the global diamond market to recover, given still high midstream inventories and the risks to supply discipline in 2025. Meanwhile, further de-escalation of the US-China trade war (jointly, they account for ~65% of the world polished demand) might become a favorable factor for consumer confidence
#diamonds
Morning Bites (part 2)
💍China’s jewellery and watch retail sales surged 30% YoY in April, accelerating from the +14% YoY in March, reaching a record value for this month, per NBS data
However, the positive dynamics most likely reflected high gold prices (+38% YoY in April 2025). According to Rapaport, China’s diamond sales remained sluggish in April, with only modest improvement MoM
#diamonds
💍China’s jewellery and watch retail sales surged 30% YoY in April, accelerating from the +14% YoY in March, reaching a record value for this month, per NBS data
However, the positive dynamics most likely reflected high gold prices (+38% YoY in April 2025). According to Rapaport, China’s diamond sales remained sluggish in April, with only modest improvement MoM
#diamonds
Morning Bites (part 1)
🌏Global manufacturing PMIs were broadly weak in May. The Eurozone Markit Manufacturing PMI was 49.4 (vs. 49.0 in April), while the US ISM Manufacturing PMI slid to 48.5
🇨🇳The official NBS Manufacturing PMI in China inched up to 49.5 (vs. 49.0 a month ago). Meanwhile, the Caixin China Manufacturing PMI slid to 48.3
🇮🇳 India’s manufacturing PMI of 57.6 remains one of the strongest indicators among the world's key economies
❗️Overall, global PMI indices were below 50.0 in May, underlining the weakness of local manufacturing activity, exept India, with PMI continuously over 55.0. Meanwhile, we reiterate our view that the additional Chinese stimulus we expect in 2025 (in addition to the recently announced package) might bolster local demand for industrial metals this year (e.g. aluminum and copper)
#PMIs
🌏Global manufacturing PMIs were broadly weak in May. The Eurozone Markit Manufacturing PMI was 49.4 (vs. 49.0 in April), while the US ISM Manufacturing PMI slid to 48.5
🇨🇳The official NBS Manufacturing PMI in China inched up to 49.5 (vs. 49.0 a month ago). Meanwhile, the Caixin China Manufacturing PMI slid to 48.3
🇮🇳 India’s manufacturing PMI of 57.6 remains one of the strongest indicators among the world's key economies
❗️Overall, global PMI indices were below 50.0 in May, underlining the weakness of local manufacturing activity, exept India, with PMI continuously over 55.0. Meanwhile, we reiterate our view that the additional Chinese stimulus we expect in 2025 (in addition to the recently announced package) might bolster local demand for industrial metals this year (e.g. aluminum and copper)
#PMIs
Morning Bites (part 2)
🏦 Global central banks purchased 12t of gold net in April, vs. the +21t in March marking the 23rd consecutive month of reserve accumulation, the World Gold Council reports. The National Bank of Poland remains the leading buyer: both in April (+12t) and on a YTD basis (+61t), per official data. On the sellers side again was Uzbekistan, which sold 11t
At spot, gold continues to trade above what we see as its fundamentally reasonable level for 1H25 (~USD 2,500/oz); however, upside risks prevail for the precious metal’s price, given the steady inflows into global ETFs and central banks, as well as continuous geopolitical tensions and trade war uncertainties
#gold
🏦 Global central banks purchased 12t of gold net in April, vs. the +21t in March marking the 23rd consecutive month of reserve accumulation, the World Gold Council reports. The National Bank of Poland remains the leading buyer: both in April (+12t) and on a YTD basis (+61t), per official data. On the sellers side again was Uzbekistan, which sold 11t
At spot, gold continues to trade above what we see as its fundamentally reasonable level for 1H25 (~USD 2,500/oz); however, upside risks prevail for the precious metal’s price, given the steady inflows into global ETFs and central banks, as well as continuous geopolitical tensions and trade war uncertainties
#gold
Morning Bites
💎US jewellery sales inched up 1% YoY in April, after being flat YoY in March, IDEX reports, citing local Department of Commerce data. According to Rapaport, suppliers were keeping more inventory in the US, while retailers showed steady interest, especially in fancy-shape diamonds
💍Hong Kong jewellery and watch sales slid 2% YoY in April, vs. the -3% YoY seen in March, per government data. According to Rapaport, local diamond demand remains weak with modest MoM improvement
Diamond market recovery might take longer than we had anticipated given still high midstream inventories and the risks to supply discipline in 2025
#diamonds
💎US jewellery sales inched up 1% YoY in April, after being flat YoY in March, IDEX reports, citing local Department of Commerce data. According to Rapaport, suppliers were keeping more inventory in the US, while retailers showed steady interest, especially in fancy-shape diamonds
💍Hong Kong jewellery and watch sales slid 2% YoY in April, vs. the -3% YoY seen in March, per government data. According to Rapaport, local diamond demand remains weak with modest MoM improvement
Diamond market recovery might take longer than we had anticipated given still high midstream inventories and the risks to supply discipline in 2025
#diamonds
Morning Bites
📉Gold-backed ETFs sold 19t of gold net in May, after the +115t in April, according to World Gold Council data. Most of the outflows were recorded in North America (-16t). However, since May 2024, global funds have accumulated 462t net (~10% of world physical demand, in annualised terms), following the monetary easing cycle in key economies (EU/US and China) as well as geopolitical unrest. These factors are still in place and the ETF outflows are unlikely to be sustainable, in our view
Although at spot gold continues to trade above what we see as its fundamentally reasonable level for 1H25 (~USD 2,500/oz), we think the precious metal’s price will remain elevated in 2025, given strong inflows into global central banks and ETFs, in addition to the global trade related concerns
#ETF #gold
📉Gold-backed ETFs sold 19t of gold net in May, after the +115t in April, according to World Gold Council data. Most of the outflows were recorded in North America (-16t). However, since May 2024, global funds have accumulated 462t net (~10% of world physical demand, in annualised terms), following the monetary easing cycle in key economies (EU/US and China) as well as geopolitical unrest. These factors are still in place and the ETF outflows are unlikely to be sustainable, in our view
Although at spot gold continues to trade above what we see as its fundamentally reasonable level for 1H25 (~USD 2,500/oz), we think the precious metal’s price will remain elevated in 2025, given strong inflows into global central banks and ETFs, in addition to the global trade related concerns
#ETF #gold
🗞Today, China published its preliminary import/export statistics for May (see table above)
#statistics #China
#statistics #China