Morning Bites (part 2)
🔗Global crude steel output was flat YoY at 147mnt in October, reversing from the 4% YoY decline in September, according to the World Steel Association. Meanwhile, the 11% YoY increase in steel output from China, which accounted for 54% of global steel production in October (vs. 57% in September), was mostly due to the low base effect from the 2021 COVID restrictions. The drop in ex-China steel output accelerated further to 15% YoY, from 11% YoY in the previous month. Steel output in the EU fell 16% YoY (vs. -17% YoY in September), amid the ongoing energy crisis and soft demand, while US steel production plunged 10% YoY (vs. -8% YoY in September). However, the decline in Russia’s steel output decelerated to 5% YoY in October, from 7% YoY in September, according to the WSA
📉We reiterate our negative outlook on global steel output, following the adverse macroeconomic conditions
#steel
https://metals-wire.com:3000/sector/Steel
🔗Global crude steel output was flat YoY at 147mnt in October, reversing from the 4% YoY decline in September, according to the World Steel Association. Meanwhile, the 11% YoY increase in steel output from China, which accounted for 54% of global steel production in October (vs. 57% in September), was mostly due to the low base effect from the 2021 COVID restrictions. The drop in ex-China steel output accelerated further to 15% YoY, from 11% YoY in the previous month. Steel output in the EU fell 16% YoY (vs. -17% YoY in September), amid the ongoing energy crisis and soft demand, while US steel production plunged 10% YoY (vs. -8% YoY in September). However, the decline in Russia’s steel output decelerated to 5% YoY in October, from 7% YoY in September, according to the WSA
📉We reiterate our negative outlook on global steel output, following the adverse macroeconomic conditions
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 3)
📌China’s new internal combustion engine car sales shrank 8% YoY in October, after the 11% YoY growth in September. Overall, the figure is in line with the growing domestic appetite for EVs. China’s auto sector accounts for some 26% and 17% of global autocatalyst Pd and Pt demand, respectively, which we think implies a slightly negative cross-read for future PGM consumption
📌China’s new EV sales jumped 82% YoY in October, slightly decelerating from the 94% YoY growth in September. The outstanding performance of EV sales in China is a moderate positive in terms of the global demand for the battery metals basket (nickel, lithium and cobalt), since China accounts for 49% of the world EV market
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
📌China’s new internal combustion engine car sales shrank 8% YoY in October, after the 11% YoY growth in September. Overall, the figure is in line with the growing domestic appetite for EVs. China’s auto sector accounts for some 26% and 17% of global autocatalyst Pd and Pt demand, respectively, which we think implies a slightly negative cross-read for future PGM consumption
📌China’s new EV sales jumped 82% YoY in October, slightly decelerating from the 94% YoY growth in September. The outstanding performance of EV sales in China is a moderate positive in terms of the global demand for the battery metals basket (nickel, lithium and cobalt), since China accounts for 49% of the world EV market
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
Morning Bites
🔗CISA mills daily crude steel output was up 0.8% to 2.00mnt in mid-November from the first ten days of the month. The dynamics show a 13.6% YoY increase (vs. +10.4% YoY in the previous ten days). In turn, steel inventories rose a further slight 3% over the period (+24.2% above the 2021 level, as of 20 November). Overall, the continuous YoY stock build-up (since end-1Q22) might indicate rather soft demand from the midstream
📈Russian gold output jumped 19.1% YoY in October, accelerating from the 1.9% YoY growth in September, Rosstat reports. Furthermore, on the 10mo22 basis, Russia's production of the yellow metal ticked up 1.1% YoY. In our view, the production recovery is an adverse factor for global gold prices, since in 2021 Russia accounted for ~9% of the world's gold mine output
#steel #gold
https://metals-wire.com:3000/news-reports
🔗CISA mills daily crude steel output was up 0.8% to 2.00mnt in mid-November from the first ten days of the month. The dynamics show a 13.6% YoY increase (vs. +10.4% YoY in the previous ten days). In turn, steel inventories rose a further slight 3% over the period (+24.2% above the 2021 level, as of 20 November). Overall, the continuous YoY stock build-up (since end-1Q22) might indicate rather soft demand from the midstream
📈Russian gold output jumped 19.1% YoY in October, accelerating from the 1.9% YoY growth in September, Rosstat reports. Furthermore, on the 10mo22 basis, Russia's production of the yellow metal ticked up 1.1% YoY. In our view, the production recovery is an adverse factor for global gold prices, since in 2021 Russia accounted for ~9% of the world's gold mine output
#steel #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
💍China’s jewellery and watch retail sales were down 32% YoY in October, completely in-line with the YoY decline in September. Overall, the dynamics correspond to the recent bearish trend, which started at the end of 2Q22. In our view, the sales might fall even more, given the recent jump in local COVID cases, which are likely to result in new lockdowns
🪨Western banks are restricting lending to the coal segment for ESG reasons, Reuters reports, citing a dozen mining company executives. As such, projects to expand operations are being left on the table. Meanwhile, the Reuters article claims that demand for the fossil fuel is so tight that some miners are selling higher-value coking coal to electricity companies instead of steelmakers. The news might be slightly supportive for coal prices in medium term, given US, European and Australian combined coal output stands for ~19% of the global supply in 2021
#diamonds #coal
https://metals-wire.com:3000/news-reports
💍China’s jewellery and watch retail sales were down 32% YoY in October, completely in-line with the YoY decline in September. Overall, the dynamics correspond to the recent bearish trend, which started at the end of 2Q22. In our view, the sales might fall even more, given the recent jump in local COVID cases, which are likely to result in new lockdowns
🪨Western banks are restricting lending to the coal segment for ESG reasons, Reuters reports, citing a dozen mining company executives. As such, projects to expand operations are being left on the table. Meanwhile, the Reuters article claims that demand for the fossil fuel is so tight that some miners are selling higher-value coking coal to electricity companies instead of steelmakers. The news might be slightly supportive for coal prices in medium term, given US, European and Australian combined coal output stands for ~19% of the global supply in 2021
#diamonds #coal
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🏗SteelOrbis sees China’s preliminary excavator sales up 25% YoY in November (domestic + export), accelerating from the 8% YoY increase in October. Meanwhile, domestic excavator sales are estimated to rise 11% YoY, rebounding from the 10% YoY drop in October. As a top-indicator of construction activity, growth in domestic excavator sales, were it to materialise, would indicate some revival in the country's property sector. That would be favourable for China’s demand for industrial metals, particularly for steel. However, there continue to be some risks from the demand side, given the latest surge in COVID cases
#global
https://metals-wire.com:3000/news-reports
🏗SteelOrbis sees China’s preliminary excavator sales up 25% YoY in November (domestic + export), accelerating from the 8% YoY increase in October. Meanwhile, domestic excavator sales are estimated to rise 11% YoY, rebounding from the 10% YoY drop in October. As a top-indicator of construction activity, growth in domestic excavator sales, were it to materialise, would indicate some revival in the country's property sector. That would be favourable for China’s demand for industrial metals, particularly for steel. However, there continue to be some risks from the demand side, given the latest surge in COVID cases
#global
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
💎Petra Diamonds lowered its LFL rough prices 5.1% at the October-November auction, vs. September. Meanwhile, the miner's LFL rough prices were up 12.6% YoY. According to Petra, the demand for rough stones is restrained at the moment. In our view, some price weakness might indicate that midstream demand has started to cool, but the overall levels continue to be solid. However, we are still concerned about the unfavourable macroeconomic conditions and the new COVID wave in China that could have an adverse effect on the sales of top miners
#diamonds
https://metals-wire.com:3000/news-reports
💎Petra Diamonds lowered its LFL rough prices 5.1% at the October-November auction, vs. September. Meanwhile, the miner's LFL rough prices were up 12.6% YoY. According to Petra, the demand for rough stones is restrained at the moment. In our view, some price weakness might indicate that midstream demand has started to cool, but the overall levels continue to be solid. However, we are still concerned about the unfavourable macroeconomic conditions and the new COVID wave in China that could have an adverse effect on the sales of top miners
#diamonds
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🔋Mexico is to start producing lithium batteries in late-2023. As such, the country's foreign minister said that Mexico was prepared for 2023 investments from S. Korea and China. However, the lithium is to come from the Sonora project, which was expected to start production in 2H24. In our view, new battery capacities, should the project materialise, would reflect the surging global demand for EVs. It is worth noting that, at full capacity, Sonora would account for >30% of global lithium mine production, per USGC, while Mexico represents 1.9% of world lithium reserves
#EV #lithium
https://metals-wire.com:3000/news-reports
🔋Mexico is to start producing lithium batteries in late-2023. As such, the country's foreign minister said that Mexico was prepared for 2023 investments from S. Korea and China. However, the lithium is to come from the Sonora project, which was expected to start production in 2H24. In our view, new battery capacities, should the project materialise, would reflect the surging global demand for EVs. It is worth noting that, at full capacity, Sonora would account for >30% of global lithium mine production, per USGC, while Mexico represents 1.9% of world lithium reserves
#EV #lithium
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🏗 Freeport-McMoRan, the US copper miner and Chinese smelters agreed to increase the TC/RC for 2023 by 35% YoY, Reuters reported. As such, the TC/RC was set at USD 88/t -- the highest figure since 2017. The indication is also 35% higher than the October 2022 contract. However, we do not expect a substantial impact on the copper price, since the new TC/RC level just catches up with the spot price and implies that the market does not expect a concentrate shortage in 2023. CRU also sees a surplus of 300kt on the market in 2023
#copper
https://metals-wire.com:3000/news-reports
🏗 Freeport-McMoRan, the US copper miner and Chinese smelters agreed to increase the TC/RC for 2023 by 35% YoY, Reuters reported. As such, the TC/RC was set at USD 88/t -- the highest figure since 2017. The indication is also 35% higher than the October 2022 contract. However, we do not expect a substantial impact on the copper price, since the new TC/RC level just catches up with the spot price and implies that the market does not expect a concentrate shortage in 2023. CRU also sees a surplus of 300kt on the market in 2023
#copper
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🏭Vale Indonesia aims to finish construction of its nickel HPAL factory by end-2025. Completion was previously targeted for 2026. The plant is slated to produce 120kt of nickel in mixed hydroxide precipitate per annum, which is to be used in EV batteries. We remind readers that the latest announced capacity is double the level announced in September. On our numbers, the project will boost long-term nickel consumption, since it is equal to 4.2% of global demand for the metal in 2021
⛏Workers at the Escondida copper mine in Chile have accepted BHP's offer and will not strike, the local labour union reports. The decision came on the back of management's proposal to improve hygiene and employee safety.
Escondida is the world's largest copper mine, accounting for ~4.8% of global mined supply in 2021. In our view, the normalisation of operating activities might have a slightly unfavourable effect on copper prices
#copper #nickel
https://metals-wire.com:3000/news-reports
🏭Vale Indonesia aims to finish construction of its nickel HPAL factory by end-2025. Completion was previously targeted for 2026. The plant is slated to produce 120kt of nickel in mixed hydroxide precipitate per annum, which is to be used in EV batteries. We remind readers that the latest announced capacity is double the level announced in September. On our numbers, the project will boost long-term nickel consumption, since it is equal to 4.2% of global demand for the metal in 2021
⛏Workers at the Escondida copper mine in Chile have accepted BHP's offer and will not strike, the local labour union reports. The decision came on the back of management's proposal to improve hygiene and employee safety.
Escondida is the world's largest copper mine, accounting for ~4.8% of global mined supply in 2021. In our view, the normalisation of operating activities might have a slightly unfavourable effect on copper prices
#copper #nickel
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
📝Sibanye Stillwater is to allocate capex of USD 616mn to advance the Keliber lithium project in Finland. Of note, the South African miner raised its stake in the Finnish mining and battery chemicals maker from 30% to 85% in October. Meanwhile, the capex programme is to start with the construction of a refinery plant within country's Kokkola industrial park, which is projected to supply 15kt of lithium hydroxide per annum, with first output planned for 2025. We estimate the new lithium capacity to account for ~4% of the global lithium output, which would support supply amid growing consumer interest for EVs globally
#lithium #EV
https://metals-wire.com:3000/news-reports
📝Sibanye Stillwater is to allocate capex of USD 616mn to advance the Keliber lithium project in Finland. Of note, the South African miner raised its stake in the Finnish mining and battery chemicals maker from 30% to 85% in October. Meanwhile, the capex programme is to start with the construction of a refinery plant within country's Kokkola industrial park, which is projected to supply 15kt of lithium hydroxide per annum, with first output planned for 2025. We estimate the new lithium capacity to account for ~4% of the global lithium output, which would support supply amid growing consumer interest for EVs globally
#lithium #EV
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🔗NLMK is to lower its December HRC prices for traders 1.8% to RUB 45.8k/t (USD 753/t) ex-VAT CPT Moscow custody warehouse. Furthermore, rebar prices under the same terms were revised down 1.2% to RUB 35.0k/t (USD 575/t) ex-VAT
• The HRC domestic premium is currently at USD 224/t (vs. the historical average of USD 38/t)
• Meanwhile, the rebar-billet discount reached USD 43/t (vs. the historical premium of USD 20/t)
• Given the price decreases, the domestic HRC premium might shorten to USD 208/t, and the rebar discount to billet could widen to USD 51/t
#steel
https://metals-wire.com:3000/news-reports
🔗NLMK is to lower its December HRC prices for traders 1.8% to RUB 45.8k/t (USD 753/t) ex-VAT CPT Moscow custody warehouse. Furthermore, rebar prices under the same terms were revised down 1.2% to RUB 35.0k/t (USD 575/t) ex-VAT
• The HRC domestic premium is currently at USD 224/t (vs. the historical average of USD 38/t)
• Meanwhile, the rebar-billet discount reached USD 43/t (vs. the historical premium of USD 20/t)
• Given the price decreases, the domestic HRC premium might shorten to USD 208/t, and the rebar discount to billet could widen to USD 51/t
#steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
📄EU plants might lower 1H23 HRC prices 15-23% HoH to EUR 800-850/t with delivery, Metal Expert reports. Although the parties have not yet reached a consensus, negotiations for significant price cuts are already underway. In addition, some buyers are trying to push the level to EUR 700/t, although we think they are unlikely to succeed amid high costs. In our view, the news is unfavourable for EU steel producers, some of which are already loss-making amid the ongoing energy crisis, and this might further pressure supply
💎Lucara Diamond expects 385-415kct of diamond sales in 2023 (vs. 300-340 kct in the 2022 guidance). Meanwhile, the junior miner estimates revenues at USD 200-230mn next year (vs. USD 195-225mn expected in 2022). We note that the higher estimated sales volumes with lower revenues implies a ~15% softer realised price in 2023, which might reflect the global economic slowdown
#diamonds #steel
https://metals-wire.com:3000/news-reports
📄EU plants might lower 1H23 HRC prices 15-23% HoH to EUR 800-850/t with delivery, Metal Expert reports. Although the parties have not yet reached a consensus, negotiations for significant price cuts are already underway. In addition, some buyers are trying to push the level to EUR 700/t, although we think they are unlikely to succeed amid high costs. In our view, the news is unfavourable for EU steel producers, some of which are already loss-making amid the ongoing energy crisis, and this might further pressure supply
💎Lucara Diamond expects 385-415kct of diamond sales in 2023 (vs. 300-340 kct in the 2022 guidance). Meanwhile, the junior miner estimates revenues at USD 200-230mn next year (vs. USD 195-225mn expected in 2022). We note that the higher estimated sales volumes with lower revenues implies a ~15% softer realised price in 2023, which might reflect the global economic slowdown
#diamonds #steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
Rio Tinto sees 2023 iron ore output in Australia flat YoY at 320-335mnt. Meanwhile, in the medium term, the company plans to produce 345-360mnt/a. Of note, Rio expects rough diamond production at 4.5-5.0mnct, in 2022, and 3.0-3.8mnct in 2023. Refined copper output is to slightly decline from 190-220kt this year to 180-210kt in 2023. Overall, the news is neutral for the iron ore price from the supply side, given Rio Tinto captures ~20% of the seaborn market, on our numbers. Furthermore, a YoY decrease of some 30% in the diamond output is just a very slightly supportive factor for sentiment in the segment, since the miner accounted for only ~3% of the global diamond production in 2021. The forecasted number might be a result of the ongoing macroeconomic slowdown
#steel #diamonds
https://metals-wire.com:3000/news-reports
Rio Tinto sees 2023 iron ore output in Australia flat YoY at 320-335mnt. Meanwhile, in the medium term, the company plans to produce 345-360mnt/a. Of note, Rio expects rough diamond production at 4.5-5.0mnct, in 2022, and 3.0-3.8mnct in 2023. Refined copper output is to slightly decline from 190-220kt this year to 180-210kt in 2023. Overall, the news is neutral for the iron ore price from the supply side, given Rio Tinto captures ~20% of the seaborn market, on our numbers. Furthermore, a YoY decrease of some 30% in the diamond output is just a very slightly supportive factor for sentiment in the segment, since the miner accounted for only ~3% of the global diamond production in 2021. The forecasted number might be a result of the ongoing macroeconomic slowdown
#steel #diamonds
https://metals-wire.com:3000/news-reports
👍1
Morning Bites (part 2)
⚒Norilsk Nickel expects a 110kt nickel market surplus and 800koz palladium deficit in 2023
• The nickel market market is to remain in surplus to the tune of ~110kt in 2022-23 due to the robust Indonesian supply ramp-up. NorNik sees nickel supply at 3.19 mnt next year (+18% YoY), with low-grade metal production driving most of the figure (94kt). In our view, some nickel market surplus would obviously be unfavourable for the price, but such a situation would unlikely affect Norilsk Nickel too much, given it produces high grade metal
• The Pd market is to stay in a 0.6-0.8mnoz deficit in 2022-23 amid operational disruptions at major South African and the US producers and lower recycling volumes. Refined palladium production is to stand at 6.5 moz next year (+4% YoY). Platinum is estimated to be in balance in 2022 and in 300koz surplus in 2023, with a 6% YoY increase in supply to 5.9 moz in 2023
#nickel #PGMs
https://metals-wire.com:3000/news-reports
⚒Norilsk Nickel expects a 110kt nickel market surplus and 800koz palladium deficit in 2023
• The nickel market market is to remain in surplus to the tune of ~110kt in 2022-23 due to the robust Indonesian supply ramp-up. NorNik sees nickel supply at 3.19 mnt next year (+18% YoY), with low-grade metal production driving most of the figure (94kt). In our view, some nickel market surplus would obviously be unfavourable for the price, but such a situation would unlikely affect Norilsk Nickel too much, given it produces high grade metal
• The Pd market is to stay in a 0.6-0.8mnoz deficit in 2022-23 amid operational disruptions at major South African and the US producers and lower recycling volumes. Refined palladium production is to stand at 6.5 moz next year (+4% YoY). Platinum is estimated to be in balance in 2022 and in 300koz surplus in 2023, with a 6% YoY increase in supply to 5.9 moz in 2023
#nickel #PGMs
https://metals-wire.com:3000/news-reports
👍1
Morning Bites (part 1)
💎Petra Diamond's Williamson mine is to be idled until mid-2023, the company reports. The decision came after the partial collapse of a tailings storage facility on 7 November (the pit mine was unaffected and the accident caused no deaths or injuries). On our numbers, the Williamson mine accounted for ~0.2% of global rough diamonds production in 2021, so a half-year halt is unlikely to have a material effect on supply or prices
💍Hong Kong jewellery and watch sales rose 14% YoY in October, following the 7% YoY growth in September. According to Rapaport, the increase reflected the third round of HKD 5,000 (USD 640) stimulus payments (consumption vouchers) that were distributed in early October. The dynamics might provide small support for short-term rough diamond demand
#diamonds
https://metals-wire.com:3000/news-reports
💎Petra Diamond's Williamson mine is to be idled until mid-2023, the company reports. The decision came after the partial collapse of a tailings storage facility on 7 November (the pit mine was unaffected and the accident caused no deaths or injuries). On our numbers, the Williamson mine accounted for ~0.2% of global rough diamonds production in 2021, so a half-year halt is unlikely to have a material effect on supply or prices
💍Hong Kong jewellery and watch sales rose 14% YoY in October, following the 7% YoY growth in September. According to Rapaport, the increase reflected the third round of HKD 5,000 (USD 640) stimulus payments (consumption vouchers) that were distributed in early October. The dynamics might provide small support for short-term rough diamond demand
#diamonds
https://metals-wire.com:3000/news-reports
👍1