Morning Bites (part 1)
🔗CISA mills daily crude steel output was down 1.2% to 1.96mnt in mid-December from the first ten days of the month. This represented a 3.9% YoY increase, vs. +2.7% YoY in the previous ten days. In turn, steel inventories were up 4.2% over the period (17.8% above the 2021 level, as of 20 December). Overall, the substantial YoY inventories build-up (since end-1Q22) might indicate rather stagnating demand for steel in China
🇨🇳China is to drop the quarantine requirement for inbound travellers from January 8, Reuters reports, citing the country's National Health Commission. Local management of Covid-19 is also to be downgraded to Category B from the current top-level. In our view, the news is likely to support demand for most industrial commodities. For example, China accounted for ~52% of global apparent steel use in 2021. However, the effect on sentiment might be limited, amid concerns about soaring new Covid cases in China
#steel #global
https://metals-wire.com:3000/news-reports
🔗CISA mills daily crude steel output was down 1.2% to 1.96mnt in mid-December from the first ten days of the month. This represented a 3.9% YoY increase, vs. +2.7% YoY in the previous ten days. In turn, steel inventories were up 4.2% over the period (17.8% above the 2021 level, as of 20 December). Overall, the substantial YoY inventories build-up (since end-1Q22) might indicate rather stagnating demand for steel in China
🇨🇳China is to drop the quarantine requirement for inbound travellers from January 8, Reuters reports, citing the country's National Health Commission. Local management of Covid-19 is also to be downgraded to Category B from the current top-level. In our view, the news is likely to support demand for most industrial commodities. For example, China accounted for ~52% of global apparent steel use in 2021. However, the effect on sentiment might be limited, amid concerns about soaring new Covid cases in China
#steel #global
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
💍US preliminary jewellery sales are down 7% YoY in December, after the 4% YoY fall estimated for November, according to Mastercard SpendingPulse. Of note, the official results for November-December 2022 are to be published in early January-February 2023, respectively. Meanwhile, during the last two months of the year, consumers and retailers displayed resilience amid increasing economic pressures. Hence, we reiterate our view that the weakness in US jewellery sales, were it to materialise, is a negative factor for rough diamond demand, especially amid the recent news about business issues in India's Surat – the world's largest diamond cut-and-polish hub. We remind our readers that the US accounted for ~50% of global diamond jewellery retail sales in 2021
#diamonds
https://metals-wire.com/sector/Diamonds
💍US preliminary jewellery sales are down 7% YoY in December, after the 4% YoY fall estimated for November, according to Mastercard SpendingPulse. Of note, the official results for November-December 2022 are to be published in early January-February 2023, respectively. Meanwhile, during the last two months of the year, consumers and retailers displayed resilience amid increasing economic pressures. Hence, we reiterate our view that the weakness in US jewellery sales, were it to materialise, is a negative factor for rough diamond demand, especially amid the recent news about business issues in India's Surat – the world's largest diamond cut-and-polish hub. We remind our readers that the US accounted for ~50% of global diamond jewellery retail sales in 2021
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
🔗China’s aluminium products output rose 7% YoY to 5.55mt in November, vs. +9% YoY in October. The growth was likely fuelled by relaxed power consumption rules, given the domestic electricity curbs in 2021, which lowered local demand for the metal. Overall, the dynamics might be slightly favourable for aluminium prices: China accounted for ~58% of the global primary aluminium consumption in 2021
📈Chinese output of copper products was up 9% YoY in November to 2.11mt, decelerating from the 15% YoY growth in October. In particular, the figure was bolstered by an 8% YoY increase in the output of local power generation equipment (vs. +33% YoY in previous month). Overall, despite continuously weak construction results in China, the easing of local COVID restrictions should have a positive effect on the demand for industrial metals, including aluminium and copper
#aluminium #copper
https://metals-wire.com:3000/news-reports
🔗China’s aluminium products output rose 7% YoY to 5.55mt in November, vs. +9% YoY in October. The growth was likely fuelled by relaxed power consumption rules, given the domestic electricity curbs in 2021, which lowered local demand for the metal. Overall, the dynamics might be slightly favourable for aluminium prices: China accounted for ~58% of the global primary aluminium consumption in 2021
📈Chinese output of copper products was up 9% YoY in November to 2.11mt, decelerating from the 15% YoY growth in October. In particular, the figure was bolstered by an 8% YoY increase in the output of local power generation equipment (vs. +33% YoY in previous month). Overall, despite continuously weak construction results in China, the easing of local COVID restrictions should have a positive effect on the demand for industrial metals, including aluminium and copper
#aluminium #copper
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
📈NLMK further raised its domestic rebar prices for January, by 2.3% to RUB 36.3k/t (USD 518/t), ex-VAT CPT Moscow, after a 1.2% increase last week. Overall, the move was in-line with expectations. Hence, the new level is 1.1% above than the recent Severstal offer. According to Metal Expert, the price increases are associated with more expensive railway transportation tariffs in January, higher demand from steel trading companies and the recent rouble depreciation, driving up production costs
• The rebar-billet discount is currently at USD 86/t (vs. the historical premium of USD 20/t). On our numbers, following NLMK's two recent price increases, the discount might shorten to USD 68/t
#steel
https://metals-wire.com/sector/Steel
📈NLMK further raised its domestic rebar prices for January, by 2.3% to RUB 36.3k/t (USD 518/t), ex-VAT CPT Moscow, after a 1.2% increase last week. Overall, the move was in-line with expectations. Hence, the new level is 1.1% above than the recent Severstal offer. According to Metal Expert, the price increases are associated with more expensive railway transportation tariffs in January, higher demand from steel trading companies and the recent rouble depreciation, driving up production costs
• The rebar-billet discount is currently at USD 86/t (vs. the historical premium of USD 20/t). On our numbers, following NLMK's two recent price increases, the discount might shorten to USD 68/t
#steel
https://metals-wire.com/sector/Steel
Morning Bites
🏗SteelOrbis sees China’s preliminary excavator sales down 17% YoY in December (domestic + export), vs. the 16% YoY increase in November. Of note, SteelOrbis expects domestic excavator sales to drop 32% YoY, after the 3% YoY growth in November. Overall, potentially low domestic results imply no short-term recovery in the depressed Chinese real estate segment. Such development would keep weighing on China’s demand for industrial metals (particularly for steel), but recent easing of local Covid restrictions might limit the negative effect
📈Russian gold output was up 9.1% YoY in November, after the 19.1% YoY increase in October, according to Rosstat. Furthermore, 11mo22 production of the yellow metal grew 1.8% YoY. Hence, we reiterate our view that the ongoing production recovery (since 1H22) is an adverse factor for gold prices. Of note, Russia accounted for ~9% of the world's gold mine output in 2021
#steel #gold
https://metals-wire.com:3000/news-reports
🏗SteelOrbis sees China’s preliminary excavator sales down 17% YoY in December (domestic + export), vs. the 16% YoY increase in November. Of note, SteelOrbis expects domestic excavator sales to drop 32% YoY, after the 3% YoY growth in November. Overall, potentially low domestic results imply no short-term recovery in the depressed Chinese real estate segment. Such development would keep weighing on China’s demand for industrial metals (particularly for steel), but recent easing of local Covid restrictions might limit the negative effect
📈Russian gold output was up 9.1% YoY in November, after the 19.1% YoY increase in October, according to Rosstat. Furthermore, 11mo22 production of the yellow metal grew 1.8% YoY. Hence, we reiterate our view that the ongoing production recovery (since 1H22) is an adverse factor for gold prices. Of note, Russia accounted for ~9% of the world's gold mine output in 2021
#steel #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🔗Severstal has increased its domestic HRC prices for January by 1.8% to RUB 47.1k/t (USD 636/t) ex-VAT CPT Moscow, amid more expensive railway transportation tariffs. Hence the new level is 2.7% above NLMK’s latest offer, which was not revised yet
• The HRC domestic premium is currently at USD 70/t (vs. the historical average of USD 38/t), Hence, given the price increase, the premium might grow to USD 81/t
📌Chile's Antofagasta reports that access to its Los Pelambres mine has been blocked. According to the company, a small group is demanding compensation for supply transportation and workers. The miner added that there is no material effect on production, but work on the mine's development has been slowed. The mine accounts for 1.5% of global copper production. We would expect no substantial effect on the red metal’s prices if the action is resolved soon
#steel #copper
https://metals-wire.com:3000/news-reports
🔗Severstal has increased its domestic HRC prices for January by 1.8% to RUB 47.1k/t (USD 636/t) ex-VAT CPT Moscow, amid more expensive railway transportation tariffs. Hence the new level is 2.7% above NLMK’s latest offer, which was not revised yet
• The HRC domestic premium is currently at USD 70/t (vs. the historical average of USD 38/t), Hence, given the price increase, the premium might grow to USD 81/t
📌Chile's Antofagasta reports that access to its Los Pelambres mine has been blocked. According to the company, a small group is demanding compensation for supply transportation and workers. The miner added that there is no material effect on production, but work on the mine's development has been slowed. The mine accounts for 1.5% of global copper production. We would expect no substantial effect on the red metal’s prices if the action is resolved soon
#steel #copper
https://metals-wire.com:3000/news-reports
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Morning Bites (part 2)
🇨🇳China is to raise export tariffs on aluminium and set import duties for coal in 2023, Reuters has reported, citing the country’s finance ministry
• The aluminium and alloys tariffs are to increase from January 1, but the size of increase has not yet been specified. In our view, the measure would be somewhat supportive for aluminium prices, as China stood for ~57% of global primary aluminium supply in 2021
• Meanwhile, from 1 April 2023, the import tariff on coking and steam coal is to be 3% and 6% respectively, instead of the 0% duty to which both coal types are currently subject. Overall, this is likely to be a slightly negative factor for the seaborne demand (China is the world’s largest coal buyer), and might consequently pressure the commodity’s prices
#aluminium #coal
https://metals-wire.com:3000/news-reports
🇨🇳China is to raise export tariffs on aluminium and set import duties for coal in 2023, Reuters has reported, citing the country’s finance ministry
• The aluminium and alloys tariffs are to increase from January 1, but the size of increase has not yet been specified. In our view, the measure would be somewhat supportive for aluminium prices, as China stood for ~57% of global primary aluminium supply in 2021
• Meanwhile, from 1 April 2023, the import tariff on coking and steam coal is to be 3% and 6% respectively, instead of the 0% duty to which both coal types are currently subject. Overall, this is likely to be a slightly negative factor for the seaborne demand (China is the world’s largest coal buyer), and might consequently pressure the commodity’s prices
#aluminium #coal
https://metals-wire.com:3000/news-reports
Dear Metals Wire subscribers,
Thank you for being with us in 2022. We hope your Christmas will be filled with warmth and generosity, and that the New Year will be especially prosperous
Rest assured that we will continue our work in 2023, sharing metals markets insights and our most interesting trading ideas
All the very best,
The Metals Wire Team
Thank you for being with us in 2022. We hope your Christmas will be filled with warmth and generosity, and that the New Year will be especially prosperous
Rest assured that we will continue our work in 2023, sharing metals markets insights and our most interesting trading ideas
All the very best,
The Metals Wire Team
👍14🥰3❤2🙏1
Morning Bites (part 1)
🌏Global manufacturing PMIs were down in December. However, the Eurozone Markit Manufacturing PMI grew, although at 47.8 (up from 47.1 in November, in line with the preliminary reading), it was still below 50.0. The US ISM manufacturing PMI declined to 48.4 (from 49.0 in November), its lowest level since May 2020 (the indication was slightly below the consensus estimate of 48.5)
🇨🇳China's official PMI dropped further to 47.0 (from 48.0 in November), which was below the market forecast of 48.0. Meanwhile, China's Caixin manufacturing PMI decreased to 49.0, from 49.4 a month ago, slightly outperforming the consensus estimate of 48.8
❗️The below-50 manufacturing PMIs in the US, Eurozone and China indicate a manufacturing sector contraction in these regions, which is an unfavourable factor for the demand for industrial metals, at least in the short term, following the global economic slowdown
#PMIs
https://metals-wire.com:3000/news-reports
🌏Global manufacturing PMIs were down in December. However, the Eurozone Markit Manufacturing PMI grew, although at 47.8 (up from 47.1 in November, in line with the preliminary reading), it was still below 50.0. The US ISM manufacturing PMI declined to 48.4 (from 49.0 in November), its lowest level since May 2020 (the indication was slightly below the consensus estimate of 48.5)
🇨🇳China's official PMI dropped further to 47.0 (from 48.0 in November), which was below the market forecast of 48.0. Meanwhile, China's Caixin manufacturing PMI decreased to 49.0, from 49.4 a month ago, slightly outperforming the consensus estimate of 48.8
❗️The below-50 manufacturing PMIs in the US, Eurozone and China indicate a manufacturing sector contraction in these regions, which is an unfavourable factor for the demand for industrial metals, at least in the short term, following the global economic slowdown
#PMIs
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🔗CISA mills daily crude steel output was down 2.4% to 1.92mnt in late December, from the second ten days of the month. This represented an 8.4% YoY drop, vs. the +3.9% YoY in the previous ten days. In turn, steel inventories were down 18.4% over the period (15.6% above the 2021 level, as of 31 December). In our view, the continuous YoY stock build-up (since end-1Q22) might indicate softening demand for steel in China
🚘China's domestic car sales are expected to shrink 12.1% YoY to 2.46mn vehicles in December, according to the forecast from China's Association of Automobile Manufacturers (CAAM). The figure is roughly in line with our estimate, implying total car sales in the country at 26.75mn units for 2022 (up 1.7% YoY). To remind, CAAM also expects higher sales in 2023, which might add support to PGM demand: China’s auto sector accounts for ~26% and 17% of global autocatalyst Pd and Pt demand, respectively
#steel #cars
https://metals-wire.com:3000/news-reports
🔗CISA mills daily crude steel output was down 2.4% to 1.92mnt in late December, from the second ten days of the month. This represented an 8.4% YoY drop, vs. the +3.9% YoY in the previous ten days. In turn, steel inventories were down 18.4% over the period (15.6% above the 2021 level, as of 31 December). In our view, the continuous YoY stock build-up (since end-1Q22) might indicate softening demand for steel in China
🚘China's domestic car sales are expected to shrink 12.1% YoY to 2.46mn vehicles in December, according to the forecast from China's Association of Automobile Manufacturers (CAAM). The figure is roughly in line with our estimate, implying total car sales in the country at 26.75mn units for 2022 (up 1.7% YoY). To remind, CAAM also expects higher sales in 2023, which might add support to PGM demand: China’s auto sector accounts for ~26% and 17% of global autocatalyst Pd and Pt demand, respectively
#steel #cars
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
💍Hong Kong jewellery and watch sales dropped 8% YoY in November, reversing from the 14% YoY growth in October, when the government released retail vouchers. According to a local authorities representative, tightening financial conditions are likely to keep weighing on domestic consumption, while the easing of COVID measures and improved conditions on the labour market might support future sales results
💎US jewellery sales declined 4% YoY in November, accelerating after the 2% YoY fall in October. The results were in line with the preliminary figure. Hence, we reiterate our view that the slowdown in US jewellery sales, were it to persist, would be unfavourable for the short-term demand for rough diamonds. We note that the US accounted for ~50% of global diamond jewellery retail sales in 2021
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales dropped 8% YoY in November, reversing from the 14% YoY growth in October, when the government released retail vouchers. According to a local authorities representative, tightening financial conditions are likely to keep weighing on domestic consumption, while the easing of COVID measures and improved conditions on the labour market might support future sales results
💎US jewellery sales declined 4% YoY in November, accelerating after the 2% YoY fall in October. The results were in line with the preliminary figure. Hence, we reiterate our view that the slowdown in US jewellery sales, were it to persist, would be unfavourable for the short-term demand for rough diamonds. We note that the US accounted for ~50% of global diamond jewellery retail sales in 2021
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 4)
☢️The US has launched its USD 75mn programme to secure the domestic nuclear industry, and reduce supplies from Russia. The country's Department of Energy has signed contracts to purchase 800klb of U3O8 from five local mines (at 36% above spot prices). Of note, the US government's plan accounts for 1.7% of total US nuclear plant purchases of U308 and ~0.5% of world production in 2021. However, the effect on demand is likely to have been mostly priced-in, as the USD 75mn uranium reserve was established in 2020
#uranium
https://metals-wire.com/sector/Uranium
☢️The US has launched its USD 75mn programme to secure the domestic nuclear industry, and reduce supplies from Russia. The country's Department of Energy has signed contracts to purchase 800klb of U3O8 from five local mines (at 36% above spot prices). Of note, the US government's plan accounts for 1.7% of total US nuclear plant purchases of U308 and ~0.5% of world production in 2021. However, the effect on demand is likely to have been mostly priced-in, as the USD 75mn uranium reserve was established in 2020
#uranium
https://metals-wire.com/sector/Uranium
Morning Bites (part 1)
🏦Global central banks were net purchasers of 50t of gold in November (vs. 34t in October), the World Gold Council reports. The biggest buyer was China, with 32t (the first increase in reserves since end-3Q19), while Turkey purchased 19t (vs. 9t in October). Meanwhile, central banks sold only 5t of gold in November. The further build-up of gold reserves by institutions implies a positive read-across for the commodity prices, if it persists in the coming months
🇨🇳In December, China's central bank raised its gold holdings a further 30t to a total of 2,010t, after 32t growth in November. The increase, on our numbers, was the equivalent of 8% of the global monthly physical gold demand in 2022. Meanwhile, the two recent gold purchase cycles of the People’s Bank of China (in 2015-16 and 2019) lasted from several months to almost a year. Hence, we reiterate our view that more purchases might be reported in 2023, driving growth in gold prices
#gold
https://metals-wire.com:3000/news-reports
🏦Global central banks were net purchasers of 50t of gold in November (vs. 34t in October), the World Gold Council reports. The biggest buyer was China, with 32t (the first increase in reserves since end-3Q19), while Turkey purchased 19t (vs. 9t in October). Meanwhile, central banks sold only 5t of gold in November. The further build-up of gold reserves by institutions implies a positive read-across for the commodity prices, if it persists in the coming months
🇨🇳In December, China's central bank raised its gold holdings a further 30t to a total of 2,010t, after 32t growth in November. The increase, on our numbers, was the equivalent of 8% of the global monthly physical gold demand in 2022. Meanwhile, the two recent gold purchase cycles of the People’s Bank of China (in 2015-16 and 2019) lasted from several months to almost a year. Hence, we reiterate our view that more purchases might be reported in 2023, driving growth in gold prices
#gold
https://metals-wire.com:3000/news-reports
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Morning Bites (part 2)
📉Gold-backed ETFs reduced their holdings a slight 4t through December (after outflows of 26t in November and 59t in October). As a result, the FY22 net outflow reached 110t. According to the World Gold Council, last month, North American funds reported their first month of positive demand (9t) since April, while EU funds saw dynamics of -14t. Overall, Asian funds registered a small increase in holdings of 0.8t, while funds in other regions were down 0.2t. In our view, ETF sales were generally the main factor pressuring gold prices, and as funds become less downbeat, it might be a supportive factor for our bullish gold case
#ETF #gold
https://metals-wire.com:3000/sector/Gold
📉Gold-backed ETFs reduced their holdings a slight 4t through December (after outflows of 26t in November and 59t in October). As a result, the FY22 net outflow reached 110t. According to the World Gold Council, last month, North American funds reported their first month of positive demand (9t) since April, while EU funds saw dynamics of -14t. Overall, Asian funds registered a small increase in holdings of 0.8t, while funds in other regions were down 0.2t. In our view, ETF sales were generally the main factor pressuring gold prices, and as funds become less downbeat, it might be a supportive factor for our bullish gold case
#ETF #gold
https://metals-wire.com:3000/sector/Gold
Morning Bites (part 3)
🇨🇳China's Guangzhou city plans 1,722 new projects in 2023, worth more than CNY 6.5tn (USD 945bn), state media reports. As such, the manufacturing hub sees a development in infrastructure, new energy vehicles and biomedicine. Overall, the authorities' plans could well bolster medium-term demand for industrial and base metals somewhat. We note that Guangzhou is the fifth most populous city in China
#copper #steel
https://metals-wire.com:3000/news-reports
🇨🇳China's Guangzhou city plans 1,722 new projects in 2023, worth more than CNY 6.5tn (USD 945bn), state media reports. As such, the manufacturing hub sees a development in infrastructure, new energy vehicles and biomedicine. Overall, the authorities' plans could well bolster medium-term demand for industrial and base metals somewhat. We note that Guangzhou is the fifth most populous city in China
#copper #steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
📌The combined copper production of Chile and Peru was up 0.5% YoY in November (vs. +4% YoY in October). Overall, the dynamics imply no material effect on prices, at least in the short term, although the combined copper output is close to its six-year lows
🇨🇱Chile’s copper production shrank 5% YoY in November (vs. +2% YoY in October). According to officials, these dynamics were partly triggered by lower ore grade and operational issues affecting major producers in the sector. In addition, some deposits have also been hit by reduced water availability, accidents and maintenance. Chile accounts for ~27% of global mined copper supply
🇵🇪Peru’s copper output was up 15% YoY in November, accelerating from the 8% YoY in October. Most of the gains were driven by higher production at Antamina, Cerro Verde and other local mines. Peru accounts for some 11% of global mined copper production
#copper
https://metals-wire.com:3000/sector/Copper
📌The combined copper production of Chile and Peru was up 0.5% YoY in November (vs. +4% YoY in October). Overall, the dynamics imply no material effect on prices, at least in the short term, although the combined copper output is close to its six-year lows
🇨🇱Chile’s copper production shrank 5% YoY in November (vs. +2% YoY in October). According to officials, these dynamics were partly triggered by lower ore grade and operational issues affecting major producers in the sector. In addition, some deposits have also been hit by reduced water availability, accidents and maintenance. Chile accounts for ~27% of global mined copper supply
🇵🇪Peru’s copper output was up 15% YoY in November, accelerating from the 8% YoY in October. Most of the gains were driven by higher production at Antamina, Cerro Verde and other local mines. Peru accounts for some 11% of global mined copper production
#copper
https://metals-wire.com:3000/sector/Copper