SQM 4Q22 results โ largely in-line with expectations
๐SQM's 4Q22 revenues were slightly above both the consensus and our estimates (+5% and +3%, respectively), mostly due to higher lithium output, which offset a ~10% lower realised price. Overall, EBITDA was close to our expectations (+3% vs. consensus and +1% vs. us)
โManagement expects >20% lithium demand growth in FY23 and guides for the companyโs lithium capacity to reach 265kt in 2025 (+45% vs the 2022 level)
โ๏ธAt spot prices, we expect 1Q23 EBITDA to grow in the low-single digits QoQ
$SQM #lithium
https://metals-wire.com:3000/company/SQM_US/
๐SQM's 4Q22 revenues were slightly above both the consensus and our estimates (+5% and +3%, respectively), mostly due to higher lithium output, which offset a ~10% lower realised price. Overall, EBITDA was close to our expectations (+3% vs. consensus and +1% vs. us)
โManagement expects >20% lithium demand growth in FY23 and guides for the companyโs lithium capacity to reach 265kt in 2025 (+45% vs the 2022 level)
โ๏ธAt spot prices, we expect 1Q23 EBITDA to grow in the low-single digits QoQ
$SQM #lithium
https://metals-wire.com:3000/company/SQM_US/
๐3
Implats CY 2H22 results - EBITDA outperformance due to one-off
๐In CY 2H22, the company's revenues came 4% below consensus and 3% under our forecast, mostly due to softer proceeds from its refining division (IRS). However, EBITDA outperformed (+8% vs. consensus and +10% vs. us), due to a positive one-off effect (site-by-site EBITDA was still 6% below our estimates)
โThe miner reiterated its FY23 (ending 30 June 2023) production guidance: on average, refined 6E PGMs output is expected to stay flat YoY. However, the growth in cash costs per ounce was revised to 9% YoY (from ~7% YoY)
๐ฐThe BoD has declared an interim cash dividend for FY23 of ZAR 3.57bn (~USD 206mn), which implies a DY of 2.7%
๐On our numbers, at spot, Impala's CY 1H23F EBITDA might be moderately weaker HoH, due to the recent drop in palladium and rhodium prices
#IMP #PGMs
https://metals-wire.com/company/IMP_SJ/
๐In CY 2H22, the company's revenues came 4% below consensus and 3% under our forecast, mostly due to softer proceeds from its refining division (IRS). However, EBITDA outperformed (+8% vs. consensus and +10% vs. us), due to a positive one-off effect (site-by-site EBITDA was still 6% below our estimates)
โThe miner reiterated its FY23 (ending 30 June 2023) production guidance: on average, refined 6E PGMs output is expected to stay flat YoY. However, the growth in cash costs per ounce was revised to 9% YoY (from ~7% YoY)
๐ฐThe BoD has declared an interim cash dividend for FY23 of ZAR 3.57bn (~USD 206mn), which implies a DY of 2.7%
๐On our numbers, at spot, Impala's CY 1H23F EBITDA might be moderately weaker HoH, due to the recent drop in palladium and rhodium prices
#IMP #PGMs
https://metals-wire.com/company/IMP_SJ/
Morning Bites (part 1)
๐ฆ Global Central Banks continued to accumulate gold reserves in January, purchasing 32.7t of gold (vs. 26.5t in December), the World Gold Council reports. The main buyers were Turkey and China (23.3t and 14.9t, respectively). Meantime, the only net-seller was Uzbekistan, which reduced its reserves by 11.5t (vs. -1.2t in December). Overall, the dynamics are supportive for the sentiment on gold, especially as demand from central banks jumped >10x YoY in 4Q22. However, Turkey (~3% of world physical gold demand in 2022) is considering a reduction of its gold imports after the recent earthquakes, which might pressure future gold consumption
#gold
https://metals-wire.com/sector/Gold
๐ฆ Global Central Banks continued to accumulate gold reserves in January, purchasing 32.7t of gold (vs. 26.5t in December), the World Gold Council reports. The main buyers were Turkey and China (23.3t and 14.9t, respectively). Meantime, the only net-seller was Uzbekistan, which reduced its reserves by 11.5t (vs. -1.2t in December). Overall, the dynamics are supportive for the sentiment on gold, especially as demand from central banks jumped >10x YoY in 4Q22. However, Turkey (~3% of world physical gold demand in 2022) is considering a reduction of its gold imports after the recent earthquakes, which might pressure future gold consumption
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
๐Hong Kong jewellery and watch sales surged 23% YoY in January, rebounding from the revised 5% YoY drop in December. Meanwhile, the category's revenues were the highest since January 2020. According to Rapaport, this growth reflected the recent opening of the Hong Kong border with Mainland China, as well as improved labour market conditions and the earlier start to the Lunar New Year. In our view, this might slightly support the demand for rough diamonds, which is still affected by the unfavourable macroeconomic conditions globally
๐Lithium Americas has begun construction of its Thacker Pass lithium project, after the US federal court rejected environmental claims, the company reports. To recap, the project aims to achieve 80kt LCE production in two phases. During the Phase 1, the miner is set to achieve 40kt LCE output by 2H26 (~2% of global Li supply in 2026F), which is in line with growing consumer interest for EVs
#diamonds #lithium
https://metals-wire.com:3000/news-reports
๐Hong Kong jewellery and watch sales surged 23% YoY in January, rebounding from the revised 5% YoY drop in December. Meanwhile, the category's revenues were the highest since January 2020. According to Rapaport, this growth reflected the recent opening of the Hong Kong border with Mainland China, as well as improved labour market conditions and the earlier start to the Lunar New Year. In our view, this might slightly support the demand for rough diamonds, which is still affected by the unfavourable macroeconomic conditions globally
๐Lithium Americas has begun construction of its Thacker Pass lithium project, after the US federal court rejected environmental claims, the company reports. To recap, the project aims to achieve 80kt LCE production in two phases. During the Phase 1, the miner is set to achieve 40kt LCE output by 2H26 (~2% of global Li supply in 2026F), which is in line with growing consumer interest for EVs
#diamonds #lithium
https://metals-wire.com:3000/news-reports
Week ahead data releases in M&M
Several companies are due to report their 4Q22/2H22 earnings this week. Our forecasts are, on average, less upbeat than the consensus estimates
#reporting_season
https://metals-wire.com:3000/events
Several companies are due to report their 4Q22/2H22 earnings this week. Our forecasts are, on average, less upbeat than the consensus estimates
#reporting_season
https://metals-wire.com:3000/events
Morning Bites
๐ต๐ช Peruvian communities are set to resume transportation blockades this week, after a truce that had allowed local companies to restart mining, Reuters reports. Furthermore, starting from Monday, the protesters are going to demand that operations at the Antapaccay, Las Bambas and Constancia mines (2.2% of world mined copper supply in 2022E) be stopped. Overall, the blockades are likely to keep weighing on domestic copper supply. However, we do not expect a substantial impact on sentiment - most of the effect from Peruโs political unrest is already priced in by the market, we believe
#copper
https://metals-wire.com/sector/Copper
๐ต๐ช Peruvian communities are set to resume transportation blockades this week, after a truce that had allowed local companies to restart mining, Reuters reports. Furthermore, starting from Monday, the protesters are going to demand that operations at the Antapaccay, Las Bambas and Constancia mines (2.2% of world mined copper supply in 2022E) be stopped. Overall, the blockades are likely to keep weighing on domestic copper supply. However, we do not expect a substantial impact on sentiment - most of the effect from Peruโs political unrest is already priced in by the market, we believe
#copper
https://metals-wire.com/sector/Copper
๐Today, China published its preliminary import/export statistics for January-February (see table above)
#statistics #China
https://metals-wire.com:3000/news-reports
#statistics #China
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
๐Chinaโs finished steel net exports surged 83% YoY in January-February, accelerating from the 17% YoY growth in December. Meanwhile, average daily steel production and inventories grew further, on the YoY basis, in the previous two months. Hence, some steel volumes might have been shipped abroad, given that domestic consumption had not yet fully recovered. We remind readers that China has recently published strong financing data for January (historically, the most important month), which might support domestic construction activity and, hence, the demand for steel in 2023
๐ชจChinaโs coal imports jumped 71% YoY in January-February (vs. flat YoY in December). According to Reuters, the strong dynamics were mostly due to the low base effect, as utilities replenished inventories, on expectations of upbeat demand after the country abandoned its zero-COVID policy in late 2022
#coal #steel
https://metals-wire.com:3000/news-reports
๐Chinaโs finished steel net exports surged 83% YoY in January-February, accelerating from the 17% YoY growth in December. Meanwhile, average daily steel production and inventories grew further, on the YoY basis, in the previous two months. Hence, some steel volumes might have been shipped abroad, given that domestic consumption had not yet fully recovered. We remind readers that China has recently published strong financing data for January (historically, the most important month), which might support domestic construction activity and, hence, the demand for steel in 2023
๐ชจChinaโs coal imports jumped 71% YoY in January-February (vs. flat YoY in December). According to Reuters, the strong dynamics were mostly due to the low base effect, as utilities replenished inventories, on expectations of upbeat demand after the country abandoned its zero-COVID policy in late 2022
#coal #steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
๐CISA mills daily crude steel production grew 6.1% to 2.22mnt in the late-February from the second ten days of the month. This represented 6.2% YoY growth (vs. +10.2% YoY in the previous ten days). At the same time, local steel inventories contracted 10.8% over the period (still 8.2% above the 2022 level, as of 28 February). Overall, the decline in stocks, as well as the recently reported strong PMIs in China, might indicate some revival of domestic steel demand, in our view
๐South America is aiming to create a lithium OPEC, according to the Argentinean delegation at the annual PDAC Convention. Hence, Argentina, Chile, Bolivia and Brazil (~36% of world Li supply in 2022) are considering the creation of a cartel to expand their processing capacity. Overall, we do not expect this news to have much impact on the market: local governments proposed this idea in late-2022, while the timeline is still not specified
#steel #lithium
https://metals-wire.com:3000/news-reports
๐CISA mills daily crude steel production grew 6.1% to 2.22mnt in the late-February from the second ten days of the month. This represented 6.2% YoY growth (vs. +10.2% YoY in the previous ten days). At the same time, local steel inventories contracted 10.8% over the period (still 8.2% above the 2022 level, as of 28 February). Overall, the decline in stocks, as well as the recently reported strong PMIs in China, might indicate some revival of domestic steel demand, in our view
๐South America is aiming to create a lithium OPEC, according to the Argentinean delegation at the annual PDAC Convention. Hence, Argentina, Chile, Bolivia and Brazil (~36% of world Li supply in 2022) are considering the creation of a cartel to expand their processing capacity. Overall, we do not expect this news to have much impact on the market: local governments proposed this idea in late-2022, while the timeline is still not specified
#steel #lithium
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
๐US jewellery sales were down 2% YoY in January, after the revised 3% YoY fall in December. Overall, the figure came in materially below the preliminary expectations (+6% YoY). According to market participants, the cautious market mood persists, amid slow trading and low production volumes. Hence, we reiterate our view that the ongoing decline in US jewellery sales (since October 2022) is likely to keep weighing on the global diamond sector (at least in the near future). To recap, the US represents ~50% of world diamond jewellery sales
#diamonds
https://metals-wire.com:3000/news-reports
๐US jewellery sales were down 2% YoY in January, after the revised 3% YoY fall in December. Overall, the figure came in materially below the preliminary expectations (+6% YoY). According to market participants, the cautious market mood persists, amid slow trading and low production volumes. Hence, we reiterate our view that the ongoing decline in US jewellery sales (since October 2022) is likely to keep weighing on the global diamond sector (at least in the near future). To recap, the US represents ~50% of world diamond jewellery sales
#diamonds
https://metals-wire.com:3000/news-reports
Morning Bites (part 4)
๐New car registrations in France, the UK, Spain, Italy and Germany grew 12% YoY in February, according to the preliminary data. Nonetheless, the figure was still 26% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 27% and 30%, respectively, vs. 2019, while sales in France were hit the most, by ~40%. Moreover, UK and Italy sales were 9% and 7% lower relative to 2019, respectively. Given that the above countries represent ~70% of new vehicle registrations in Europe, local car sales have likely continued to grow YoY, while remaining below their pre-pandemic levels
#cars
https://metals-wire.com:3000/sector/PGM
๐New car registrations in France, the UK, Spain, Italy and Germany grew 12% YoY in February, according to the preliminary data. Nonetheless, the figure was still 26% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 27% and 30%, respectively, vs. 2019, while sales in France were hit the most, by ~40%. Moreover, UK and Italy sales were 9% and 7% lower relative to 2019, respectively. Given that the above countries represent ~70% of new vehicle registrations in Europe, local car sales have likely continued to grow YoY, while remaining below their pre-pandemic levels
#cars
https://metals-wire.com:3000/sector/PGM
Morning Bites (part 1)
๐Gold-backed ETFs reduced their holdings by a further 34t in February (after the 26t decline in January). According to the WGC, gold ETFs last month saw outflows in EU (-25t) and in N. America (-10t). We reiterate our view that ETFs remain the main factor pressuring gold performance, despite the substantial growth in physical gold demand during 4Q22
๐จ๐ณIn February, the PBoC increased its gold reserves by 25t, to a total of 2,050t, after the 30 and 15t growth in December and January, respectively. This represented ~7% of world monthly physical gold demand in 2022, on our numbers. Historically, when ะกhina's central bank has started buying gold, the process has lasted as much as a year (as in 2015-16 and 2019). We therefore believe further purchases in 2023 are a distinct possibility, which might add some support to the precious metal's price. To recap, global institutions more than doubled their gold purchases YoY in 2022
#ETF #gold
https://metals-wire.com:3000/news-reports
๐Gold-backed ETFs reduced their holdings by a further 34t in February (after the 26t decline in January). According to the WGC, gold ETFs last month saw outflows in EU (-25t) and in N. America (-10t). We reiterate our view that ETFs remain the main factor pressuring gold performance, despite the substantial growth in physical gold demand during 4Q22
๐จ๐ณIn February, the PBoC increased its gold reserves by 25t, to a total of 2,050t, after the 30 and 15t growth in December and January, respectively. This represented ~7% of world monthly physical gold demand in 2022, on our numbers. Historically, when ะกhina's central bank has started buying gold, the process has lasted as much as a year (as in 2015-16 and 2019). We therefore believe further purchases in 2023 are a distinct possibility, which might add some support to the precious metal's price. To recap, global institutions more than doubled their gold purchases YoY in 2022
#ETF #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
๐De Beers has reported sales of USD 495mn at its 2nd cycle in 2023, 16% below the historical average and 24% lower YoY (vs. -31% YoY at the 1st cycle in 2023). According to De Beers CEO Al Cook, rough diamond demand remained steady, despite the lower sales YoY. It was also mentioned that sightholders are planning to make more purchases later in 2023. However, we maintain our cautious view on the sector, given weak rough diamond sales (since early-2023) and consistently soft US jewellery data (since October 2022). Hence, we believe global diamond demand will remain weak (at least in the near future), following the adverse macroeconomic conditions
#diamonds
https://metals-wire.com/sector/Diamonds
๐De Beers has reported sales of USD 495mn at its 2nd cycle in 2023, 16% below the historical average and 24% lower YoY (vs. -31% YoY at the 1st cycle in 2023). According to De Beers CEO Al Cook, rough diamond demand remained steady, despite the lower sales YoY. It was also mentioned that sightholders are planning to make more purchases later in 2023. However, we maintain our cautious view on the sector, given weak rough diamond sales (since early-2023) and consistently soft US jewellery data (since October 2022). Hence, we believe global diamond demand will remain weak (at least in the near future), following the adverse macroeconomic conditions
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
๐ต๐ช The Peruvian government sees commodity shipments normalising within days as nationwide protests ease, according to the countryโs minister for energy and mines minister. In addition, the minister hopes for a lasting military presence along roads to ensure that mine commitments are met. Overall, the news might be slightly negative for sentiment on the copper market (Peru accounts for ~11% of world mined Cu supply); however, some local communities have recently decided to resume transportation blockades.
#copper
https://metals-wire.com/sector/Copper
๐ต๐ช The Peruvian government sees commodity shipments normalising within days as nationwide protests ease, according to the countryโs minister for energy and mines minister. In addition, the minister hopes for a lasting military presence along roads to ensure that mine commitments are met. Overall, the news might be slightly negative for sentiment on the copper market (Peru accounts for ~11% of world mined Cu supply); however, some local communities have recently decided to resume transportation blockades.
#copper
https://metals-wire.com/sector/Copper
Morning Bites
๐ต๐ชPeruโs copper production declined 2% YoY in January, reversing from the sharp 20% YoY growth in December. Overall, the dynamics were driven by local political unrest and transportation blockades, which affected mining at key domestic copper pits, such as Las Bambas (1.4% of world mined Cu supply) and Antapaccay (0.8%). Although the news might be slightly supportive for the sentiment on copper, local authorities expect the metal's shipments to normalise soon
๐Global aluminium producers are offering 45-70% higher QoQ premiums for 2Q23, Reuters reports, citing sources involved in the pricing talks. However, the figure is still 15-27% lower YoY. Meanwhile, suppliers offered a USD 125-145/t surcharge for Japanese buyers (Asia's largest Al importer), expecting higher demand from automakers. The proposal, if agreed by buyers, would mark the first increase in 6 quarters, underpinning a recovery in the local consumption of the metal
#copper #aluminium
https://metals-wire.com:3000/news-reports
๐ต๐ชPeruโs copper production declined 2% YoY in January, reversing from the sharp 20% YoY growth in December. Overall, the dynamics were driven by local political unrest and transportation blockades, which affected mining at key domestic copper pits, such as Las Bambas (1.4% of world mined Cu supply) and Antapaccay (0.8%). Although the news might be slightly supportive for the sentiment on copper, local authorities expect the metal's shipments to normalise soon
๐Global aluminium producers are offering 45-70% higher QoQ premiums for 2Q23, Reuters reports, citing sources involved in the pricing talks. However, the figure is still 15-27% lower YoY. Meanwhile, suppliers offered a USD 125-145/t surcharge for Japanese buyers (Asia's largest Al importer), expecting higher demand from automakers. The proposal, if agreed by buyers, would mark the first increase in 6 quarters, underpinning a recovery in the local consumption of the metal
#copper #aluminium
https://metals-wire.com:3000/news-reports
Week ahead data releases in M&M
As the reporting season is coming to an end, no major miners (under our coverage) are due to report their earning this week. We await for the official production data from China and South Africa
#reporting_season
https://metals-wire.com:3000/events
As the reporting season is coming to an end, no major miners (under our coverage) are due to report their earning this week. We await for the official production data from China and South Africa
#reporting_season
https://metals-wire.com:3000/events
Morning Bites (Part 1)
โChina is aiming to tackle the growth in iron ore prices, which is more than 50% since October. The Chinese authorities are urging companies that store massive volumes to sell some of their materials. They are also considering raising port-storage fees for large cargoes in order to stimulate trade. China is the largest iron ore consumer (~70% of the world's imports), and such regulations might exert pressure on prices, although there has been no effect so far.
๐ต๐ฆFirst Quantum has resumed operations at the port of Punta Rincon after the suspension since 23 February, Reuters reports. First Quantum halted ore processing operations in February after exceeding the storage limit of copper concentrate (~10kt). Cobre Panama accounts for 1.5% of global copper output, while 60% of Punta Rincon's copper concentrate export is destined for China.
#iron_ore #copper
https://metals-wire.com:3000/news-reports
โChina is aiming to tackle the growth in iron ore prices, which is more than 50% since October. The Chinese authorities are urging companies that store massive volumes to sell some of their materials. They are also considering raising port-storage fees for large cargoes in order to stimulate trade. China is the largest iron ore consumer (~70% of the world's imports), and such regulations might exert pressure on prices, although there has been no effect so far.
๐ต๐ฆFirst Quantum has resumed operations at the port of Punta Rincon after the suspension since 23 February, Reuters reports. First Quantum halted ore processing operations in February after exceeding the storage limit of copper concentrate (~10kt). Cobre Panama accounts for 1.5% of global copper output, while 60% of Punta Rincon's copper concentrate export is destined for China.
#iron_ore #copper
https://metals-wire.com:3000/news-reports
๐1
Morning Bites (Part 2)
๐Indiaโs rough diamond net imports fell 18% YoY in February, less than the -33% YoY in January. Meanwhile Indiaโs polished diamond net exports grew 23% YoY (vs. -31% YoY in January) after the continuous decline since September 2022. Therefore, we reiterate our outlook regarding the stressed macroeconomic conditions and the notable decrease in De Beers sales, that are keeping the diamond sector under pressure
Meanwhile, Indiaโs synthetic rough diamond net imports decreased 60% YoY in February (vs. -8% YoY in January). However, the share of lab-grown net rough imports in natural diamond imports fell to 4% in February (vs. 7% a year ago)
#diamonds
https://metals-wire.com/sector/Diamonds
๐Indiaโs rough diamond net imports fell 18% YoY in February, less than the -33% YoY in January. Meanwhile Indiaโs polished diamond net exports grew 23% YoY (vs. -31% YoY in January) after the continuous decline since September 2022. Therefore, we reiterate our outlook regarding the stressed macroeconomic conditions and the notable decrease in De Beers sales, that are keeping the diamond sector under pressure
Meanwhile, Indiaโs synthetic rough diamond net imports decreased 60% YoY in February (vs. -8% YoY in January). However, the share of lab-grown net rough imports in natural diamond imports fell to 4% in February (vs. 7% a year ago)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (Part 1)
๐ต๐ชPeruโs Las Bambas copper mine is returning to full capacity, following the removal of roadblocks that had disrupted transporation, MMG reports. The miner is also negotiating with local communities to ensure stable supply and export logistics at the pit (1.4% of global mined Cu supply). Overall, the news is in line with the recent claims by local authorities, that most of the effect on sentiment is likely already priced in by the market
โThe work at Guinea's Simandou iron ore project is set to resume in March, as the government and shareholders have agreed on the joint venture's terms, according to Reuters. This is likely to support the previous plans to restart development this month. To recap, the domestic authorities see the first production in March 2025. We reiterate our view that the timing is rather ambitious, amid the mine's huge size (~4% of world production in 2022E) and given the local political uncertainties
#copper #iron_ore
https://metals-wire.com:3000/news-reports
๐ต๐ชPeruโs Las Bambas copper mine is returning to full capacity, following the removal of roadblocks that had disrupted transporation, MMG reports. The miner is also negotiating with local communities to ensure stable supply and export logistics at the pit (1.4% of global mined Cu supply). Overall, the news is in line with the recent claims by local authorities, that most of the effect on sentiment is likely already priced in by the market
โThe work at Guinea's Simandou iron ore project is set to resume in March, as the government and shareholders have agreed on the joint venture's terms, according to Reuters. This is likely to support the previous plans to restart development this month. To recap, the domestic authorities see the first production in March 2025. We reiterate our view that the timing is rather ambitious, amid the mine's huge size (~4% of world production in 2022E) and given the local political uncertainties
#copper #iron_ore
https://metals-wire.com:3000/news-reports