Barrick 1Q23 results - EBITDA meets expectations
📝Barrick's 1Q23 revenues came roughly in line with estimates (-3% vs. the consensus and -1% vs. us). Meanwhile, on a consolidated basis, EBITDA was slightly above our forecast (+2%)
📉During the last quarter, the company's AISC jumped 10% QoQ to USD 1,370/oz. However, Barrick sees some normalisation at the level of USD 1,170 - 1,250/oz in 2023
📈The gold miner reiterated its FY23 production guidance, which implies output growth of ~6% YoY
💰The BoD has declared quarterly dividends of USD 0.10/sh., which implies a good 0.5% DY, in line with the dividend policy
📌At spot prices, Barrick's 2Q23F EBITDA might show a notable increase QoQ, bolstered by potentially higher sales volumes and favourable prices: gold is currently ~5% higher than the 1Q23 average
#GOLD #gold
https://metals-wire.com/company/GOLD_US/
📝Barrick's 1Q23 revenues came roughly in line with estimates (-3% vs. the consensus and -1% vs. us). Meanwhile, on a consolidated basis, EBITDA was slightly above our forecast (+2%)
📉During the last quarter, the company's AISC jumped 10% QoQ to USD 1,370/oz. However, Barrick sees some normalisation at the level of USD 1,170 - 1,250/oz in 2023
📈The gold miner reiterated its FY23 production guidance, which implies output growth of ~6% YoY
💰The BoD has declared quarterly dividends of USD 0.10/sh., which implies a good 0.5% DY, in line with the dividend policy
📌At spot prices, Barrick's 2Q23F EBITDA might show a notable increase QoQ, bolstered by potentially higher sales volumes and favourable prices: gold is currently ~5% higher than the 1Q23 average
#GOLD #gold
https://metals-wire.com/company/GOLD_US/
Morning Bites (part 1)
🏦 Global central banks' reserves remained basically unchanged in March, purchasing only 0.2t (net) of gold (vs. the revised 58.3t in February), the World Gold Council reports. The main buyers were China and Singapore (18.0t and 17.3t, respectively). On the sellers’ side were Turkey (-15.3t), Uzbekistan (-11.2t) and Kazakhstan (-10.5t). Despite some slowdown in reserves accumulation by central banks, we keep our positive view on the precious metal’s price amid inflation pressures and the unfavourable macroeconomic conditions globally. In addition, the recent poll by HSBC showed that most reserve managers are set to increase their gold holdings YoY
#gold
https://metals-wire.com/sector/Gold
🏦 Global central banks' reserves remained basically unchanged in March, purchasing only 0.2t (net) of gold (vs. the revised 58.3t in February), the World Gold Council reports. The main buyers were China and Singapore (18.0t and 17.3t, respectively). On the sellers’ side were Turkey (-15.3t), Uzbekistan (-11.2t) and Kazakhstan (-10.5t). Despite some slowdown in reserves accumulation by central banks, we keep our positive view on the precious metal’s price amid inflation pressures and the unfavourable macroeconomic conditions globally. In addition, the recent poll by HSBC showed that most reserve managers are set to increase their gold holdings YoY
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
🌏Global manufacturing PMIs showed negative dynamics in April. The Eurozone Markit Manufacturing PMI fell to 45.8 (consensus estimate - 45.5) from 47.3 in March, its lowest point since May 2020. The US ISM manufacturing PMI, however, rose to 47.1 (from the recent three-year low of 46.3)
🇨🇳 The official NBS Manufacturing PMI in China fell further, to 49.2 in April (from 51.9 in March), missing market estimates of 51.4. The Caixin China Manufacturing PMI also fell, to 49.5 in April (from 50.0), missing market forecasts of 50.3
❗️The manufacturing sector is facing a contraction globally, as indicated by PMIs below 50.0. The unexpected sharp falls in the EU and China might negatively affect the demand for industrial metals. Nevertheless, we reiterate our view that demand for industrial metals in 2023 is likely to be bolstered by China's ongoing post-covid recovery and its plans for massive infrastructure projects
#PMIs
https://metals-wire.com:3000/news-reports
🌏Global manufacturing PMIs showed negative dynamics in April. The Eurozone Markit Manufacturing PMI fell to 45.8 (consensus estimate - 45.5) from 47.3 in March, its lowest point since May 2020. The US ISM manufacturing PMI, however, rose to 47.1 (from the recent three-year low of 46.3)
🇨🇳 The official NBS Manufacturing PMI in China fell further, to 49.2 in April (from 51.9 in March), missing market estimates of 51.4. The Caixin China Manufacturing PMI also fell, to 49.5 in April (from 50.0), missing market forecasts of 50.3
❗️The manufacturing sector is facing a contraction globally, as indicated by PMIs below 50.0. The unexpected sharp falls in the EU and China might negatively affect the demand for industrial metals. Nevertheless, we reiterate our view that demand for industrial metals in 2023 is likely to be bolstered by China's ongoing post-covid recovery and its plans for massive infrastructure projects
#PMIs
https://metals-wire.com:3000/news-reports
ArcelorMittal 1Q23 results - EBITDA beats consensus
✏️ArcelorMittal's 1Q23 revenues outperformed the market estimates (+6% vs. the consensus and +14% vs. us), mainly amid better realised prices and sales in the NAFTA segment. Meanwhile, the increase in cash costs was greater than we had expected, which limited the positive effect on EBITDA (+12% vs. the consensus and +8% vs. us)
🏭The steelmaker maintained its
guidance, expecting FY23 steel shipments to grow ~5% YoY. Furthermore, the producer sees ex-China steel demand gaining 2-3% YoY in 2023
💰The company announced a new buyback (up to 85mn shares) through May 2025, implying a yield of some 10.4% through the repurchase period. The BoD also approved an annual base dividend of USD 0.44/sh., implying a 1.6% DY
❗️Overall, at spot, Arcelor’s 2Q23 EBITDA might be materially higher QoQ, supported by the substantial recovery in US/EU steel prices, on our numbers
#MT #steel
https://metals-wire.com:3000/company/MT_US/
✏️ArcelorMittal's 1Q23 revenues outperformed the market estimates (+6% vs. the consensus and +14% vs. us), mainly amid better realised prices and sales in the NAFTA segment. Meanwhile, the increase in cash costs was greater than we had expected, which limited the positive effect on EBITDA (+12% vs. the consensus and +8% vs. us)
🏭The steelmaker maintained its
guidance, expecting FY23 steel shipments to grow ~5% YoY. Furthermore, the producer sees ex-China steel demand gaining 2-3% YoY in 2023
💰The company announced a new buyback (up to 85mn shares) through May 2025, implying a yield of some 10.4% through the repurchase period. The BoD also approved an annual base dividend of USD 0.44/sh., implying a 1.6% DY
❗️Overall, at spot, Arcelor’s 2Q23 EBITDA might be materially higher QoQ, supported by the substantial recovery in US/EU steel prices, on our numbers
#MT #steel
https://metals-wire.com:3000/company/MT_US/
Morning Bites (part 1)
💎US jewellery sales shrank 9% YoY in March, after the revised 7% YoY drop in February, according to the Department of Commerce. This was the biggest monthly fall since early-2020, following the effects of Covid-19. According to IDEX, the dynamics might reflect US clients' concerns about the turbulence in the domestic banking sector. Hence, we reiterate our view that the decline in US jewellery sales (for the sixth consecutive month, except for the <1% growth in January) might keep weighing on the demand for rough diamonds, at least in the near future. We also remind our readers that the US accounts for ~50% of world diamond jewellery sales
#diamonds
https://metals-wire.com/sector/Diamonds
💎US jewellery sales shrank 9% YoY in March, after the revised 7% YoY drop in February, according to the Department of Commerce. This was the biggest monthly fall since early-2020, following the effects of Covid-19. According to IDEX, the dynamics might reflect US clients' concerns about the turbulence in the domestic banking sector. Hence, we reiterate our view that the decline in US jewellery sales (for the sixth consecutive month, except for the <1% growth in January) might keep weighing on the demand for rough diamonds, at least in the near future. We also remind our readers that the US accounts for ~50% of world diamond jewellery sales
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
💍Hong Kong jewellery and watch sales surged 165% YoY in March, following the 129% YoY growth in February. According to government data, monthly sales in March reached their highest since January 2020. In addition to the low base effect from Covid-19 restrictions (e.g. Hong Kong’s border with the Mainland was only reopened in February 2023), the robust recovery was also driven by improved consumer sentiment. In our view, this might slightly support demand, though the impact is limited
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales surged 165% YoY in March, following the 129% YoY growth in February. According to government data, monthly sales in March reached their highest since January 2020. In addition to the low base effect from Covid-19 restrictions (e.g. Hong Kong’s border with the Mainland was only reopened in February 2023), the robust recovery was also driven by improved consumer sentiment. In our view, this might slightly support demand, though the impact is limited
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
☢Cameco increased its uranium production and sales in 1Q23, per the company’s published quarterly financials. The Canadian mining company supplied 3.7Ukt of uranium (+64% YoY); output was 1.7Ukt (+2.4x YoY), mostly supported by the resumption of operations at the McArthur River mine in November (after a four-year shutdown). In particular, the total uranium output of Canadian mines was 2.8Ukt in 1Q23. Cameco plans to extract 12.6Ukt (at 100% basis) from its Cigar Lake and McArthur River mines in FY23. Overall, this might add some stress to global uranium prices, as McArthur River’s potential output represents ~10% of our forecasted 2023F global total. As a result, Canada's share of world uranium primary production would increase from 15% in 2022E to 21% in 2023F, on our estimates
#uranium
https://metals-wire.com/sector/Uranium
☢Cameco increased its uranium production and sales in 1Q23, per the company’s published quarterly financials. The Canadian mining company supplied 3.7Ukt of uranium (+64% YoY); output was 1.7Ukt (+2.4x YoY), mostly supported by the resumption of operations at the McArthur River mine in November (after a four-year shutdown). In particular, the total uranium output of Canadian mines was 2.8Ukt in 1Q23. Cameco plans to extract 12.6Ukt (at 100% basis) from its Cigar Lake and McArthur River mines in FY23. Overall, this might add some stress to global uranium prices, as McArthur River’s potential output represents ~10% of our forecasted 2023F global total. As a result, Canada's share of world uranium primary production would increase from 15% in 2022E to 21% in 2023F, on our estimates
#uranium
https://metals-wire.com/sector/Uranium
Week ahead data releases in M&M
As the reporting season continues, several M&M names are to report their earnings. For the gold miners publishing this week (Pan American, Torex and I Am Gold), our EBITDA forecast is roughly in line with the consensus
#reporting_season
https://metals-wire.com:3000/events
As the reporting season continues, several M&M names are to report their earnings. For the gold miners publishing this week (Pan American, Torex and I Am Gold), our EBITDA forecast is roughly in line with the consensus
#reporting_season
https://metals-wire.com:3000/events
🗞Yesterday, China published its preliminary import/export statistics for April (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)
🔗China’s finished steel net exports jumped 83% YoY in April, in line with the 83% YoY growth in March. Overall, during the last month, average daily steel production stayed roughly flat vs. the 2022 levels, while inventories shrank, on a YoY basis. Meanwhile, China’s strong liquidity inflows, as well as plans to construct massive infrustructure projects this year, might bolster domestic construction activity and, hence, the steel demand in 2023
🪨China’s coal imports surged 73% YoY in April (vs. the 2.5x YoY growth in March). According to Economic Times, the dynamics were affected by increased industrial demand for coal after the easing of local Covid-19 restrictions, and the recently lifted ban on Australia's shipments
#coal #steel
https://metals-wire.com:3000/news-reports
🔗China’s finished steel net exports jumped 83% YoY in April, in line with the 83% YoY growth in March. Overall, during the last month, average daily steel production stayed roughly flat vs. the 2022 levels, while inventories shrank, on a YoY basis. Meanwhile, China’s strong liquidity inflows, as well as plans to construct massive infrustructure projects this year, might bolster domestic construction activity and, hence, the steel demand in 2023
🪨China’s coal imports surged 73% YoY in April (vs. the 2.5x YoY growth in March). According to Economic Times, the dynamics were affected by increased industrial demand for coal after the easing of local Covid-19 restrictions, and the recently lifted ban on Australia's shipments
#coal #steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🔗CISA mills' daily crude steel production decreased 3.5% to 2.21mnt in late-April from mid-April (a YoY drop of 6.3%). Meanwhile, local steel inventories fell 2.3% over the same period (flat YoY). The figures likely reflect the CISA’s call to cut production amid low domestic steel prices. Furthermore, according to SteelOrbis, some mills in Tangshan (~13% of China’s steel output) have received an official municipal notice to keep their 2023 crude steel production no higher than the 2022 level. Overall, the news is in line with the recent indications and is likely to bolster local steel prices
#steel
https://metals-wire.com:3000/sector/Steel
🔗CISA mills' daily crude steel production decreased 3.5% to 2.21mnt in late-April from mid-April (a YoY drop of 6.3%). Meanwhile, local steel inventories fell 2.3% over the same period (flat YoY). The figures likely reflect the CISA’s call to cut production amid low domestic steel prices. Furthermore, according to SteelOrbis, some mills in Tangshan (~13% of China’s steel output) have received an official municipal notice to keep their 2023 crude steel production no higher than the 2022 level. Overall, the news is in line with the recent indications and is likely to bolster local steel prices
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 3)
🏆Global physical gold demand grew 15% YoY to 1,109t in 1Q23, after the 25% YoY increase in 4Q22, according to the World Gold Council (WGC). Meanwhile, total global gold demand was down 13% YoY (vs. +19% YoY in 4Q22), mainly affected by the outflows from ETFs (their sales are still the main factor affecting the precious metal’s performance). Separately, we note that central bank purchases last quarter jumped 2.8x YoY (vs. >10x YoY growth in 4Q22) and were the highest Q1 figures since 2000. However, the demand for gold jewellery was roughly flat (-2% YoY) in 1Q23 (vs. -13% YoY in 4Q22). At the same time, gold mine production grew ~2% YoY in 1Q23, reversing from the 1% YoY drop in 4Q22
#gold
https://metals-wire.com/sector/Gold
🏆Global physical gold demand grew 15% YoY to 1,109t in 1Q23, after the 25% YoY increase in 4Q22, according to the World Gold Council (WGC). Meanwhile, total global gold demand was down 13% YoY (vs. +19% YoY in 4Q22), mainly affected by the outflows from ETFs (their sales are still the main factor affecting the precious metal’s performance). Separately, we note that central bank purchases last quarter jumped 2.8x YoY (vs. >10x YoY growth in 4Q22) and were the highest Q1 figures since 2000. However, the demand for gold jewellery was roughly flat (-2% YoY) in 1Q23 (vs. -13% YoY in 4Q22). At the same time, gold mine production grew ~2% YoY in 1Q23, reversing from the 1% YoY drop in 4Q22
#gold
https://metals-wire.com/sector/Gold
Kinross 1Q23 results - EBITDA outperforms
📝Kinross’s 1Q23 revenues were roughly flat YoY, but were slightly ahead of market expectations (+6% vs. the consensus and +1% vs. us). Meanwhile, cash costs growth was weaker than we had anticipated, which amplified the positive effect on EBITDA (+18% vs. consensus, and +23% vs. us)
💵In 1Q23, the company's AISC grew 6% YoY (+7% QoQ) to USD 1,321/oz of gold equivalent. Kinross is therefore on track to meet its FY23 AISC guidance of USD 1,320/oz
⛏The gold miner has also reiterated its FY23 production outlook of 2.1mnoz of gold equivalent (+7% YoY), driven by higher output from its Tasiast and La Coipa mines
💰The BoD has declared quarterly dividends of USD 0.03/sh., which implies a DY of some 0.5%, in line with the dividend programme
❗️On our numbers, Kinross's 2Q23F adjusted EBITDA will grow moderately QoQ amid higher spot gold prices (+7% vs. the 1Q23 average) and potentially greater sales volumes
#K_CN #gold
https://metals-wire.com:3000/company/K_CN/
📝Kinross’s 1Q23 revenues were roughly flat YoY, but were slightly ahead of market expectations (+6% vs. the consensus and +1% vs. us). Meanwhile, cash costs growth was weaker than we had anticipated, which amplified the positive effect on EBITDA (+18% vs. consensus, and +23% vs. us)
💵In 1Q23, the company's AISC grew 6% YoY (+7% QoQ) to USD 1,321/oz of gold equivalent. Kinross is therefore on track to meet its FY23 AISC guidance of USD 1,320/oz
⛏The gold miner has also reiterated its FY23 production outlook of 2.1mnoz of gold equivalent (+7% YoY), driven by higher output from its Tasiast and La Coipa mines
💰The BoD has declared quarterly dividends of USD 0.03/sh., which implies a DY of some 0.5%, in line with the dividend programme
❗️On our numbers, Kinross's 2Q23F adjusted EBITDA will grow moderately QoQ amid higher spot gold prices (+7% vs. the 1Q23 average) and potentially greater sales volumes
#K_CN #gold
https://metals-wire.com:3000/company/K_CN/
Morning Bites (part 1)
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 16% YoY in April, according to the preliminary data. Nevertheless, the figure was still 28% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 35% and 37%, respectively, vs. 2019, while sales in France were 30% lower. Moreover, sales in the UK and Italy were 17% and 28% less than in 2019, respectively. Given that these 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
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 16% YoY in April, according to the preliminary data. Nevertheless, the figure was still 28% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 35% and 37%, respectively, vs. 2019, while sales in France were 30% lower. Moreover, sales in the UK and Italy were 17% and 28% less than in 2019, respectively. Given that these 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 2)
🏗China’s excavator sales decreased 23% YoY in April (domestic + export), after the 31% YoY drop in March. We note that the decline was slightly softer than the previous SteelOrbis estimate. Domestic excavator sales dropped 41% YoY, vs. the 48% YoY fall in March. One of the main indicators of construction activity, excavator sales are still trending downward, as they have been since May 2021. Although the dynamics indicate a continuous stagnation in the local real estate sector, strong liquidity inflows, together with China's plan for massive infrastructure projects, might boost the demand for industrial metals (e.g. steel, aluminium and copper) later in 2023, in our view
#steel
https://metals-wire.com/sector/Steel
🏗China’s excavator sales decreased 23% YoY in April (domestic + export), after the 31% YoY drop in March. We note that the decline was slightly softer than the previous SteelOrbis estimate. Domestic excavator sales dropped 41% YoY, vs. the 48% YoY fall in March. One of the main indicators of construction activity, excavator sales are still trending downward, as they have been since May 2021. Although the dynamics indicate a continuous stagnation in the local real estate sector, strong liquidity inflows, together with China's plan for massive infrastructure projects, might boost the demand for industrial metals (e.g. steel, aluminium and copper) later in 2023, in our view
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 3)
📈Gold-backed ETFs increased their holdings 15t in April, decelerating from the 32t gain in March. According to the World Gold Council, during last month, all regions faced gold ETF inflows, expect for the EU (-0.7t). Overall, we consider the resumption of ETF purchases, along with the steady YoY growth in physical gold demand (especially from the CBs) in 1Q23 and the worsening macroeconomic conditions, to be further supportive factors for our bullish view on the precious metal's performance
#ETF #gold
https://metals-wire.com:3000/news-reports
📈Gold-backed ETFs increased their holdings 15t in April, decelerating from the 32t gain in March. According to the World Gold Council, during last month, all regions faced gold ETF inflows, expect for the EU (-0.7t). Overall, we consider the resumption of ETF purchases, along with the steady YoY growth in physical gold demand (especially from the CBs) in 1Q23 and the worsening macroeconomic conditions, to be further supportive factors for our bullish view on the precious metal's performance
#ETF #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🇿🇦South Africa’s PGM mining output fell 9% YoY in March, after the revised 3% YoY growth in February, affected by the ongoing domestic energy crisis and logistical issues. Meanwhile, the country’s gold production jumped 22% YoY, accelerating from the 2% YoY growth in February. To recap, South Africa accounts for ~70% of global platinum, 38% of palladium supply and 3% of global gold production. Despite the declining PGMs output, weak demand from the automotive sector might offset the favourable effect on prices. Regarding the sharp growth in gold production, this could have been partially driven by the low base effect from 2022, and likely will not affect the sentiment on gold, due to continuously strong demand, we think
#PGMs #gold
https://metals-wire.com:3000/news-reports
🇿🇦South Africa’s PGM mining output fell 9% YoY in March, after the revised 3% YoY growth in February, affected by the ongoing domestic energy crisis and logistical issues. Meanwhile, the country’s gold production jumped 22% YoY, accelerating from the 2% YoY growth in February. To recap, South Africa accounts for ~70% of global platinum, 38% of palladium supply and 3% of global gold production. Despite the declining PGMs output, weak demand from the automotive sector might offset the favourable effect on prices. Regarding the sharp growth in gold production, this could have been partially driven by the low base effect from 2022, and likely will not affect the sentiment on gold, due to continuously strong demand, we think
#PGMs #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
📌China’s new internal combustion engine car sales surged 72% YoY in April, from a low base. Overall, the performance is still below the pre-Covid level (-19% vs. April 2019) which, along with the growing appetite for EVs, keeps weighing on the demand for PGMs. We note that the Chinese auto sector accounts for some 26% and 17% of world autocatalyst Pd and Pt demand, respectively
📌New EV sales in China skyrocketed 113% YoY in April, after the 35% YoY growth in March. However, this was mostly due the low base of 2022 (April sales shrank 3% MoM). In our view, further growth in EV sales is set to drive up the consumption of the battery metals basket (e.g. cobalt, lithium and nickel), as China has accounted for ~50% of global EV demand in recent months
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
📌China’s new internal combustion engine car sales surged 72% YoY in April, from a low base. Overall, the performance is still below the pre-Covid level (-19% vs. April 2019) which, along with the growing appetite for EVs, keeps weighing on the demand for PGMs. We note that the Chinese auto sector accounts for some 26% and 17% of world autocatalyst Pd and Pt demand, respectively
📌New EV sales in China skyrocketed 113% YoY in April, after the 35% YoY growth in March. However, this was mostly due the low base of 2022 (April sales shrank 3% MoM). In our view, further growth in EV sales is set to drive up the consumption of the battery metals basket (e.g. cobalt, lithium and nickel), as China has accounted for ~50% of global EV demand in recent months
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
🇨🇳China launched 1.1mnt of aluminium capacity in April, including 212kt of newly added production, according to Shanghai Metals Market (SMM). On our numbers, the figure is equivalent to ~1.5% of world Al supply in 2023F, so this might have been weighing on the metal’s price in recent months. To recap, after the severe power shortages in 2021, Yunnan smelters were again forced to reduce Al production in late-2022 because of similar issues. Meanwhile, according to SMM, once the dry season is over and power supply shortages have been resolved, local smelters might resume another 2.6mnt of Al capacity and launch some 1.6mnt of new volumes (together representing ~6.0% of global Al output). Hence, were these risks to materialise, aluminium prices globally might be pressured, though achieving such outlook seems overly ambitious to us
#aluminium
https://metals-wire.com:3000/sector/Aluminium
🇨🇳China launched 1.1mnt of aluminium capacity in April, including 212kt of newly added production, according to Shanghai Metals Market (SMM). On our numbers, the figure is equivalent to ~1.5% of world Al supply in 2023F, so this might have been weighing on the metal’s price in recent months. To recap, after the severe power shortages in 2021, Yunnan smelters were again forced to reduce Al production in late-2022 because of similar issues. Meanwhile, according to SMM, once the dry season is over and power supply shortages have been resolved, local smelters might resume another 2.6mnt of Al capacity and launch some 1.6mnt of new volumes (together representing ~6.0% of global Al output). Hence, were these risks to materialise, aluminium prices globally might be pressured, though achieving such outlook seems overly ambitious to us
#aluminium
https://metals-wire.com:3000/sector/Aluminium