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
Week ahead data releases in M&M
As the reporting season draws to a close, only SQM (among major miners under our coverage) is scheduled to report earnings this week. We also expect some market-moving industry data in the coming days
#reporting_season
https://metals-wire.com:3000/events
As the reporting season draws to a close, only SQM (among major miners under our coverage) is scheduled to report earnings this week. We also expect some market-moving industry data in the coming days
#reporting_season
https://metals-wire.com:3000/events
Morning Bites (part 1)
🚘US light vehicle sales were up 9% YoY in April, in line with the 9% YoY growth in March (also 1% above the pre-Covid 2019 level). Seasonally adjusted sales volumes increased 10% YoY in April (vs. +9% YoY in March, and -3% vs. 2019). Meanwhile, market participants admit that sales remain stressed by overall deteriorating car affordability amid infaltionary pressures. Hence, we believe that inflated car prices and growing US interest rates might keep the local automotive demand for PGMs subdued in 2023
#cars
https://metals-wire.com:3000/news-reports
🚘US light vehicle sales were up 9% YoY in April, in line with the 9% YoY growth in March (also 1% above the pre-Covid 2019 level). Seasonally adjusted sales volumes increased 10% YoY in April (vs. +9% YoY in March, and -3% vs. 2019). Meanwhile, market participants admit that sales remain stressed by overall deteriorating car affordability amid infaltionary pressures. Hence, we believe that inflated car prices and growing US interest rates might keep the local automotive demand for PGMs subdued in 2023
#cars
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🏦China’s aggregate financing grew 31% YoY in April to CNY 1.22tn from a low base. However, this figure was 39% below the consensus. At the same time, traditional bank loans gained 11% YoY, also missing the consensus by ~50%, and hitting 6-month lows. China’s economic growth has stumbled in the last month, as indicated by rather soft PMIs data. However, strong liquidity inflows in early-2023 and massive infrastructure projects might trigger a recovery in domestic construction activity, supporting demand for industrial metals. China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#global
https://metals-wire.com:3000/news-reports
🏦China’s aggregate financing grew 31% YoY in April to CNY 1.22tn from a low base. However, this figure was 39% below the consensus. At the same time, traditional bank loans gained 11% YoY, also missing the consensus by ~50%, and hitting 6-month lows. China’s economic growth has stumbled in the last month, as indicated by rather soft PMIs data. However, strong liquidity inflows in early-2023 and massive infrastructure projects might trigger a recovery in domestic construction activity, supporting demand for industrial metals. China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#global
https://metals-wire.com:3000/news-reports
🗞Today, China has published its industrial production data for April (see table above)
#statistics #China
https://metals-wire.com:3000/news-reports
#statistics #China
https://metals-wire.com:3000/news-reports
👍3
Morning Bites (part 1)
🔗China’s crude steel output fell 2% YoY in April, following the 7% YoY growth in March. The decrease in output comes in line with the government's plan to limit production, as well as the similar call from the CISA. Hence, further production cuts (China represents ~58% of global crude steel supply), were they to materialise, might support local steel prices
🏢China's property sales were down 17%YoY in April (vs. flat YoY in March), and 46% below the historical highs of 2021. The decline in floor space starts was 28% YoY last month, in line with the 29% YoY drop in March. However, personal mortgage loans jumped 22% YoY (vs. +20% YoY in March), while property completions also grew 37% YoY in April (vs. +31% YoY). Despite some ongoing uncertainty in China’s real estate segment, the strong liquidity injections data in early 2023 might trigger a recovery in construction activity later this year
#steel #property
https://metals-wire.com:3000/sector/Steel
🔗China’s crude steel output fell 2% YoY in April, following the 7% YoY growth in March. The decrease in output comes in line with the government's plan to limit production, as well as the similar call from the CISA. Hence, further production cuts (China represents ~58% of global crude steel supply), were they to materialise, might support local steel prices
🏢China's property sales were down 17%YoY in April (vs. flat YoY in March), and 46% below the historical highs of 2021. The decline in floor space starts was 28% YoY last month, in line with the 29% YoY drop in March. However, personal mortgage loans jumped 22% YoY (vs. +20% YoY in March), while property completions also grew 37% YoY in April (vs. +31% YoY). Despite some ongoing uncertainty in China’s real estate segment, the strong liquidity injections data in early 2023 might trigger a recovery in construction activity later this year
#steel #property
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 2)
🔗CISA mills daily crude steel production during early May was 2.25mnt, a 2.0% increase from the previous ten days (but a YoY drop of 2.4%). Meanwhile, local steel inventories declined 2.8% over the same period (-6% YoY). We also remind our readers of CISA’s recent call to cut production amid low domestic steel prices: some Tangshan mills (~13% of China’s steel output) have already received a municipal notice not to exceed the 2022 production level. Hence, we reiterate our view that such restrictions are likely to be favorable for domestic steel prices
#steel
https://metals-wire.com:3000/sector/Steel
🔗CISA mills daily crude steel production during early May was 2.25mnt, a 2.0% increase from the previous ten days (but a YoY drop of 2.4%). Meanwhile, local steel inventories declined 2.8% over the same period (-6% YoY). We also remind our readers of CISA’s recent call to cut production amid low domestic steel prices: some Tangshan mills (~13% of China’s steel output) have already received a municipal notice not to exceed the 2022 production level. Hence, we reiterate our view that such restrictions are likely to be favorable for domestic steel prices
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 3)
📌Johnson Matthey expects slight deficit on Pd and Pt markets in 2023
🚗JM expects the auto industry's demand for PGMs to see only marginal gains in 2023, as battery EVs keep capturing all the growth in the light duty sector. Meanwhile, gasoline car output in China is set to fall ~5% YoY in 2023, amid the growing popularity of EVs locally. To recap, the Chinese auto sector accounts for some 26% and 17% of world autocatalyst Pd and Pt demand, respectively
📊We note that JM sees the trend for platinum-for-palladium substitution continuing in 2023. As a result, the share of Pd in automotive PGM demand might shrink to 77% (from 83% in 2020)
⛏On the supply side, according to JM, the only supportive factor for PGM prices is subdued South African shipments (70% and 38% of world Pt and Pd supply, respectively), that were hit by electricity outages and difficult operating conditions
#PGMs
https://metals-wire.com:3000/sector/PGM
📌Johnson Matthey expects slight deficit on Pd and Pt markets in 2023
🚗JM expects the auto industry's demand for PGMs to see only marginal gains in 2023, as battery EVs keep capturing all the growth in the light duty sector. Meanwhile, gasoline car output in China is set to fall ~5% YoY in 2023, amid the growing popularity of EVs locally. To recap, the Chinese auto sector accounts for some 26% and 17% of world autocatalyst Pd and Pt demand, respectively
📊We note that JM sees the trend for platinum-for-palladium substitution continuing in 2023. As a result, the share of Pd in automotive PGM demand might shrink to 77% (from 83% in 2020)
⛏On the supply side, according to JM, the only supportive factor for PGM prices is subdued South African shipments (70% and 38% of world Pt and Pd supply, respectively), that were hit by electricity outages and difficult operating conditions
#PGMs
https://metals-wire.com:3000/sector/PGM
Morning Bites (part 1)
💎De Beers has reported sales of USD 480mn at its 4th cycle in 2023, 10% lower than the historical average and a 21% YoY drop (vs. -5% YoY at the third cycle in 2023). According to De Beers' Chief Executive, Al Cook, rough diamond demand was affected by current macroeconomic uncertainty and a weaker than anticipated consumer demand recovery in China
❗Importantly, according to IDEX, De Beers has postponed its auctions (generally ~10% of its rough sales) during Cycle 5 and 6 amid weak demand from Indian cutters and a consumer slowdown in the US and China. Hence, we maintain our view that unfavorable economic conditions globally, and continuously weak US jewellery sales (50% of world demand), are continuing to stress the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 480mn at its 4th cycle in 2023, 10% lower than the historical average and a 21% YoY drop (vs. -5% YoY at the third cycle in 2023). According to De Beers' Chief Executive, Al Cook, rough diamond demand was affected by current macroeconomic uncertainty and a weaker than anticipated consumer demand recovery in China
❗Importantly, according to IDEX, De Beers has postponed its auctions (generally ~10% of its rough sales) during Cycle 5 and 6 amid weak demand from Indian cutters and a consumer slowdown in the US and China. Hence, we maintain our view that unfavorable economic conditions globally, and continuously weak US jewellery sales (50% of world demand), are continuing to stress the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds