Morning Bites (part 1)
🇵🇪Peru’s copper output grew 2% YoY in September, decelerating from the +7% YoY in August and +18% YoY in July, according to the INEI data. Overall, in 9mo23, local production was up ~15% YoY, which is in line with the Peruvian government's ambitious plan to boost domestic Cu output in 2023. Meanwhile, the joint production of Chile and Peru (~38% of global Cu supply) was up only 3% YoY in September. Despite the country's strong YTD production dynamics, the comparison base for rest of the year might be higher, as Anglo American launched the Quellaveco copper mine in September 2022. To recap, Peru accounts for ~11% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
🇵🇪Peru’s copper output grew 2% YoY in September, decelerating from the +7% YoY in August and +18% YoY in July, according to the INEI data. Overall, in 9mo23, local production was up ~15% YoY, which is in line with the Peruvian government's ambitious plan to boost domestic Cu output in 2023. Meanwhile, the joint production of Chile and Peru (~38% of global Cu supply) was up only 3% YoY in September. Despite the country's strong YTD production dynamics, the comparison base for rest of the year might be higher, as Anglo American launched the Quellaveco copper mine in September 2022. To recap, Peru accounts for ~11% of global Cu supply
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 2)
💎Rough diamond prices recovered 5-10% at small auctions in early-November, for the first time since February 2023, as shortages of some stones start to emerge, Bloomberg reports. Noteworthy, polished diamond prices have plunged ~20% this year, triggering a ~35% fall in rough diamond prices at some auctions, with the steepest declines seen in late-summer and early-autumn, per Bloomberg. Overall, the news reflects the supply discipline measures recently taken by De Beers and Alrosa (which jointly accounted for ~60% of global rough diamonds output in 2022), following sluggish consumer demand and high mid-stream stockpiles. Although the indication is favourable for the sentiment, we keep our cautious view on the diamond sector globally and await the results for larger tenders, although they are unlikely to be released in the near future, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💎Rough diamond prices recovered 5-10% at small auctions in early-November, for the first time since February 2023, as shortages of some stones start to emerge, Bloomberg reports. Noteworthy, polished diamond prices have plunged ~20% this year, triggering a ~35% fall in rough diamond prices at some auctions, with the steepest declines seen in late-summer and early-autumn, per Bloomberg. Overall, the news reflects the supply discipline measures recently taken by De Beers and Alrosa (which jointly accounted for ~60% of global rough diamonds output in 2022), following sluggish consumer demand and high mid-stream stockpiles. Although the indication is favourable for the sentiment, we keep our cautious view on the diamond sector globally and await the results for larger tenders, although they are unlikely to be released in the near future, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
🗓3Q23 reporting season highlights
📝 The weighted average 3Q23 EBITDA of global miners under our coverage was broadly in-line with market expectations (+1.2% vs. the consensus and +0.5% vs. us). Overall, these dynamics were driven by nascent costs normalisation in the M&M sector
📈 The strongest results were reported mainly by copper miners (e.g. First Quantum), as their cost efficiency recovered faster than we had expected
#reporting_season
https://metals-wire.com:3000/events
📝 The weighted average 3Q23 EBITDA of global miners under our coverage was broadly in-line with market expectations (+1.2% vs. the consensus and +0.5% vs. us). Overall, these dynamics were driven by nascent costs normalisation in the M&M sector
📈 The strongest results were reported mainly by copper miners (e.g. First Quantum), as their cost efficiency recovered faster than we had expected
#reporting_season
https://metals-wire.com:3000/events
🗓3Q23 reporting season - cost normalisation
📊On average, major miners reported materially weaker revenues than we had anticipated (-9% vs. us), amid various operational challenges
📉However, cash costs started to normalise, reversing from the abnormal increase in 1H23. Consequently, lower costs have offset the negative effects from revenue, resulting in company EBITDA that roughly met our estimates. As mentioned in the previous post, weighted average EBITDA came in 1.2% and 0.5% ahead of the consensus and us, respectively
📍Although high interest rates and the ongoing stagnation in global PMIs limit commodities performance, miners' cash costs (especially of gold producers) remain elevated, suggesting upside potential
#reporting_season
https://metals-wire.com:3000/events
📊On average, major miners reported materially weaker revenues than we had anticipated (-9% vs. us), amid various operational challenges
📉However, cash costs started to normalise, reversing from the abnormal increase in 1H23. Consequently, lower costs have offset the negative effects from revenue, resulting in company EBITDA that roughly met our estimates. As mentioned in the previous post, weighted average EBITDA came in 1.2% and 0.5% ahead of the consensus and us, respectively
📍Although high interest rates and the ongoing stagnation in global PMIs limit commodities performance, miners' cash costs (especially of gold producers) remain elevated, suggesting upside potential
#reporting_season
https://metals-wire.com:3000/events
Morning Bites (part 1)
🏦China’s aggregate financing jumped 103% YoY in October to CNY 1.85tn from the low base of 2022 (vs. +16% YoY in September) - slightly below the consensus estimates of CNY 1.90tn. Meanwhile, traditional bank loans also grew: they were up 20% YoY (vs. -7% YoY in September), coming 11% above the consensus. According to Reuters, Beijing is set to provide new fiscal stimulus to bolster the country’s economic recovery, as the headwinds persist (which is also indicated by China’s surprisingly low 49.5 PMIs in October). This, combined with the recently announced support measures aimed at infrastructure investment, might bolster local construction activity and, hence, China’s demand for industrial metals in 4Q23-2024
We remind readers that 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 jumped 103% YoY in October to CNY 1.85tn from the low base of 2022 (vs. +16% YoY in September) - slightly below the consensus estimates of CNY 1.90tn. Meanwhile, traditional bank loans also grew: they were up 20% YoY (vs. -7% YoY in September), coming 11% above the consensus. According to Reuters, Beijing is set to provide new fiscal stimulus to bolster the country’s economic recovery, as the headwinds persist (which is also indicated by China’s surprisingly low 49.5 PMIs in October). This, combined with the recently announced support measures aimed at infrastructure investment, might bolster local construction activity and, hence, China’s demand for industrial metals in 4Q23-2024
We remind readers that 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
Morning Bites (part 2)
🇵🇦Cobre Panama has reduced its processing operations, amid protests against the project, that have blocked the mine's Punta Rincon port access, according to a First Quantum press release. Specifically, the delivery of supplies for Cobre Panama's on-site power generation plant had been affected. As a result, one of the three processing trains was ramped down. This might be a supportive factor for copper prices, if the operational issues at the site persist, we believe. To recap, Cobre Panama accounts for ~2% of global copper output, while 60% of Punta Rincon's copper concentrate export is destined for China
#copper
https://metals-wire.com/sector/Copper
🇵🇦Cobre Panama has reduced its processing operations, amid protests against the project, that have blocked the mine's Punta Rincon port access, according to a First Quantum press release. Specifically, the delivery of supplies for Cobre Panama's on-site power generation plant had been affected. As a result, one of the three processing trains was ramped down. This might be a supportive factor for copper prices, if the operational issues at the site persist, we believe. To recap, Cobre Panama accounts for ~2% of global copper output, while 60% of Punta Rincon's copper concentrate export is destined for China
#copper
https://metals-wire.com/sector/Copper
🗞Today, China has published its industrial production data for October (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 crude steel output was down 2% YoY in October, after the -6% YoY in September. According to Reuters, more local mills started furnace maintenance amid low margins and soft demand. Meanwhile, the figure was still +1.4% YoY in 10mo23: despite recent production cuts, Beijing’s stated plan to keep output below 2022 levels looks rather ambitious to us, and there might be a slight increase YoY. China represents ~57% of global crude steel supply
🏢China's property sales dropped 20% YoY in October (in line with September), being 52% below the levels of 2020. Floor space starts shrank 21% YoY last month (-15% YoY in September), while personal mortgage loans were also down 16% YoY (-27% YoY in September). However, property completions grew 13% YoY in October. Despite the stagnation in China’s real estate sector, new economic stimulus, aimed at infrastructure projects, might bolster local construction activity in 4Q23-2024
#steel #property
https://metals-wire.com:3000/sector/Steel
🔗China’s crude steel output was down 2% YoY in October, after the -6% YoY in September. According to Reuters, more local mills started furnace maintenance amid low margins and soft demand. Meanwhile, the figure was still +1.4% YoY in 10mo23: despite recent production cuts, Beijing’s stated plan to keep output below 2022 levels looks rather ambitious to us, and there might be a slight increase YoY. China represents ~57% of global crude steel supply
🏢China's property sales dropped 20% YoY in October (in line with September), being 52% below the levels of 2020. Floor space starts shrank 21% YoY last month (-15% YoY in September), while personal mortgage loans were also down 16% YoY (-27% YoY in September). However, property completions grew 13% YoY in October. Despite the stagnation in China’s real estate sector, new economic stimulus, aimed at infrastructure projects, might bolster local construction activity in 4Q23-2024
#steel #property
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 2)
📌China’s new internal combustion engine car sales grew 6% YoY in October, after the 3% YoY gain in September. However, the numbers were still well below their pre-Covid level (-14% vs. October 2019), amid the strong appetite for EVs, which continues to weigh on PGM consumption. ICE car sales remained roughly flat YoY in 10mo23 (-15% vs. 10mo19). To recap, the Chinese auto sector represents some 26% and 17% of the global autocatalyst Pd and Pt demand, respectively
📌New EV sales in China surged 34% YoY in October, following the 28% YoY increase in September. Meanwhile, for 10mo23, sales rose 37% YoY. Overall, the continuous growth in EV sales might further support the consumption of the battery metals basket (i. e. cobalt, lithium and nickel), as China has represented ~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 grew 6% YoY in October, after the 3% YoY gain in September. However, the numbers were still well below their pre-Covid level (-14% vs. October 2019), amid the strong appetite for EVs, which continues to weigh on PGM consumption. ICE car sales remained roughly flat YoY in 10mo23 (-15% vs. 10mo19). To recap, the Chinese auto sector represents some 26% and 17% of the global autocatalyst Pd and Pt demand, respectively
📌New EV sales in China surged 34% YoY in October, following the 28% YoY increase in September. Meanwhile, for 10mo23, sales rose 37% YoY. Overall, the continuous growth in EV sales might further support the consumption of the battery metals basket (i. e. cobalt, lithium and nickel), as China has represented ~50% of global EV demand in recent months
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
Morning Bites
💎India’s rough diamond net imports grew 12% YoY in October, from the low base of 2022 (vs. -33% in September). Meanwhile, India’s polished diamond net exports dropped 41% YoY, accelerating from the 25% YoY decline in September. Synthetic rough diamond net imports surged 72% YoY (mostly due to the near-record low volumes a year ago), after the -21% YoY in September. As such, the share of lab-grown net rough imports in diamond trading remained flat at 8% in October. We also remind readers that India (~95% of world polished stone supply) suspended rough imports for 2 months, starting in mid-October, due to the weak market environment and excessive midstream inventories. Overall, we maintain our cautious view on the diamond sector, which we see as likely to remain stressed by the adverse macroeconomic conditions globally, at least in the short term
#diamonds
https://metals-wire.com/sector/Diamonds
💎India’s rough diamond net imports grew 12% YoY in October, from the low base of 2022 (vs. -33% in September). Meanwhile, India’s polished diamond net exports dropped 41% YoY, accelerating from the 25% YoY decline in September. Synthetic rough diamond net imports surged 72% YoY (mostly due to the near-record low volumes a year ago), after the -21% YoY in September. As such, the share of lab-grown net rough imports in diamond trading remained flat at 8% in October. We also remind readers that India (~95% of world polished stone supply) suspended rough imports for 2 months, starting in mid-October, due to the weak market environment and excessive midstream inventories. Overall, we maintain our cautious view on the diamond sector, which we see as likely to remain stressed by the adverse macroeconomic conditions globally, at least in the short term
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🔗CISA mills' daily crude steel production during early November was 1.97mnt, growth of 2.4% from the previous ten days, but -0.8% YoY. At the same time, local steel inventories gained 6.7% (-12.2% YoY). Overall, output was still up 1.4% YoY in 10mo23: despite recent production cuts, Beijing’s plan to keep national steel output below its 2022 levels looks rather ambitious to us, and there might be a slight increase YoY, we estimate
🏗China is set to inject USD 137bn to support the new housing market, Bloomberg reports. The People’s Bank of China (PBoC) aims to provide low-cost funds to the developers of shantytown renovation projects. Although the measure is unlikely to trigger a substantial recovery in the Chinese property sector, this might bring some long-term support to the demand for industrial metals, we believe. China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during early November was 1.97mnt, growth of 2.4% from the previous ten days, but -0.8% YoY. At the same time, local steel inventories gained 6.7% (-12.2% YoY). Overall, output was still up 1.4% YoY in 10mo23: despite recent production cuts, Beijing’s plan to keep national steel output below its 2022 levels looks rather ambitious to us, and there might be a slight increase YoY, we estimate
🏗China is set to inject USD 137bn to support the new housing market, Bloomberg reports. The People’s Bank of China (PBoC) aims to provide low-cost funds to the developers of shantytown renovation projects. Although the measure is unlikely to trigger a substantial recovery in the Chinese property sector, this might bring some long-term support to the demand for industrial metals, we believe. China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#steel
https://metals-wire.com/sector/Steel
👍2
Morning Bites
🔗Arcelor Mittal has halted operations in Bosnia amid soft demand, Reuters reports. The company’s 1mnt Zenica steel plant, and the mines supplying it with iron ore, are both set to close due to subdued steel demand in Europe and growing costs. Per Arcelor Mittal, labour costs have risen 32% since 2020, given high inflation. Although the plant accounted for less than 1% of European output, news of its closure underpins the trend of weakening demand in the region, we believe. On our numbers, EU apparent steel consumption in 10mo23 was down 3% YoY (and 18% lower than in 10mo21). We also remind readers that Arcelor Mittal reduced its European production 7% YoY in 3Q23, marking the 8th consecutive quarter of declines
#steel #MT
https://metals-wire.com/sector/Steel
🔗Arcelor Mittal has halted operations in Bosnia amid soft demand, Reuters reports. The company’s 1mnt Zenica steel plant, and the mines supplying it with iron ore, are both set to close due to subdued steel demand in Europe and growing costs. Per Arcelor Mittal, labour costs have risen 32% since 2020, given high inflation. Although the plant accounted for less than 1% of European output, news of its closure underpins the trend of weakening demand in the region, we believe. On our numbers, EU apparent steel consumption in 10mo23 was down 3% YoY (and 18% lower than in 10mo21). We also remind readers that Arcelor Mittal reduced its European production 7% YoY in 3Q23, marking the 8th consecutive quarter of declines
#steel #MT
https://metals-wire.com/sector/Steel
Morning Bites
🏭Global primary aluminium output rose 4% YoY in October, in line with the revised 4% YoY growth in September, the International Aluminium Institute reports. Specifically, China’s production jumped 5% YoY, while ex-China production gained 2% YoY. Overall, China (59% of the global Al output in 2022) is ramping-up its production (+3.2% YoY in 10mo23) due to improved power supply in previously drought-hit parts of the country's hydro-electric system. This dynamic approaches previous estimates of the maximum resumption of 1.3mnt of China’s halted Al capacity (~2% of global 2022 output). Meanwhile, we do not expect a more robust production increase in the short-term, given that >50% of global Al suppliers are currently breakeven or loss-making at spot, on our numbers, due to low Al prices
#aluminium
https://metals-wire.com:3000/sector/Aluminium
🏭Global primary aluminium output rose 4% YoY in October, in line with the revised 4% YoY growth in September, the International Aluminium Institute reports. Specifically, China’s production jumped 5% YoY, while ex-China production gained 2% YoY. Overall, China (59% of the global Al output in 2022) is ramping-up its production (+3.2% YoY in 10mo23) due to improved power supply in previously drought-hit parts of the country's hydro-electric system. This dynamic approaches previous estimates of the maximum resumption of 1.3mnt of China’s halted Al capacity (~2% of global 2022 output). Meanwhile, we do not expect a more robust production increase in the short-term, given that >50% of global Al suppliers are currently breakeven or loss-making at spot, on our numbers, due to low Al prices
#aluminium
https://metals-wire.com:3000/sector/Aluminium
Morning Bites
🚘EU + UK passenger car registrations rose 15% YoY in October, after the 12% YoY growth in September. The results roughly met our estimates. However, the sales figures were still 14% below the pre-COVID, 2019 level (-9% in September). To recap, the EU+UK accounted for some 20% and 32% of the world autocatalyst Pd and Pt demand, respectively, in 2022. Overall, given the ongoing inflationary pressures and persistently weak PMI data in the region, we maintain our cautious view on European car sales. We believe that this factor is likely to keep pressuring PGM consumption, at least in the near future
#cars
https://metals-wire.com:3000/sector/PGM
🚘EU + UK passenger car registrations rose 15% YoY in October, after the 12% YoY growth in September. The results roughly met our estimates. However, the sales figures were still 14% below the pre-COVID, 2019 level (-9% in September). To recap, the EU+UK accounted for some 20% and 32% of the world autocatalyst Pd and Pt demand, respectively, in 2022. Overall, given the ongoing inflationary pressures and persistently weak PMI data in the region, we maintain our cautious view on European car sales. We believe that this factor is likely to keep pressuring PGM consumption, at least in the near future
#cars
https://metals-wire.com:3000/sector/PGM
Morning Bites
🔗Global crude steel output inched up 1% YoY to 150mnt in October, after the 2% YoY decline in September, the World Steel Association reports. Meanwhile, China’s production shrank 2% YoY, decelerating from the 6% YoY fall in September, while ex-China steel output was up 3% YoY. Specifically, EU supply dropped 7% YoY (vs. the 1% YoY decline in September), against the backdrop of the local energy crisis. On the other hand, output in India (~7% of global steel supply) surged 15% YoY in October (+12% YoY in 10mo23). US steel production added 3% YoY, while Russia’s output rose 10% YoY, in line with the September dynamics
Beijing’s plan to keep national steel output below 2022 levels looks ambitious to us, given that the figure was still up >1% YoY in 10mo23, despite recent production cuts. China represents ~57% of global crude steel supply
#steel
https://metals-wire.com/sector/Steel
🔗Global crude steel output inched up 1% YoY to 150mnt in October, after the 2% YoY decline in September, the World Steel Association reports. Meanwhile, China’s production shrank 2% YoY, decelerating from the 6% YoY fall in September, while ex-China steel output was up 3% YoY. Specifically, EU supply dropped 7% YoY (vs. the 1% YoY decline in September), against the backdrop of the local energy crisis. On the other hand, output in India (~7% of global steel supply) surged 15% YoY in October (+12% YoY in 10mo23). US steel production added 3% YoY, while Russia’s output rose 10% YoY, in line with the September dynamics
Beijing’s plan to keep national steel output below 2022 levels looks ambitious to us, given that the figure was still up >1% YoY in 10mo23, despite recent production cuts. China represents ~57% of global crude steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 1)
🔗CISA mills' daily crude steel production during mid-November was 1.97mnt, a 0.1% decline from the previous ten days and a 1.6% drop YoY. Meanwhile, local steel inventories rose 4.4% over the same period (-11.4% YoY). Output declined for the 7th consecutive 10-day period, however Chinese steel production on a YTD basis was still up 2.1% YoY, per the CISA data. Overall, as of now, Beijing’s stated intention to cap national steel output below the 2022 levels looks rather unrealistic to us, given that the output for the rest of the year would have to be on average ~18% YoY lower to meet the supply target. To recap, China represents ~57% of global steel output
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production during mid-November was 1.97mnt, a 0.1% decline from the previous ten days and a 1.6% drop YoY. Meanwhile, local steel inventories rose 4.4% over the same period (-11.4% YoY). Output declined for the 7th consecutive 10-day period, however Chinese steel production on a YTD basis was still up 2.1% YoY, per the CISA data. Overall, as of now, Beijing’s stated intention to cap national steel output below the 2022 levels looks rather unrealistic to us, given that the output for the rest of the year would have to be on average ~18% YoY lower to meet the supply target. To recap, China represents ~57% of global steel output
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🇵🇦Cobre Panama has halted commercial production on the back of the protests which have blocked key supplies to the copper mine, Reuters reports, citing a First Quantum message. However, the company expects operations to resume once the recently started port blockade has been resolved. In our view, were the ongoing supply issues to persist, that might add some support for copper prices. To recap, Cobre Panama accounts for ~2% of global copper output
💎 Stornoway diamond miner is on sale amid financial issues, IDEX reports. The company filed for bankruptcy protection last month, and has now suspended operations at Renard, its only diamond mine (~1% of global rough supply) in Quebec, citing India's two-month rough imports ban as one of the reasons. Overall, the news underpins our cautious view on the diamond sector, amid adverse macroeconomic conditions globally
#copper #diamonds
https://metals-wire.com:3000/news-reports
🇵🇦Cobre Panama has halted commercial production on the back of the protests which have blocked key supplies to the copper mine, Reuters reports, citing a First Quantum message. However, the company expects operations to resume once the recently started port blockade has been resolved. In our view, were the ongoing supply issues to persist, that might add some support for copper prices. To recap, Cobre Panama accounts for ~2% of global copper output
💎 Stornoway diamond miner is on sale amid financial issues, IDEX reports. The company filed for bankruptcy protection last month, and has now suspended operations at Renard, its only diamond mine (~1% of global rough supply) in Quebec, citing India's two-month rough imports ban as one of the reasons. Overall, the news underpins our cautious view on the diamond sector, amid adverse macroeconomic conditions globally
#copper #diamonds
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🏗China’s preliminary excavator sales were down 34% YoY in November (domestic + export), following the 29% YoY decline in October, according to CME estimates. Specifically, domestic sales (a key indicator of construction activity) are set to be 47% weaker YoY, after the 43% YoY drop in October. In our view, this trend, if it persists, would indicate that there is no recovery in China's stressed real estate sector, despite Beijing's efforts to bolster the sector. However, the new potential stimulus for the local economy might add support to construction activity and bolster the demand for industrial metals (e.g. steel, copper and aluminium) in 2024
#steel
https://metals-wire.com/sector/Steel
🏗China’s preliminary excavator sales were down 34% YoY in November (domestic + export), following the 29% YoY decline in October, according to CME estimates. Specifically, domestic sales (a key indicator of construction activity) are set to be 47% weaker YoY, after the 43% YoY drop in October. In our view, this trend, if it persists, would indicate that there is no recovery in China's stressed real estate sector, despite Beijing's efforts to bolster the sector. However, the new potential stimulus for the local economy might add support to construction activity and bolster the demand for industrial metals (e.g. steel, copper and aluminium) in 2024
#steel
https://metals-wire.com/sector/Steel