Morning Bites
🔗CISA mills' daily crude steel production in early August was reported at 2.00mnt, +1.5% vs. the previous ten days, but 6.9% lower YoY. YTD output (up to 10 August) was down 2.2% YoY. At the same time, local steel inventories slid 0.9% over the period (also being down 0.9% YoY). We reiterate our view that soft domestic steel demand, which has triggered export growth, might keep weighing on China’s steel output in the near term, unless new material economic support measures are announced by Beijing
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in early August was reported at 2.00mnt, +1.5% vs. the previous ten days, but 6.9% lower YoY. YTD output (up to 10 August) was down 2.2% YoY. At the same time, local steel inventories slid 0.9% over the period (also being down 0.9% YoY). We reiterate our view that soft domestic steel demand, which has triggered export growth, might keep weighing on China’s steel output in the near term, unless new material economic support measures are announced by Beijing
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Week ahead data releases in M&M
As the reporting season continues apace, several major M&M names are scheduled to release their 1H24/2Q24 financials this week. Our EBITDA estimates for Antofagasta and SQM are somewhat below the consensus
#reporting_season
https://metals-wire.com/events
As the reporting season continues apace, several major M&M names are scheduled to release their 1H24/2Q24 financials this week. Our EBITDA estimates for Antofagasta and SQM are somewhat below the consensus
#reporting_season
https://metals-wire.com/events
Morning Bites
🇨🇱Chile’s copper output slid 1% YoY in June, after the +8% YoY seen in May, according to data from the INE. To recap, top Chilean miner Codelco (~7% of global Cu supply) plans to increase production by up to 5% YoY in 2024. In our view, this might support local output, which is still pressured by negative structural effects (e.g. ore depletion) and the unfavourable weather conditions
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) fell 5% YoY in June
#copper
https://metals-wire.com/sector/Copper
🇨🇱Chile’s copper output slid 1% YoY in June, after the +8% YoY seen in May, according to data from the INE. To recap, top Chilean miner Codelco (~7% of global Cu supply) plans to increase production by up to 5% YoY in 2024. In our view, this might support local output, which is still pressured by negative structural effects (e.g. ore depletion) and the unfavourable weather conditions
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) fell 5% YoY in June
#copper
https://metals-wire.com/sector/Copper
Morning Bites
💎 India’s rough diamond net imports shrank 12% YoY in July to USD 870mn, after the 30% YoY drop in June. In terms of volumes, net imports were down 36% YoY to 6.2mnct. India’s polished diamond net exports declined 18% YoY (vs. -25% YoY in June). Synthetic rough diamond net imports dropped 25% YoY, after the 24% YoY drop seen in June. The share of lab-grown net rough imports in total trading was 9% in July. On our numbers, the Indian midstream remained in the stock accumulation zone last month
India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
💎 India’s rough diamond net imports shrank 12% YoY in July to USD 870mn, after the 30% YoY drop in June. In terms of volumes, net imports were down 36% YoY to 6.2mnct. India’s polished diamond net exports declined 18% YoY (vs. -25% YoY in June). Synthetic rough diamond net imports dropped 25% YoY, after the 24% YoY drop seen in June. The share of lab-grown net rough imports in total trading was 9% in July. On our numbers, the Indian midstream remained in the stock accumulation zone last month
India accounts for ~95% of world polished stone supply
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
🏭Global primary aluminium output rose 2.4% YoY in July, decelerating from the revised +3.9% YoY in June, according to the International Aluminium Institute data. China’s production (60% of global Al output in July) rose 2.5% YoY, despite the recent price weakness. We maintain our view that spot Al continues to trade below its fundamentally reasonable level for 2024 (USD >2,500/t), on our numbers
We also note that there is limited potential for additional supply growth in China, as local Al output is capped at 45mnt (vs. ~43mnt annualised in 7mo24)
Overall, strong consumption dynamics in China (incl. solid demand from the local new energy sector and grid), as well as the potential Fed Funds rate cut in September 2024, might add material support to Al prices later this year
#aluminium
https://metals-wire.com/sector/Aluminium
🏭Global primary aluminium output rose 2.4% YoY in July, decelerating from the revised +3.9% YoY in June, according to the International Aluminium Institute data. China’s production (60% of global Al output in July) rose 2.5% YoY, despite the recent price weakness. We maintain our view that spot Al continues to trade below its fundamentally reasonable level for 2024 (USD >2,500/t), on our numbers
We also note that there is limited potential for additional supply growth in China, as local Al output is capped at 45mnt (vs. ~43mnt annualised in 7mo24)
Overall, strong consumption dynamics in China (incl. solid demand from the local new energy sector and grid), as well as the potential Fed Funds rate cut in September 2024, might add material support to Al prices later this year
#aluminium
https://metals-wire.com/sector/Aluminium
Morning Bites (part 2)
☢️ China has ordered the construction of 11 new nuclear reactors as part of its emissions reduction plans, Bloomberg reports. The country has 56 reactors in operation (and now 41 units under construction), accounting for ~5% of its total generation mix in 2023. China currently has more nuclear reactors under construction than any other nation in the world, and approved 10 new units in both 2022 and 2023
Although there are few details on the new reactors, they are expected to launch by 2029. On our numbers, the 11 new units might account for 3-4% of global uranium demand in 2023, based on recent projects, which would represent long-term support for uranium fundamentals
#uranium
https://metals-wire.com/sector/Uranium
☢️ China has ordered the construction of 11 new nuclear reactors as part of its emissions reduction plans, Bloomberg reports. The country has 56 reactors in operation (and now 41 units under construction), accounting for ~5% of its total generation mix in 2023. China currently has more nuclear reactors under construction than any other nation in the world, and approved 10 new units in both 2022 and 2023
Although there are few details on the new reactors, they are expected to launch by 2029. On our numbers, the 11 new units might account for 3-4% of global uranium demand in 2023, based on recent projects, which would represent long-term support for uranium fundamentals
#uranium
https://metals-wire.com/sector/Uranium
Morning Bites (part 3)
🇨🇱 The union at BHP’s Escondida copper mine has signed a new deal, ending a short lasting strike, according to a company statement. BHP did not provide any details on the deal with the union, but earlier sources at the company and the union told Reuters that workers were offered ~USD 32,000 as a bonus and an additional USD 2,000 in soft loans
#copper
https://metals-wire.com/sector/Copper
🇨🇱 The union at BHP’s Escondida copper mine has signed a new deal, ending a short lasting strike, according to a company statement. BHP did not provide any details on the deal with the union, but earlier sources at the company and the union told Reuters that workers were offered ~USD 32,000 as a bonus and an additional USD 2,000 in soft loans
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
🏗 China has approved a CNY 1.4tn (USD 196bn) support package for 5.4k real estate projects, Xinhua reports, citing National Financial Regulatory Administration officials. The announced measures exceed market expectations, as in late-March commercial banks reached a preliminary agreement to fund CNY ~520bn (USD 72bn) for 2.1k projects. Meanwhile, some local mills also noted improved demand for rebar
In our view, the announced package for 'frozen projects' might add support to the weakened sentiment in the steel market
However, we recap that China’s unsold housing stock remains large, at approximately 3.6bn sqf, with an estimated cost of some CNY 7tn
#steel
https://metals-wire.com/sector/Steel
🏗 China has approved a CNY 1.4tn (USD 196bn) support package for 5.4k real estate projects, Xinhua reports, citing National Financial Regulatory Administration officials. The announced measures exceed market expectations, as in late-March commercial banks reached a preliminary agreement to fund CNY ~520bn (USD 72bn) for 2.1k projects. Meanwhile, some local mills also noted improved demand for rebar
In our view, the announced package for 'frozen projects' might add support to the weakened sentiment in the steel market
However, we recap that China’s unsold housing stock remains large, at approximately 3.6bn sqf, with an estimated cost of some CNY 7tn
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🥉Global mined copper production slid 1.7% YoY in June, after increasing 0.8% YoY in May, the International Copper Study Group (ICSG) reports. Over 1H24, output was up 3.1% YoY, due to production recovery at existing assets (mainly in Chile, Indonesia, and the USA), as well as additional production from mine projects ramping up to capacity, namely in the DR Congo (~11% of global supply). Meanwhile, the ICSG notes strong refined copper consumption (+3.3% YoY in 1H24), particularly in China (+5.5% YoY)
Overall, we maintain our positive view on copper, amid growing demand for renewables globally, and surging investments in China’s grid infrastructure
#copper
https://metals-wire.com/sector/Copper
🥉Global mined copper production slid 1.7% YoY in June, after increasing 0.8% YoY in May, the International Copper Study Group (ICSG) reports. Over 1H24, output was up 3.1% YoY, due to production recovery at existing assets (mainly in Chile, Indonesia, and the USA), as well as additional production from mine projects ramping up to capacity, namely in the DR Congo (~11% of global supply). Meanwhile, the ICSG notes strong refined copper consumption (+3.3% YoY in 1H24), particularly in China (+5.5% YoY)
Overall, we maintain our positive view on copper, amid growing demand for renewables globally, and surging investments in China’s grid infrastructure
#copper
https://metals-wire.com/sector/Copper
Morning Bites
🔗Global crude steel output dropped 5% YoY to 153mnt in July, after the <1% YoY growth seen in June, according to the World Steel Association data. China’s production (~54% of global crude steel supply in July) was down 9% YoY, after the flat dynamics in June. Ex-China steel output inched up 1% YoY in July, the same as in June. Specifically, last month, Russian production declined 3% YoY, while US and EU output grew 2% and 6% YoY, respectively. Indian output (~8% of global steel supply) rose another 7% YoY (vs. +6% YoY in June)
Although steel market sentiment has been depressed in recent months, the recently announced new support package for China’s unfinished real estate projects might bolster local construction activity, we believe
#steel
https://metals-wire.com/sector/Steel
🔗Global crude steel output dropped 5% YoY to 153mnt in July, after the <1% YoY growth seen in June, according to the World Steel Association data. China’s production (~54% of global crude steel supply in July) was down 9% YoY, after the flat dynamics in June. Ex-China steel output inched up 1% YoY in July, the same as in June. Specifically, last month, Russian production declined 3% YoY, while US and EU output grew 2% and 6% YoY, respectively. Indian output (~8% of global steel supply) rose another 7% YoY (vs. +6% YoY in June)
Although steel market sentiment has been depressed in recent months, the recently announced new support package for China’s unfinished real estate projects might bolster local construction activity, we believe
#steel
https://metals-wire.com/sector/Steel
Week ahead data releases in M&M
The reporting season is drawing to a close, but several major M&M names are still due to release their 2Q24 financials. Of those reporting this week, we are more conservative than the consensus on Fortesque’s EBITDA, but more upbeat on S32's results
This week is also due to bring the EU car registrations data for July
#reporting_season
https://metals-wire.com/events
The reporting season is drawing to a close, but several major M&M names are still due to release their 2Q24 financials. Of those reporting this week, we are more conservative than the consensus on Fortesque’s EBITDA, but more upbeat on S32's results
This week is also due to bring the EU car registrations data for July
#reporting_season
https://metals-wire.com/events
Morning Bites (part 1)
📈China’s output of aluminium products rose 5% YoY to 5.6mnt in July, after the -2% YoY in June. Given the persistently strong demand for Al in China (~60% of global consumption), bolstered by the rapid expansion of the new energy sector, we maintain our positive long-term view on aluminium
🥉Chinese output of copper products inched up 1% YoY in July to 1.9mnt, reversing from the -6% YoY in June. Despite some slowdown in consumption, the demand trends remain strong (amid surging grid investments, rapid solar panel installments, etc.) Furthermore, the widely expected monetary easing in the US in 2H24 might add further positives to sentiment on the red metal's price
China represents ~55% of global Cu demand
#aluminium #copper
https://metals-wire.com/news-reports
📈China’s output of aluminium products rose 5% YoY to 5.6mnt in July, after the -2% YoY in June. Given the persistently strong demand for Al in China (~60% of global consumption), bolstered by the rapid expansion of the new energy sector, we maintain our positive long-term view on aluminium
🥉Chinese output of copper products inched up 1% YoY in July to 1.9mnt, reversing from the -6% YoY in June. Despite some slowdown in consumption, the demand trends remain strong (amid surging grid investments, rapid solar panel installments, etc.) Furthermore, the widely expected monetary easing in the US in 2H24 might add further positives to sentiment on the red metal's price
China represents ~55% of global Cu demand
#aluminium #copper
https://metals-wire.com/news-reports
Morning Bites (part 2)
☢️ Kazatomprom has revised down its 2025 output plan ~17% amid project delays and a lack of sulfuric acid (a key raw material), Bloomberg reports. The miner adjusted its 2025 uranium production guidance to 25.0-26.5ktU from initial indications of 30.5-31.5ktU. The production plan for 2024 was raised ~6%. We note that the revised plan still implies growth of some 12% YoY
Overall, we believe that the downward revision of the production target might support to U prices
#uranium
https://metals-wire.com/sector/Uranium
☢️ Kazatomprom has revised down its 2025 output plan ~17% amid project delays and a lack of sulfuric acid (a key raw material), Bloomberg reports. The miner adjusted its 2025 uranium production guidance to 25.0-26.5ktU from initial indications of 30.5-31.5ktU. The production plan for 2024 was raised ~6%. We note that the revised plan still implies growth of some 12% YoY
Overall, we believe that the downward revision of the production target might support to U prices
#uranium
https://metals-wire.com/sector/Uranium
Morning Bites
🔗CISA mills' daily crude steel production in mid-August was reported at 1.99mnt, 0.5% lower than in the previous ten days and down 10.0% YoY (mostly due to the high base effect). At the same time, local steel inventories grew 3.5% over the period (but were -1.1% YoY). According to the CISA data, China’s steel output was down 2.6% YTD through 20 August. Despite the soft steel market sentiment in recent months, the recently announced new support package for China’s unfinished real estate projects might bolster local construction activity, we believe
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
🔗CISA mills' daily crude steel production in mid-August was reported at 1.99mnt, 0.5% lower than in the previous ten days and down 10.0% YoY (mostly due to the high base effect). At the same time, local steel inventories grew 3.5% over the period (but were -1.1% YoY). According to the CISA data, China’s steel output was down 2.6% YTD through 20 August. Despite the soft steel market sentiment in recent months, the recently announced new support package for China’s unfinished real estate projects might bolster local construction activity, we believe
China accounts for ~57% of global steel supply
#steel
https://metals-wire.com/sector/Steel
Morning Bites
🏗China’s preliminary excavator sales grew 9% YoY in August (domestic + export), in line with the dynamics in July, according to the CME estimates. The figure, however, is likely to remain 21% below the 2021 level. Specifically, domestic excavator sales are set to grow 16% YoY in August (although that would still be -47% vs. August 2021), which might indicate that local construction activity is gradually bottoming out. Meanwhile, the recently announced support package for China’s unfinished real estate projects could accelerate this recovery, we believe
China accounts for 52% of global steel consumption, and for 55% and 58% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
🏗China’s preliminary excavator sales grew 9% YoY in August (domestic + export), in line with the dynamics in July, according to the CME estimates. The figure, however, is likely to remain 21% below the 2021 level. Specifically, domestic excavator sales are set to grow 16% YoY in August (although that would still be -47% vs. August 2021), which might indicate that local construction activity is gradually bottoming out. Meanwhile, the recently announced support package for China’s unfinished real estate projects could accelerate this recovery, we believe
China accounts for 52% of global steel consumption, and for 55% and 58% of world Cu and Al demand, respectively
#steel
https://metals-wire.com/sector/Steel
Morning Bites
📈Russia’s gold output increased 10.1% YoY in July, after the broadly flat dynamics in June, according to the Rosstat data. The figure was also 5.9% YoY higher on the 7mo24 basis, and up 26.2% MoM. Russia’s gold output accounts for ~9% of the world's mined supply
We maintain our view that gold is trading above its fundamentally reasonable level for 2024 of USD 2,300-2,400/oz, due to the persistently strong demand from global central banks and in light of the widely expected US Fed funds rate cut in 2024. However, gold has more upside risks from here, amid the unfavourable geopolitical environment globally
#gold
https://metals-wire.com/sector/Gold
📈Russia’s gold output increased 10.1% YoY in July, after the broadly flat dynamics in June, according to the Rosstat data. The figure was also 5.9% YoY higher on the 7mo24 basis, and up 26.2% MoM. Russia’s gold output accounts for ~9% of the world's mined supply
We maintain our view that gold is trading above its fundamentally reasonable level for 2024 of USD 2,300-2,400/oz, due to the persistently strong demand from global central banks and in light of the widely expected US Fed funds rate cut in 2024. However, gold has more upside risks from here, amid the unfavourable geopolitical environment globally
#gold
https://metals-wire.com/sector/Gold
Morning Bites
🚘EU + UK passenger car registrations were flat YoY in July, after the 4% YoY increase in June. The dynamics matched our estimates. The July sales figures were still 23% below the pre-COVID, 2019 level. We reiterate our view that EU car sales are likely to remain sluggish in the near future, given continuously weak local economic activity (as indicated by the EU PMI remaining <50), which might further weigh on PGM consumption
In 2023, the EU+UK accounted for some 23% and 30% of world autocatalyst Pd and Pt demand, respectively
#cars
https://metals-wire.com/sector/PGM
🚘EU + UK passenger car registrations were flat YoY in July, after the 4% YoY increase in June. The dynamics matched our estimates. The July sales figures were still 23% below the pre-COVID, 2019 level. We reiterate our view that EU car sales are likely to remain sluggish in the near future, given continuously weak local economic activity (as indicated by the EU PMI remaining <50), which might further weigh on PGM consumption
In 2023, the EU+UK accounted for some 23% and 30% of world autocatalyst Pd and Pt demand, respectively
#cars
https://metals-wire.com/sector/PGM
Morning Bites
💍China’s jewellery and watch retail sales slid 12% YoY in July, after the 11% YoY gain in June. Meanwhile, on the 7mo24 basis, sales were broadly flat YoY. According to Rapaport, local demand for engagement rings was rather weak in July, while Mainland consumers preferred spending at overseas destinations. Despite the soft Chinese dynamics, we reiterate our view that the ongoing recovery in US downstream demand (~53% of global retail gem-set jewellery trade) could accelerate the release of industry inventories in 2H24, supporting sentiment in the stressed diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
💍China’s jewellery and watch retail sales slid 12% YoY in July, after the 11% YoY gain in June. Meanwhile, on the 7mo24 basis, sales were broadly flat YoY. According to Rapaport, local demand for engagement rings was rather weak in July, while Mainland consumers preferred spending at overseas destinations. Despite the soft Chinese dynamics, we reiterate our view that the ongoing recovery in US downstream demand (~53% of global retail gem-set jewellery trade) could accelerate the release of industry inventories in 2H24, supporting sentiment in the stressed diamond market
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
💍Hong Kong jewellery and watch sales dropped 25% YoY in July, accelerating from the 23% YoY decline in June, according to the government data. Sales were also -32% vs. the pre-Covid 2019 level. According to Rapaport, local demand was subdued in July, as consumers from the Mainland preferred spending abroad, which weighed on sales in Hong Kong, as the main consumers in HK are from China. Despite soft demand in HK, sentiment on the key US market (~53% of the world's gem-set jewellery trade) remains strong. That might accelerate the industry's stock release in 2024 and add support to the stressed diamond sector, we believe
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales dropped 25% YoY in July, accelerating from the 23% YoY decline in June, according to the government data. Sales were also -32% vs. the pre-Covid 2019 level. According to Rapaport, local demand was subdued in July, as consumers from the Mainland preferred spending abroad, which weighed on sales in Hong Kong, as the main consumers in HK are from China. Despite soft demand in HK, sentiment on the key US market (~53% of the world's gem-set jewellery trade) remains strong. That might accelerate the industry's stock release in 2024 and add support to the stressed diamond sector, we believe
#diamonds
https://metals-wire.com/sector/Diamonds