Morning Bites
🚘US light vehicle sales declined 6% YoY in June, vs. the +1% YoY seen in May. The figure was also well below the pre-Covid 2019 level (-18% vs. June 2019). According to Marklines, the sales declined markedly (especially among Japanese and European brands), as the rush-buying in anticipation of price hikes ahead of tariffs came to an end
Meanwhile, the US Congress has recently approved new budget legislation that will eliminate existing USD 7,500 and USD 4,000 tax credits for buying new and used EVs, respectively, by the end of September 2025. In our view, this move will negatively affect BEV sales in the US (~10% of global EV registrations in 2024), as was the case in Germany in early-2024. However, this is a favourable factor for PGM market fundamentals: the share of catalyst-containing cars in local sales will gradually increase, we believe
On our numbers, North America accounted for 24% and 15% of world autocatalyst Pd and Pt consumption, respectively, in 2024
#cars #PGMs
🚘US light vehicle sales declined 6% YoY in June, vs. the +1% YoY seen in May. The figure was also well below the pre-Covid 2019 level (-18% vs. June 2019). According to Marklines, the sales declined markedly (especially among Japanese and European brands), as the rush-buying in anticipation of price hikes ahead of tariffs came to an end
Meanwhile, the US Congress has recently approved new budget legislation that will eliminate existing USD 7,500 and USD 4,000 tax credits for buying new and used EVs, respectively, by the end of September 2025. In our view, this move will negatively affect BEV sales in the US (~10% of global EV registrations in 2024), as was the case in Germany in early-2024. However, this is a favourable factor for PGM market fundamentals: the share of catalyst-containing cars in local sales will gradually increase, we believe
On our numbers, North America accounted for 24% and 15% of world autocatalyst Pd and Pt consumption, respectively, in 2024
#cars #PGMs
🗞Today, China published its preliminary import/export statistics for June (see table above)
#statistics #China
#statistics #China
Morning Bites
🔗China’s net finished steel exports were up 13% YoY in June, after the 12% YoY gain in May, amid persistently soft domestic demand, reports Reuters. To recap, the Chinese authorities are considering cutting local steel output in 2025, in an attempt to restore market balance and profitability at mills. Although the measure’s size was not specified, market participants expect China’s steel supply to decline 2-5% YoY this year. On our numbers a 2-3% output cut could normalise abnormal Chinese net export volumes (which grew 25% YoY in 2024 and 11% YoY in 1H25)
🪨China’s coal imports dropped 26% YoY in June, accelerating from the 18% YoY decline in May, and reached the lowest monthly level in over two years. Reuters reports that the negative dynamics of recent months was both due to the high base effect from 2024 (when a series of mine accidents in Shanxi coal hub drove up imports) and record coal output coupled with soft domestic demand that led to elevated inventories
#coal #steel
🔗China’s net finished steel exports were up 13% YoY in June, after the 12% YoY gain in May, amid persistently soft domestic demand, reports Reuters. To recap, the Chinese authorities are considering cutting local steel output in 2025, in an attempt to restore market balance and profitability at mills. Although the measure’s size was not specified, market participants expect China’s steel supply to decline 2-5% YoY this year. On our numbers a 2-3% output cut could normalise abnormal Chinese net export volumes (which grew 25% YoY in 2024 and 11% YoY in 1H25)
🪨China’s coal imports dropped 26% YoY in June, accelerating from the 18% YoY decline in May, and reached the lowest monthly level in over two years. Reuters reports that the negative dynamics of recent months was both due to the high base effect from 2024 (when a series of mine accidents in Shanxi coal hub drove up imports) and record coal output coupled with soft domestic demand that led to elevated inventories
#coal #steel
Week ahead data releases in M&M
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among major M&M names, Alcoa is set to release its 2Q25 earnings. On the EBITDA side, we are moderately more bullish than the consensus
This week, we also expect to see Chinese industrial production data for June, monthly South African mining statistics, as well as Indian diamond trade data
#reporting_season
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among major M&M names, Alcoa is set to release its 2Q25 earnings. On the EBITDA side, we are moderately more bullish than the consensus
This week, we also expect to see Chinese industrial production data for June, monthly South African mining statistics, as well as Indian diamond trade data
#reporting_season
🗞Today, China has published its industrial production data for June (see table above)
#statistics #China
#statistics #China
Morning Bites (part 1)
🔗China’s crude steel output dropped 9% YoY in June vs. the -7% YoY in May, according to the NBS data. The recent production declines are likely related to Beijing’s plans to cut 'excessive' steel output in 2025 (up to 2-5% of China’s 2024 supply, per market estimates). Although local crude steel supply dropped 3% YoY in 1H25, per official data, Chinese net exports were up 11% YoY over the period, still weighing on global steel prices
🏢China's property sales slid 7% YoY in June, after the 5% YoY decline in May, and were down 53% vs. the 2021 levels. Meanwhile, floor space starts decreased a further 9% YoY in June (-73% vs. 2021). Personal mortgage loans decreased 23% YoY in May (-59% vs. 2021), while property completions inched down 2% YoY
#steel #property
🔗China’s crude steel output dropped 9% YoY in June vs. the -7% YoY in May, according to the NBS data. The recent production declines are likely related to Beijing’s plans to cut 'excessive' steel output in 2025 (up to 2-5% of China’s 2024 supply, per market estimates). Although local crude steel supply dropped 3% YoY in 1H25, per official data, Chinese net exports were up 11% YoY over the period, still weighing on global steel prices
🏢China's property sales slid 7% YoY in June, after the 5% YoY decline in May, and were down 53% vs. the 2021 levels. Meanwhile, floor space starts decreased a further 9% YoY in June (-73% vs. 2021). Personal mortgage loans decreased 23% YoY in May (-59% vs. 2021), while property completions inched down 2% YoY
#steel #property
Morning Bites (part 2)
⛏️Implats plans to close its Lac des Iles palladium mine in Canada by mid-2026, Bloomberg reports. According to a company representative, the decision was due to the prolonged period of low PGM prices
On our numbers, the mine accounted for ~3% of global Pd supply in 2024, so its planned closure might deepen the market deficit in 2026F to over 5% of demand — a favorable factor for palladium market sentiment. However, we believe that the decision might be actually postponed if the positive trend in PGM prices (seen since mid-May) persists
#PGMs
⛏️Implats plans to close its Lac des Iles palladium mine in Canada by mid-2026, Bloomberg reports. According to a company representative, the decision was due to the prolonged period of low PGM prices
On our numbers, the mine accounted for ~3% of global Pd supply in 2024, so its planned closure might deepen the market deficit in 2026F to over 5% of demand — a favorable factor for palladium market sentiment. However, we believe that the decision might be actually postponed if the positive trend in PGM prices (seen since mid-May) persists
#PGMs
Morning Bites
💎India’s rough diamond net imports grew 3% YoY in June, vs. the 11% YoY decline in May. Meanwhile, polished diamond net exports dropped 25% YoY. Synthetic rough diamond net imports rose 20% YoY. Lab-grown net rough imports accounted for 7% of total trading
We maintain our view that it might take longer than we had originally anticipated for the global diamond market to recover, given the still high midstream inventories in 2025. Meanwhile, further de-escalation of the US-China trade war (jointly, they account for ~65% of the world gem-set jewellery trade), would become a favorable factor for consumer confidence
India accounts for ~95% of the world's polished stone supply
#diamonds
💎India’s rough diamond net imports grew 3% YoY in June, vs. the 11% YoY decline in May. Meanwhile, polished diamond net exports dropped 25% YoY. Synthetic rough diamond net imports rose 20% YoY. Lab-grown net rough imports accounted for 7% of total trading
We maintain our view that it might take longer than we had originally anticipated for the global diamond market to recover, given the still high midstream inventories in 2025. Meanwhile, further de-escalation of the US-China trade war (jointly, they account for ~65% of the world gem-set jewellery trade), would become a favorable factor for consumer confidence
India accounts for ~95% of the world's polished stone supply
#diamonds
Morning Bites
🇿🇦South Africa’s PGM mining output was flat YoY in May, vs. the 24% YoY decline in April, per official data. Meanwhile, local gold production inched up 2% YoY, reversing from the -3% YoY in April
To recap, heavy rains disrupted domestic mining output in 1Q25, while the high cost of electricity (Eskom lifted its tariffs a further 13% in early-2025) also affected South African miners’ performance. Nevertheless, further PGM production recovery, if it persists, might lead to normalisation of abnormally high platinum prices, we believe
SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of world gold production
#PGMs #gold
🇿🇦South Africa’s PGM mining output was flat YoY in May, vs. the 24% YoY decline in April, per official data. Meanwhile, local gold production inched up 2% YoY, reversing from the -3% YoY in April
To recap, heavy rains disrupted domestic mining output in 1Q25, while the high cost of electricity (Eskom lifted its tariffs a further 13% in early-2025) also affected South African miners’ performance. Nevertheless, further PGM production recovery, if it persists, might lead to normalisation of abnormally high platinum prices, we believe
SA accounts for ~70% of global Pt, 38% of Pd supply and 3% of world gold production
#PGMs #gold
Morning Bites
🔗CISA mills daily crude steel production in early-July was 2.10mnt, down 1.5% vs. the previous ten days, and 2.5% lower YoY. Local steel inventories also decreased 2.5% over the period, being down 2.2% YoY
According to CISA data, on a YTD basis (through 10th July), production dynamics remained slightly positive (+0.5% YoY). Meanwhile, per official NBS data, the country's steel output was down 3.3% YoY in 1H25, following Beijing’s plans to cut 'excessive' supply in 2025. To recap, these measures might affect 2-5% of China’s 2024 supply, per market participants’ estimates
China accounts for ~57% of global steel supply
#steel
🔗CISA mills daily crude steel production in early-July was 2.10mnt, down 1.5% vs. the previous ten days, and 2.5% lower YoY. Local steel inventories also decreased 2.5% over the period, being down 2.2% YoY
According to CISA data, on a YTD basis (through 10th July), production dynamics remained slightly positive (+0.5% YoY). Meanwhile, per official NBS data, the country's steel output was down 3.3% YoY in 1H25, following Beijing’s plans to cut 'excessive' supply in 2025. To recap, these measures might affect 2-5% of China’s 2024 supply, per market participants’ estimates
China accounts for ~57% of global steel supply
#steel
Week ahead data releases in M&M
As the reporting season gains momentum, many M&M names are scheduled to release their 2Q25 financials this week. Overall, our EBITDA estimates are more upbeat than the consensus on Newmont and major copper miners (Freeport, First Quantum and Teck), except Southern Copper
We also await EU car registrations data for June and world steel monthly production statistics this week
#reporting_season
As the reporting season gains momentum, many M&M names are scheduled to release their 2Q25 financials this week. Overall, our EBITDA estimates are more upbeat than the consensus on Newmont and major copper miners (Freeport, First Quantum and Teck), except Southern Copper
We also await EU car registrations data for June and world steel monthly production statistics this week
#reporting_season
Morning Bites
💎Zimbabwe’s biggest diamond miner is cutting 400 jobs, amid a global market downturn, Bloomberg reports, citing a company representative. The decision will affect 20% of the company’s workforce
State-owned Zimbabwe Consolidated Diamond Company (~5% of global rough diamond supply) had to choose between closing operations or maintaining them at a reduced rate whilst awaiting a price recovery, the representative added
We maintain our view that it might take longer than we had originally anticipated for the global diamond market to recover, given the still high midstream inventories in 2025. Meanwhile, further de-escalation of the US-China trade war (jointly, they account for ~65% of the world gem-set jewellery trade), would be a favourable factor for consumer confidence
#diamonds
💎Zimbabwe’s biggest diamond miner is cutting 400 jobs, amid a global market downturn, Bloomberg reports, citing a company representative. The decision will affect 20% of the company’s workforce
State-owned Zimbabwe Consolidated Diamond Company (~5% of global rough diamond supply) had to choose between closing operations or maintaining them at a reduced rate whilst awaiting a price recovery, the representative added
We maintain our view that it might take longer than we had originally anticipated for the global diamond market to recover, given the still high midstream inventories in 2025. Meanwhile, further de-escalation of the US-China trade war (jointly, they account for ~65% of the world gem-set jewellery trade), would be a favourable factor for consumer confidence
#diamonds
Morning Bites (part 1)
🇨🇳China has begun the construction of a massive, USD 170bn hydropower project in Tibet, Bloomberg reports, citing the country’s Premier Li Qiang. The Yarlung Zangbo River project will consist of five cascade dams, with a total annual output estimated at ~300TWh (~3% of China’s electricity generation supply in 2024)
Although no official details have yet been provided on the timing or scope of the project, some market participants expect the mega-dam to be finished in 2030s and add 0.1 p.p. to China’s GDP growth every year during its construction
In our view, the project might add some support to local demand for cement, steel and base metals over the next 10 years, especially if coupled with a potential recovery in the Chinese real estate sector, which started to gradually bottom out in 2H24
#steel
🇨🇳China has begun the construction of a massive, USD 170bn hydropower project in Tibet, Bloomberg reports, citing the country’s Premier Li Qiang. The Yarlung Zangbo River project will consist of five cascade dams, with a total annual output estimated at ~300TWh (~3% of China’s electricity generation supply in 2024)
Although no official details have yet been provided on the timing or scope of the project, some market participants expect the mega-dam to be finished in 2030s and add 0.1 p.p. to China’s GDP growth every year during its construction
In our view, the project might add some support to local demand for cement, steel and base metals over the next 10 years, especially if coupled with a potential recovery in the Chinese real estate sector, which started to gradually bottom out in 2H24
#steel
Morning Bites (part 2)
💍Luk Fook’s 2Q25 LFL sales decreased 17% YoY in the diamond jewellery segment, decelerating from the -36% YoY in 1Q25, according to a press release from the retailer. Specifically, the company’s sales on the Mainland market slid 13% YoY (vs. -25% YoY in 1Q25)
We maintain our view that it might take longer than we had originally anticipated for the global diamond market to recover, given the still high midstream inventories in 2025. Meanwhile, further de-escalation of the US-China trade war (jointly, they account for ~65% of the world gem-set jewellery trade), would be a favourable factor for consumer confidence
#diamonds
💍Luk Fook’s 2Q25 LFL sales decreased 17% YoY in the diamond jewellery segment, decelerating from the -36% YoY in 1Q25, according to a press release from the retailer. Specifically, the company’s sales on the Mainland market slid 13% YoY (vs. -25% YoY in 1Q25)
We maintain our view that it might take longer than we had originally anticipated for the global diamond market to recover, given the still high midstream inventories in 2025. Meanwhile, further de-escalation of the US-China trade war (jointly, they account for ~65% of the world gem-set jewellery trade), would be a favourable factor for consumer confidence
#diamonds
Morning Bites (part 1)
🏭Global primary aluminium output inched up 1.3% YoY in June, vs. the +2.0% YoY in May, per International Aluminium Institute (IAI) data. Chinese production (60% of global Al output) increased 1.7% YoY last month, while ex. China output was up only 0.6% YoY. Overall, strong consumption dynamics in Asia (including grid), the ongoing monetary easing cycle in the EU and China, as well as the expected additional US fed rate cuts in 2H25, are likely to add further support to Al, which we forecast to reach USD 2,700-2,900/t by late 2025 - early 2026
We also note that there is limited potential for additional supply growth in China, as local Al output is capped at 45mnt (China produced 43.4mnt in 2024, as well as 43.7mnt in 1H25 in annualised terms, per IAI data)
#aluminium
🏭Global primary aluminium output inched up 1.3% YoY in June, vs. the +2.0% YoY in May, per International Aluminium Institute (IAI) data. Chinese production (60% of global Al output) increased 1.7% YoY last month, while ex. China output was up only 0.6% YoY. Overall, strong consumption dynamics in Asia (including grid), the ongoing monetary easing cycle in the EU and China, as well as the expected additional US fed rate cuts in 2H25, are likely to add further support to Al, which we forecast to reach USD 2,700-2,900/t by late 2025 - early 2026
We also note that there is limited potential for additional supply growth in China, as local Al output is capped at 45mnt (China produced 43.4mnt in 2024, as well as 43.7mnt in 1H25 in annualised terms, per IAI data)
#aluminium
❤1
Morning Bites (part 2)
🇨🇱Chile’s copper output increased 9% YoY in May, after the 14% YoY gain in April, per INE data. According to market participants, this production increase has partly reflected investment decisions made in 2020-21, a demonstration of the industry's long lead times. We maintain our positive view on copper amid Chile’s long-term supply issues (its peak supply is now likely to be in 2027), growing demand for renewables globally, and surging investments in China’s grid infrastructure (which represents ~8% of global Cu demand, on our numbers)
🇵🇪 Peru’s copper output fell 5% YoY in May, reversing from the +8% YoY in April, per MINEM data. To recap, Peru's top mining association, SNMPE, expects the country's 2025 copper output to hit around 2.80mnt, which is broadly in-line with the 2.74mnt seen in 2024
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) rose 5% YoY in May, due to the jump in Chile’s output
#copper
🇨🇱Chile’s copper output increased 9% YoY in May, after the 14% YoY gain in April, per INE data. According to market participants, this production increase has partly reflected investment decisions made in 2020-21, a demonstration of the industry's long lead times. We maintain our positive view on copper amid Chile’s long-term supply issues (its peak supply is now likely to be in 2027), growing demand for renewables globally, and surging investments in China’s grid infrastructure (which represents ~8% of global Cu demand, on our numbers)
🇵🇪 Peru’s copper output fell 5% YoY in May, reversing from the +8% YoY in April, per MINEM data. To recap, Peru's top mining association, SNMPE, expects the country's 2025 copper output to hit around 2.80mnt, which is broadly in-line with the 2.74mnt seen in 2024
The joint production of Chile and Peru (~24% and ~12% of global Cu supply, respectively) rose 5% YoY in May, due to the jump in Chile’s output
#copper