Morning Bites (part 1)
🔗Chinese steelmakers are facing soft demand, with looming doubts over 2H23, Bloomberg reports. The mills in China, which accounted for ~56% of global steel supply in May, are under pressure as the economic recovery has stalled: according to the CISA, almost half of the major mills were loss-making in 5mo23 due to the unfavourable price environment. Although the recovery is slower than expected, we note that China’s government is discussing new measures to support the real estate segment, as well as infrastructure projects, and that this might boost the demand for industrial metals later in 2023
#steel
https://metals-wire.com/sector/Steel
🔗Chinese steelmakers are facing soft demand, with looming doubts over 2H23, Bloomberg reports. The mills in China, which accounted for ~56% of global steel supply in May, are under pressure as the economic recovery has stalled: according to the CISA, almost half of the major mills were loss-making in 5mo23 due to the unfavourable price environment. Although the recovery is slower than expected, we note that China’s government is discussing new measures to support the real estate segment, as well as infrastructure projects, and that this might boost the demand for industrial metals later in 2023
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🇨🇱Chile’s copper production was down 14% YoY in May, accelerating from the 1% YoY fall in April. Overall, its output was the lowest within the observable period of the last seven years, amid the drought and negative structural effects (e.g. grade depletion). Moreover, the recent floods are likely to weigh on Chilean supply in the coming months, amplifying the negative effect. In our view, were these factors to continue affecting mining in Chile (~27% of world mined Cu production), they might partially offset the positive effect from new projects globally (Kamoa, QB2, Udokan, etc) in 2023
#copper
https://metals-wire.com:3000/sector/Copper
🇨🇱Chile’s copper production was down 14% YoY in May, accelerating from the 1% YoY fall in April. Overall, its output was the lowest within the observable period of the last seven years, amid the drought and negative structural effects (e.g. grade depletion). Moreover, the recent floods are likely to weigh on Chilean supply in the coming months, amplifying the negative effect. In our view, were these factors to continue affecting mining in Chile (~27% of world mined Cu production), they might partially offset the positive effect from new projects globally (Kamoa, QB2, Udokan, etc) in 2023
#copper
https://metals-wire.com:3000/sector/Copper
Morning Bites (part 3)
💎De Beers and Botswana have reached a diamond deal after tense negotiations, IDEX reports. According to the new agreement, Botswana will receive a 30% share immediately, with a gradual increase to 50% over the next ten years. To recap, under the 2011 deal, De Beers received 90% of the rough diamonds produced, while in 2020, its share was reduced to 75%. On our numbers, De Beers accounted for ~28% of the world's supply in 2022, while Botswana accounts for ~70% of De Beers’ rough production. The signing of this agreement lifts the supply disruption risks that arose amid the uncertainty over the deal (the negotiations had been ongoing since 2018)
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers and Botswana have reached a diamond deal after tense negotiations, IDEX reports. According to the new agreement, Botswana will receive a 30% share immediately, with a gradual increase to 50% over the next ten years. To recap, under the 2011 deal, De Beers received 90% of the rough diamonds produced, while in 2020, its share was reduced to 75%. On our numbers, De Beers accounted for ~28% of the world's supply in 2022, while Botswana accounts for ~70% of De Beers’ rough production. The signing of this agreement lifts the supply disruption risks that arose amid the uncertainty over the deal (the negotiations had been ongoing since 2018)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 1)
💍Hong Kong jewellery and watch sales rose 52% YoY in May, following April's spike of 75% YoY, according to government data. The robust recovery trend began after HK’s border with the Mainland was reopened in early 2023 (in April, 2.9mn visitors arrived in HK vs. <5k a year ago). Although sales have been showing a strong double-digit increase this year, we note that the 2022 comparison base was low: May sales were 24% below the pre-Covid (May-19) level. In addition, the jewellery segment remains subdued in the US and China (~50% and ~15% of the world's gem-set jewellery trade, respectively). Hence, considering the adverse economic conditions globally, we reiterate our cautious view on the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
💍Hong Kong jewellery and watch sales rose 52% YoY in May, following April's spike of 75% YoY, according to government data. The robust recovery trend began after HK’s border with the Mainland was reopened in early 2023 (in April, 2.9mn visitors arrived in HK vs. <5k a year ago). Although sales have been showing a strong double-digit increase this year, we note that the 2022 comparison base was low: May sales were 24% below the pre-Covid (May-19) level. In addition, the jewellery segment remains subdued in the US and China (~50% and ~15% of the world's gem-set jewellery trade, respectively). Hence, considering the adverse economic conditions globally, we reiterate our cautious view on the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🌏Global manufacturing PMIs showed mostly negative dynamics in June. The Eurozone Markit Manufacturing PMI fell to 43.4 (from 45.8 in April), missing the consensus estimate of 43.6. The US ISM manufacturing PMI also dropped, to 46.0 (from 46.9 in May)
🇨🇳The official NBS Manufacturing PMI in China inched up to 49.0 in June (from 48.8 in May), matching market estimates. Meanwhile, the Caixin China Manufacturing PMI was 50.5 in June, outpacing the forecasts of 50.2
❗️The global manufacturing sector remained depressed in June, as indicated by most of the PMIs staying below 50.0. Overall, the dynamics are unfavourable for the demand for industrial metals (e.g. steel, aluminum and copper). However, Beijing's stated intention to support the real estate segment, as well as plans for massive infrastructure projects, might boost metals consumption later this year
#PMIs
https://metals-wire.com:3000/news-reports
🌏Global manufacturing PMIs showed mostly negative dynamics in June. The Eurozone Markit Manufacturing PMI fell to 43.4 (from 45.8 in April), missing the consensus estimate of 43.6. The US ISM manufacturing PMI also dropped, to 46.0 (from 46.9 in May)
🇨🇳The official NBS Manufacturing PMI in China inched up to 49.0 in June (from 48.8 in May), matching market estimates. Meanwhile, the Caixin China Manufacturing PMI was 50.5 in June, outpacing the forecasts of 50.2
❗️The global manufacturing sector remained depressed in June, as indicated by most of the PMIs staying below 50.0. Overall, the dynamics are unfavourable for the demand for industrial metals (e.g. steel, aluminum and copper). However, Beijing's stated intention to support the real estate segment, as well as plans for massive infrastructure projects, might boost metals consumption later this year
#PMIs
https://metals-wire.com:3000/news-reports
Morning Bites
💎US jewellery sales shrank 5% YoY in May, after the 7% YoY drop in April, according to the Department of Commerce. Sales have been showing negative dynamics since October 2022 (ex. January 2023, when there was growth of ~1% YoY). Overall, consumer sentiment remains cautious amid the adverse economic conditions, which results in weaker demand for jewellery and keeps weighing on diamond prices. Hence, we reiterate our view that the ongoing decline in US jewellery sales is likely to weigh further on the demand for rough diamonds, as the US accounts for ~50% of world diamond jewellery sales
#diamonds
https://metals-wire.com/sector/Diamonds
💎US jewellery sales shrank 5% YoY in May, after the 7% YoY drop in April, according to the Department of Commerce. Sales have been showing negative dynamics since October 2022 (ex. January 2023, when there was growth of ~1% YoY). Overall, consumer sentiment remains cautious amid the adverse economic conditions, which results in weaker demand for jewellery and keeps weighing on diamond prices. Hence, we reiterate our view that the ongoing decline in US jewellery sales is likely to weigh further on the demand for rough diamonds, as the US accounts for ~50% of world diamond jewellery sales
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🇵🇪Peru’s copper output surged 36% YoY in May, after the 31% YoY jump in April. This robust growth (+19% YoY in 5mo23) is above even the government's ambitious plan to boost domestic production 15% YoY in 2023. The overall local mining sector has also improved as a result of the positive performance in the copper and iron ore segments, according to INEI. Despite the ongoing growth in the country’s output, the joint production of the two main copper mining hubs (Peru and Chile, with 11% and 27% of the world Cu supply, respectively) was down 1% YoY in May (vs. +8% YoY in April)
#copper
https://metals-wire.com/sector/Copper
🇵🇪Peru’s copper output surged 36% YoY in May, after the 31% YoY jump in April. This robust growth (+19% YoY in 5mo23) is above even the government's ambitious plan to boost domestic production 15% YoY in 2023. The overall local mining sector has also improved as a result of the positive performance in the copper and iron ore segments, according to INEI. Despite the ongoing growth in the country’s output, the joint production of the two main copper mining hubs (Peru and Chile, with 11% and 27% of the world Cu supply, respectively) was down 1% YoY in May (vs. +8% YoY in April)
#copper
https://metals-wire.com/sector/Copper
Morning Bites (part 1)
🔗CISA mills' daily crude steel production during late June was 2.25mnt, a 0.7% drop from the previous ten days. However, output rose 7.0% YoY due to the low comparison base from 2022. At the same time, local steel inventories fell 8.9% (-12.8% YoY). Although output grew YoY in June, we note Beijing’s stated intention not to exceed the 2022 production level. Furthermore, the potential new stimulus for China’s property sector might favourably affect steel demand later in 2023
#steel
https://metals-wire.com:3000/sector/Steel
🔗CISA mills' daily crude steel production during late June was 2.25mnt, a 0.7% drop from the previous ten days. However, output rose 7.0% YoY due to the low comparison base from 2022. At the same time, local steel inventories fell 8.9% (-12.8% YoY). Although output grew YoY in June, we note Beijing’s stated intention not to exceed the 2022 production level. Furthermore, the potential new stimulus for China’s property sector might favourably affect steel demand later in 2023
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 2)
📈Gold-backed ETFs saw outflows of 56t in June, disrupting the 3 months of consecutive growth, which included a 19t gain in May. This means the overall net outflow for 1H23 was 50t. According to the World Gold Council (WGC), last month's outflows were concentrated in Europe and North America, which collectively lost 53t in June. The sales from ETFs might have been the main pressuring factor for the gold performance in June: the price declined ~3% over the month. Despite some downturn in world ETF sentiment, we maintain our positive outlook on the yellow metal’s performance, due to rising gold miners’ cash costs and steady YoY growth in physical gold demand
#ETF #gold
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📈Gold-backed ETFs saw outflows of 56t in June, disrupting the 3 months of consecutive growth, which included a 19t gain in May. This means the overall net outflow for 1H23 was 50t. According to the World Gold Council (WGC), last month's outflows were concentrated in Europe and North America, which collectively lost 53t in June. The sales from ETFs might have been the main pressuring factor for the gold performance in June: the price declined ~3% over the month. Despite some downturn in world ETF sentiment, we maintain our positive outlook on the yellow metal’s performance, due to rising gold miners’ cash costs and steady YoY growth in physical gold demand
#ETF #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
🏦Global central banks were net sellers of gold for the second consecutive month in May, the World Gold Council reports. Overall, central bank net sales reached 27t (vs. the revised 69t in April). The main contributors were Turkey (-63t) and Uzbekistan (-11t). In relation to future central bank sales, we note that Turkey has already sold 113t (26% of its current reserves) in 2023, which leaves the country limited selling capacity for the coming months, in our view. On the buyers side were Poland and China (+20t and +16t, respectively). Although central banks have sold substantial gold volumes, we maintain our positive view on the precious metal's price, amid inflationary pressures and the adverse macroeconomic situation globally
#gold
https://metals-wire.com/sector/Gold
🏦Global central banks were net sellers of gold for the second consecutive month in May, the World Gold Council reports. Overall, central bank net sales reached 27t (vs. the revised 69t in April). The main contributors were Turkey (-63t) and Uzbekistan (-11t). In relation to future central bank sales, we note that Turkey has already sold 113t (26% of its current reserves) in 2023, which leaves the country limited selling capacity for the coming months, in our view. On the buyers side were Poland and China (+20t and +16t, respectively). Although central banks have sold substantial gold volumes, we maintain our positive view on the precious metal's price, amid inflationary pressures and the adverse macroeconomic situation globally
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 1)
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 18% YoY in June, a slight acceleration from the 17% YoY growth in May. Nevertheless, the figure was still 18% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 14% and 23%, respectively, vs. 2019, while sales in France were 17% lower. Moreover, sales in the UK and Italy were 21% and 19% less than in 2019, respectively. Given that these countries represent ~70% of total European new vehicle registrations, we believe that local car sales have likely continued to show YoY growth, 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 18% YoY in June, a slight acceleration from the 17% YoY growth in May. Nevertheless, the figure was still 18% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 14% and 23%, respectively, vs. 2019, while sales in France were 17% lower. Moreover, sales in the UK and Italy were 21% and 19% less than in 2019, respectively. Given that these countries represent ~70% of total European new vehicle registrations, we believe that local car sales have likely continued to show YoY growth, while remaining below their pre-pandemic levels
#cars
https://metals-wire.com:3000/sector/PGM
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Morning Bites (part 2)
🏦China continued to accumulate gold reserves in June, being a net purchaser for the eighth consecutive month, Bloomberg reports. According to the latest announcement from the People's Bank of China, it bought 23 tons of gold, bringing total purchases since November 2022 to 183 tons. We note that, in annualised terms, purchases in the period November 2022 - June 2023 are equivalent to ~6% of world physical gold demand in 2022. As per Bloomberg, the ongoing accumulation of gold reserves has been driven by looming geopolitical tensions and the stated aim to reduce the share of the US dollar in reserves. Overall, we keep our positive view on gold prices, given miners’ rising cash costs and inflationary pressures. In addition, CB managers reportedly intend to continue accumulating reserves later in 2023
#gold
https://metals-wire.com/sector/Gold
🏦China continued to accumulate gold reserves in June, being a net purchaser for the eighth consecutive month, Bloomberg reports. According to the latest announcement from the People's Bank of China, it bought 23 tons of gold, bringing total purchases since November 2022 to 183 tons. We note that, in annualised terms, purchases in the period November 2022 - June 2023 are equivalent to ~6% of world physical gold demand in 2022. As per Bloomberg, the ongoing accumulation of gold reserves has been driven by looming geopolitical tensions and the stated aim to reduce the share of the US dollar in reserves. Overall, we keep our positive view on gold prices, given miners’ rising cash costs and inflationary pressures. In addition, CB managers reportedly intend to continue accumulating reserves later in 2023
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 1)
🏗China’s excavator sales dropped 24% YoY in June (domestic + export), after the 19% YoY fall in May. The decline was roughly in line with preliminary CME estimates (-23% YoY). Specifically, domestic excavator sales were down 45% YoY, vs. the 46% YoY fall in May. As a leading indicator of construction activity, sluggish domestic excavator sales show that China’s property sector remains weak (sales have been showing negative YoY dynamics since May 2021), which is a negative factor for China’s demand for industrial metals. The country 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
🏗China’s excavator sales dropped 24% YoY in June (domestic + export), after the 19% YoY fall in May. The decline was roughly in line with preliminary CME estimates (-23% YoY). Specifically, domestic excavator sales were down 45% YoY, vs. the 46% YoY fall in May. As a leading indicator of construction activity, sluggish domestic excavator sales show that China’s property sector remains weak (sales have been showing negative YoY dynamics since May 2021), which is a negative factor for China’s demand for industrial metals. The country 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
Morning Bites (part 2)
💍 Chow Tai Fook’s 2Q23 LFL sales were up 1% YoY in the gem-set, platinum and K-gold jewellery segment (vs. +12% YoY in 1Q23). Sales in the gem-set segment in Mainland China were down 4% YoY (vs. -19% YoY in 1Q23), while HK and Macau sales were up 17% YoY, after the 99% YoY spike in the previous quarter. The overall dynamics were neutral: sales in HK continued to recover after the border with Mainland China reopened, but the figure was offset by stressed sales in China itself. To recap, China accounts for ~15% of global diamond jewellery retail sales. Hence, we maintain our cautious view on the diamond sector, which is still heavily stressed by the adverse macroeconomic conditions globally and the continuous downturn in US sales (~50% of the world gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
💍 Chow Tai Fook’s 2Q23 LFL sales were up 1% YoY in the gem-set, platinum and K-gold jewellery segment (vs. +12% YoY in 1Q23). Sales in the gem-set segment in Mainland China were down 4% YoY (vs. -19% YoY in 1Q23), while HK and Macau sales were up 17% YoY, after the 99% YoY spike in the previous quarter. The overall dynamics were neutral: sales in HK continued to recover after the border with Mainland China reopened, but the figure was offset by stressed sales in China itself. To recap, China accounts for ~15% of global diamond jewellery retail sales. Hence, we maintain our cautious view on the diamond sector, which is still heavily stressed by the adverse macroeconomic conditions globally and the continuous downturn in US sales (~50% of the world gem-set jewellery trade)
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
💎Kimberley Process has reported a 1% YoY drop, to 118.0mnct, in global diamond production in 2022. Botswana's output was flat YoY, while production in Russia rose 7% YoY to 41.9mnct. However, this increase was offset by declining output in the rest of the world. Despite relatively stable production in 2022, we maintain our view that the stressed global jewellery market is likely to keep weighing on diamond demand, at least in the short term
#diamonds
https://metals-wire.com/sector/Diamonds
💎Kimberley Process has reported a 1% YoY drop, to 118.0mnct, in global diamond production in 2022. Botswana's output was flat YoY, while production in Russia rose 7% YoY to 41.9mnct. However, this increase was offset by declining output in the rest of the world. Despite relatively stable production in 2022, we maintain our view that the stressed global jewellery market is likely to keep weighing on diamond demand, at least in the short term
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites
🏦China’s aggregate financing declined 19% YoY in June to CNY 4.22tn, after the 45% YoY drop in May. The fall was mostly due to the high comparison base in 2022: total financing beat the consensus by 41% in June. At the same time, traditional bank loans rose 9% YoY (-28% YoY in May), 30% above consensus expectations. It was also the largest amount of new bank loans for any June month since early-2000s, which is likely following Beijing's efforts to revive economic growth via reducing its key lending rates. In our view, this might support domestic construction activity, which, together with massive infrastructure projects, might bolster China's demand for industrial metals
#global
https://metals-wire.com:3000/news-reports
🏦China’s aggregate financing declined 19% YoY in June to CNY 4.22tn, after the 45% YoY drop in May. The fall was mostly due to the high comparison base in 2022: total financing beat the consensus by 41% in June. At the same time, traditional bank loans rose 9% YoY (-28% YoY in May), 30% above consensus expectations. It was also the largest amount of new bank loans for any June month since early-2000s, which is likely following Beijing's efforts to revive economic growth via reducing its key lending rates. In our view, this might support domestic construction activity, which, together with massive infrastructure projects, might bolster China's demand for industrial metals
#global
https://metals-wire.com:3000/news-reports
🗞Today, China published its preliminary import/export statistics for June (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 net finished steel exports inched up 2% YoY in June, after the 11% YoY growth in May. At the same time, average daily crude steel output was up 1% YoY, according to the CISA data. We also note that China has eased its monetary policy, in order to revive economic growth, e.g. in the real estate segment, which might provide some support for industrial metals demand later in 2023, in our view
🪨China’s coal imports jumped 110% YoY in June (vs. the +93% YoY in May). Although domestic coal output continued to climb, imports stood at historical highs. According to a recent CREA report, most of the growth was due to increased imports from Australia, following the lifting of restrictions, as well as higher shipments from Russia and Indonesia. Some mismatch between the quality of the produced and the required coal could cause a shift towards imported coal, CREA noted
#coal #steel
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🔗China’s net finished steel exports inched up 2% YoY in June, after the 11% YoY growth in May. At the same time, average daily crude steel output was up 1% YoY, according to the CISA data. We also note that China has eased its monetary policy, in order to revive economic growth, e.g. in the real estate segment, which might provide some support for industrial metals demand later in 2023, in our view
🪨China’s coal imports jumped 110% YoY in June (vs. the +93% YoY in May). Although domestic coal output continued to climb, imports stood at historical highs. According to a recent CREA report, most of the growth was due to increased imports from Australia, following the lifting of restrictions, as well as higher shipments from Russia and Indonesia. Some mismatch between the quality of the produced and the required coal could cause a shift towards imported coal, CREA noted
#coal #steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
💎De Beers reduced rough diamond prices at its 6th cycle, as demand continues to disappoint, according to IDEX. The price of stones over 2ct was reduced by 10-20%; however, smaller stones weren't affected, Times of India reports. To recap, during its previous cycle, De Beers also lowered prices for >2ct and 1.0-1.5ct items by 5-10%. On our numbers, the De Beers price index has fallen ~11% YTD. We note that De Beers' sales remain subdued, showing one of the worst YTD dynamics within the observable period, while many factories in Surat are already working reduced hours because of slow demand and tight margins. Given the overall negative market data, we maintain our cautious outlook on the diamond market globally, which is still heavily stressed, affected by the adverse macroeconomic conditions and inflationary pressure
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers reduced rough diamond prices at its 6th cycle, as demand continues to disappoint, according to IDEX. The price of stones over 2ct was reduced by 10-20%; however, smaller stones weren't affected, Times of India reports. To recap, during its previous cycle, De Beers also lowered prices for >2ct and 1.0-1.5ct items by 5-10%. On our numbers, the De Beers price index has fallen ~11% YTD. We note that De Beers' sales remain subdued, showing one of the worst YTD dynamics within the observable period, while many factories in Surat are already working reduced hours because of slow demand and tight margins. Given the overall negative market data, we maintain our cautious outlook on the diamond market globally, which is still heavily stressed, affected by the adverse macroeconomic conditions and inflationary pressure
#diamonds
https://metals-wire.com/sector/Diamonds
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