Morning Bites (part 3)
📈The growth rate of China’s aluminium production accelerated to 10% YoY in August, from 6% YoY in July. According to Reuters, the increase was caused by the launch of new production capacity, which offset the impact of power shortages in some provinces. We also note that the partial 'recovery' of property completions might have supported China’s aluminium demand
🔗ArcelorMittal expects its EU steel production to fall ~17% YoY (by 1.5mnt) in 4Q22, as the company reduces its production capacity in the EU due to weak demand and rising energy costs. We note that the output curtailment might be equal to 4% of the EU's 4Q21 steel production
#aluminium #steel
📈The growth rate of China’s aluminium production accelerated to 10% YoY in August, from 6% YoY in July. According to Reuters, the increase was caused by the launch of new production capacity, which offset the impact of power shortages in some provinces. We also note that the partial 'recovery' of property completions might have supported China’s aluminium demand
🔗ArcelorMittal expects its EU steel production to fall ~17% YoY (by 1.5mnt) in 4Q22, as the company reduces its production capacity in the EU due to weak demand and rising energy costs. We note that the output curtailment might be equal to 4% of the EU's 4Q21 steel production
#aluminium #steel
Morning Bites (part 1)
📌China’s new internal combustion engine car sales rose 16% YoY in August, after the 15% YoY increase in July. The increase in sales was mainly driven by the government support measures. Given that China’s automotive industry accounts for some 26% and 17% of global autocatalyst Pd and Pt demand, respectively, this might be supportive for PGM demand
📌China’s new EV sales increased 104% YoY in August, after the 117% YoY growth in the previous month. Surging EV sales in China are positive for the demand for battery metals (nickel, lithium and cobalt), given that China accounts for 49% of global EV sales
#cars #EV #nickel #lithium #cobalt
📌China’s new internal combustion engine car sales rose 16% YoY in August, after the 15% YoY increase in July. The increase in sales was mainly driven by the government support measures. Given that China’s automotive industry accounts for some 26% and 17% of global autocatalyst Pd and Pt demand, respectively, this might be supportive for PGM demand
📌China’s new EV sales increased 104% YoY in August, after the 117% YoY growth in the previous month. Surging EV sales in China are positive for the demand for battery metals (nickel, lithium and cobalt), given that China accounts for 49% of global EV sales
#cars #EV #nickel #lithium #cobalt
Morning Bites (part 2)
🚘EU + UK passenger car registrations were up 4% YoY in August, reversing from the 10% YoY decline in July. However, this was 31% below the pre-pandemic 2019 level. The actual results were close to the preliminary data. According to some articles, the slight recovery might have been caused by the easing parts shortage. However, since high energy costs are pressuring European households' disposable income, the future dynamics of EU vehicle sales remain uncertain
#cars
🚘EU + UK passenger car registrations were up 4% YoY in August, reversing from the 10% YoY decline in July. However, this was 31% below the pre-pandemic 2019 level. The actual results were close to the preliminary data. According to some articles, the slight recovery might have been caused by the easing parts shortage. However, since high energy costs are pressuring European households' disposable income, the future dynamics of EU vehicle sales remain uncertain
#cars
Morning Bites
💎India’s rough diamond net imports rose 10% YoY in August, after the 27% YoY increase in July. Meanwhile, India’s polished diamond net exports fell 9% YoY in August (vs. -16% YoY in July). In our view, the decline in polished diamond net exports might signal a softening in downstream demand amid rising inflation. Meanwhile, India’s lab-grown rough diamond net imports rose 62% YoY in August (vs. the 21% YoY increase in July). The share of lab-grown net rough imports in natural diamond imports increased to 9% in August, from 7% in July
#diamonds
💎India’s rough diamond net imports rose 10% YoY in August, after the 27% YoY increase in July. Meanwhile, India’s polished diamond net exports fell 9% YoY in August (vs. -16% YoY in July). In our view, the decline in polished diamond net exports might signal a softening in downstream demand amid rising inflation. Meanwhile, India’s lab-grown rough diamond net imports rose 62% YoY in August (vs. the 21% YoY increase in July). The share of lab-grown net rough imports in natural diamond imports increased to 9% in August, from 7% in July
#diamonds
Morning Bites
📉China’s ROM iron ore output fell 3.9% YoY in August, after the 3.5% YoY decline in July. According to Metal Expert, this was mainly caused by the subdued demand for iron ore from steelmakers amid quarantine restrictions, power cuts and unfavourable weather conditions. The weak demand for iron ore was also shown by the 9% YoY increase in iron ore inventories at Chinese ports, as of the end of August. In our view, the demand for iron ore might remain weak in the near term, given the targeted steel output reduction and the depressed construction activity in China
#iron_ore
📉China’s ROM iron ore output fell 3.9% YoY in August, after the 3.5% YoY decline in July. According to Metal Expert, this was mainly caused by the subdued demand for iron ore from steelmakers amid quarantine restrictions, power cuts and unfavourable weather conditions. The weak demand for iron ore was also shown by the 9% YoY increase in iron ore inventories at Chinese ports, as of the end of August. In our view, the demand for iron ore might remain weak in the near term, given the targeted steel output reduction and the depressed construction activity in China
#iron_ore
Morning Bites (part 1)
🪨China’s coking coal imports rose 37% YoY in August, after the 62% YoY increase in July. The main contributor to the growth was imports from Mongolia (45% of total imports), which jumped 167% YoY in August due to easing quarantine measures at the Mongolian border. Meanwhile, imports from Russia (30% of the total) were up 60% YoY. The increase in coking coal imports might have been driven by two key factors. First, China’s steel production recovered slightly in August (+0.5% YoY; +3% MoM). Second, coking coal demand might have been supported by its use for thermal power generation, given the limited availability of thermal coal
#coal
🪨China’s coking coal imports rose 37% YoY in August, after the 62% YoY increase in July. The main contributor to the growth was imports from Mongolia (45% of total imports), which jumped 167% YoY in August due to easing quarantine measures at the Mongolian border. Meanwhile, imports from Russia (30% of the total) were up 60% YoY. The increase in coking coal imports might have been driven by two key factors. First, China’s steel production recovered slightly in August (+0.5% YoY; +3% MoM). Second, coking coal demand might have been supported by its use for thermal power generation, given the limited availability of thermal coal
#coal
Morning Bites (part 2)
📈NLMK has announced a 4% increase in the domestic HRC price for traders to RUB 45.1k/t (USD 739/t) excluding VAT, Metal Expert reports. According to Metal Expert, the price was supported by the maintenance works scheduled for next month. NLMK’s price is roughly in line with the new price level recently announced by Severstal. We note that, given the price increase, the domestic premium might widen to USD 178/t, from the current USD 150/t (other things being equal)
#steel #rusteel
📈NLMK has announced a 4% increase in the domestic HRC price for traders to RUB 45.1k/t (USD 739/t) excluding VAT, Metal Expert reports. According to Metal Expert, the price was supported by the maintenance works scheduled for next month. NLMK’s price is roughly in line with the new price level recently announced by Severstal. We note that, given the price increase, the domestic premium might widen to USD 178/t, from the current USD 150/t (other things being equal)
#steel #rusteel
Morning Bites
🔗Global crude steel output fell 3% YoY to 151mnt in August, with the rate of decline decelerating from the 6.5% YoY in July, according to the World Steel Association. This was driven by the slight recovery in China’s steel production: +0.5% YoY in August vs. -6.4% YoY in July. China accounted for 56% of global steel production in August (vs. 55% in July). Meanwhile, the decline in ex-China steel production deepened to 7.1% YoY, from 6.6% YoY in July. Steel output in the EU dropped 13.3% YoY, with the decline rate accelerating from 6.7% YoY in July, due to production stoppages amid high energy prices. Meanwhile, US steel production contracted 7.1% YoY (vs. -6.4% YoY in July). However, the decline in Russia’s steel output slowed to 5.5% YoY in August, from 13.2% YoY in July
📉In our view, global steel output might continue to decline in the near term due to the economic slowdown
#steel
🔗Global crude steel output fell 3% YoY to 151mnt in August, with the rate of decline decelerating from the 6.5% YoY in July, according to the World Steel Association. This was driven by the slight recovery in China’s steel production: +0.5% YoY in August vs. -6.4% YoY in July. China accounted for 56% of global steel production in August (vs. 55% in July). Meanwhile, the decline in ex-China steel production deepened to 7.1% YoY, from 6.6% YoY in July. Steel output in the EU dropped 13.3% YoY, with the decline rate accelerating from 6.7% YoY in July, due to production stoppages amid high energy prices. Meanwhile, US steel production contracted 7.1% YoY (vs. -6.4% YoY in July). However, the decline in Russia’s steel output slowed to 5.5% YoY in August, from 13.2% YoY in July
📉In our view, global steel output might continue to decline in the near term due to the economic slowdown
#steel
Morning Bites (part 1)
📈CISA mills daily crude steel output rose 2.2% in the second ten days of September from the first ten days of the month. This also constituted 7.7% YoY growth (vs. +2.7% YoY in early September). Industry sources say that production was increased in anticipation of the seasonal strengthening of steel demand in September - October. Moreover, according to market sources, China’s government is unlikely to order steel output cuts during these months. However, we do not see any reason for the steel output growth (unless from the low base), given the weak steel demand from the construction sector. In mid-September, the increased production was not supported by steel demand, as steel inventories increased 3.5% through the period and were up 32.8% YoY as of 20 September
#steel
📈CISA mills daily crude steel output rose 2.2% in the second ten days of September from the first ten days of the month. This also constituted 7.7% YoY growth (vs. +2.7% YoY in early September). Industry sources say that production was increased in anticipation of the seasonal strengthening of steel demand in September - October. Moreover, according to market sources, China’s government is unlikely to order steel output cuts during these months. However, we do not see any reason for the steel output growth (unless from the low base), given the weak steel demand from the construction sector. In mid-September, the increased production was not supported by steel demand, as steel inventories increased 3.5% through the period and were up 32.8% YoY as of 20 September
#steel
Morning Bites (part 2)
💍China’s jewellery and watch retail sales increased 7% YoY in August, following the 22% YoY jump in July. According to Rough & Polished, the solid performance of China’s jewellery sales was caused by the gradual easing of travel and quarantine rules in recent months. Growing jewellery sales in China is a positive factor for diamond demand. However, the unstable global economic environment still poses risks for downstream demand
⛔️Trevali has decided to close the Perkoa zinc mine in Burkina Faso following a deadly flood in April. Operations at the mine have been halted since then. We note that Perkoa accounts for ~0.5% of global zinc production. Since August, trading of the company’s common shares on the Toronto Stock Exchange has been halted, as the company had filed for creditor protection
#diamonds #zinc
💍China’s jewellery and watch retail sales increased 7% YoY in August, following the 22% YoY jump in July. According to Rough & Polished, the solid performance of China’s jewellery sales was caused by the gradual easing of travel and quarantine rules in recent months. Growing jewellery sales in China is a positive factor for diamond demand. However, the unstable global economic environment still poses risks for downstream demand
⛔️Trevali has decided to close the Perkoa zinc mine in Burkina Faso following a deadly flood in April. Operations at the mine have been halted since then. We note that Perkoa accounts for ~0.5% of global zinc production. Since August, trading of the company’s common shares on the Toronto Stock Exchange has been halted, as the company had filed for creditor protection
#diamonds #zinc
Morning Bites
📈Severstal has announced a further 2% increase in the domestic HRC price for traders to RUB 45.4k/t (USD 783/t) excluding VAT, Metal Expert reports. Earlier this month, the company had already announced a 1% rise in the HRC price for traders. The new level is slightly above the price set by NLMK last week. According to Metal Expert, the price increases were mainly caused by supply limitations amid the maintenance works planned for the following month. We note that, given the price increase, the domestic premium might widen to USD 178/t, from USD 163/t at present (other things being equal)
#steel #rusteel
📈Severstal has announced a further 2% increase in the domestic HRC price for traders to RUB 45.4k/t (USD 783/t) excluding VAT, Metal Expert reports. Earlier this month, the company had already announced a 1% rise in the HRC price for traders. The new level is slightly above the price set by NLMK last week. According to Metal Expert, the price increases were mainly caused by supply limitations amid the maintenance works planned for the following month. We note that, given the price increase, the domestic premium might widen to USD 178/t, from USD 163/t at present (other things being equal)
#steel #rusteel
Morning Bites
🚘China’s authorities have decided to extend EV purchase tax exemptions until the end of 2023. China began exempting EV buyers from a 10% purchase tax in 2014 and initially planned to finish the initiative by the end of 2022. However, to help the economy recover from various anti COVID measures, the exemptions were extended. Given that in 2021 China accounted for 49% of global EV sales, this might be a positive factor for the demand for battery metals (nickel, lithium and cobalt). In recent months, the country’s new EV sales experienced solid growth: up 104% YoY in August and up 118% YoY in 8mo22 -- despite the COVID lockdowns and unfavourable economic conditions
#EV #nickel #lithium #cobalt
🚘China’s authorities have decided to extend EV purchase tax exemptions until the end of 2023. China began exempting EV buyers from a 10% purchase tax in 2014 and initially planned to finish the initiative by the end of 2022. However, to help the economy recover from various anti COVID measures, the exemptions were extended. Given that in 2021 China accounted for 49% of global EV sales, this might be a positive factor for the demand for battery metals (nickel, lithium and cobalt). In recent months, the country’s new EV sales experienced solid growth: up 104% YoY in August and up 118% YoY in 8mo22 -- despite the COVID lockdowns and unfavourable economic conditions
#EV #nickel #lithium #cobalt
Morning Bites
📈Russian gold output rose 7.9% YoY in August, with the growth rate accelerating from 5.7% YoY in July, Rosstat reports. However, in 8mo22, the country’s gold production decreased 1.9% YoY. Given that in 2021 Russia accounted for some 9% of global gold mine output, the production recovery might be a slightly negative factor for gold prices
🌫The authorities of China’s steelmaking city Tangshan have ordered a 30-50% reduction of sinter plant utilisation until 1 October. The restrictions were introduced amid worsening air quality in the region. According to industry sources, these measures would affect China’s steel supply only if they are extended beyond 1 October, since the factories in Tangshan have sinter inventories for more than one week of operation. We note that Tangshan accounts for 13% of China’s steel production
#gold #steel
📈Russian gold output rose 7.9% YoY in August, with the growth rate accelerating from 5.7% YoY in July, Rosstat reports. However, in 8mo22, the country’s gold production decreased 1.9% YoY. Given that in 2021 Russia accounted for some 9% of global gold mine output, the production recovery might be a slightly negative factor for gold prices
🌫The authorities of China’s steelmaking city Tangshan have ordered a 30-50% reduction of sinter plant utilisation until 1 October. The restrictions were introduced amid worsening air quality in the region. According to industry sources, these measures would affect China’s steel supply only if they are extended beyond 1 October, since the factories in Tangshan have sinter inventories for more than one week of operation. We note that Tangshan accounts for 13% of China’s steel production
#gold #steel
Morning Bites
🏦Global central banks were net purchasers of 20t of gold in August (vs. 39t of purchases in July), World Gold Council reports. The most significant was Turkey, which bought 8.9t (vs. 11.6t in July). Meanwhile, Uzbekistan purchased 8.7t (the same as in July). The biggest seller was the Czech Republic (0.2t of gold). However, despite central banks’ positive net purchases, in August, gold prices continued to be pressured by net outflows from gold-backed ETFs
#gold
🏦Global central banks were net purchasers of 20t of gold in August (vs. 39t of purchases in July), World Gold Council reports. The most significant was Turkey, which bought 8.9t (vs. 11.6t in July). Meanwhile, Uzbekistan purchased 8.7t (the same as in July). The biggest seller was the Czech Republic (0.2t of gold). However, despite central banks’ positive net purchases, in August, gold prices continued to be pressured by net outflows from gold-backed ETFs
#gold
Morning Bites
🚘Global EV sales (passenger cars and light-duty vehicles) increased 70% YoY in August, after the 63% YoY growth in July, according to Rho Motion. The growth was mainly driven by the 104% YoY increase in China’s sales (vs. +117% YoY in July). US EV sales also saw a strong performance, with the growth rate accelerating to 30% YoY in August, from 13% YoY in July. At the same time, EV sales in the EU grew 5% YoY, reversing from the 2% YoY decline in July. The strong performance of global EV sales is supportive for the demand for battery metals (nickel, lithium and cobalt)
#EV #nickel #lithium #cobalt
🚘Global EV sales (passenger cars and light-duty vehicles) increased 70% YoY in August, after the 63% YoY growth in July, according to Rho Motion. The growth was mainly driven by the 104% YoY increase in China’s sales (vs. +117% YoY in July). US EV sales also saw a strong performance, with the growth rate accelerating to 30% YoY in August, from 13% YoY in July. At the same time, EV sales in the EU grew 5% YoY, reversing from the 2% YoY decline in July. The strong performance of global EV sales is supportive for the demand for battery metals (nickel, lithium and cobalt)
#EV #nickel #lithium #cobalt
Morning Bites (part 1)
🌏Global manufacturing PMIs slid in September. The Eurozone Markit Manufacturing PMI dropped to 48.4, from 49.6 in August, (slightly below the preliminary reading of 48.5). The US ISM manufacturing PMI declined to 50.9, from 52.8 in August, falling short of the Bloomberg consensus forecast of 52.0
However, China's official PMI increased to 50.1, from 49.4 in August, exceeding the consensus estimate of 49.6. Nevertheless, China's Caixin manufacturing PMI fell to 48.1, from 49.5 a month ago, underperforming the market forecast of 49.5
Below-50 manufacturing PMI in Eurozone indicates a manufacturing sector contraction in this region, which is negative for the demand for industrial metals. The drop in the US manufacturing PMI implies softening of manufacturing activity in the US. However, the Chinese PMIs provide mixed evidence regarding the state of manufacturing sector in the country
#PMIs
🌏Global manufacturing PMIs slid in September. The Eurozone Markit Manufacturing PMI dropped to 48.4, from 49.6 in August, (slightly below the preliminary reading of 48.5). The US ISM manufacturing PMI declined to 50.9, from 52.8 in August, falling short of the Bloomberg consensus forecast of 52.0
However, China's official PMI increased to 50.1, from 49.4 in August, exceeding the consensus estimate of 49.6. Nevertheless, China's Caixin manufacturing PMI fell to 48.1, from 49.5 a month ago, underperforming the market forecast of 49.5
Below-50 manufacturing PMI in Eurozone indicates a manufacturing sector contraction in this region, which is negative for the demand for industrial metals. The drop in the US manufacturing PMI implies softening of manufacturing activity in the US. However, the Chinese PMIs provide mixed evidence regarding the state of manufacturing sector in the country
#PMIs
Morning Bites (part 2)
💍Hong Kong jewellery and watch sales rose 4% YoY in August, following the 30% YoY jump in July. According to a Hong Kong government spokesperson, the moderating COVID-19 situation, improving labour market conditions and disbursement of consumption vouchers might continue to support HK retail sales in the short term. This could be a positive factor for the demand for diamonds
#diamonds
💍Hong Kong jewellery and watch sales rose 4% YoY in August, following the 30% YoY jump in July. According to a Hong Kong government spokesperson, the moderating COVID-19 situation, improving labour market conditions and disbursement of consumption vouchers might continue to support HK retail sales in the short term. This could be a positive factor for the demand for diamonds
#diamonds