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
Morning Bites (part 1)
🚘US light vehicle sales were up 10% YoY in September from the low base (vs. +3% YoY in August). However, they were 13% below the 2019 level. Seasonally-adjusted sales volumes rose 11% YoY in September (21% below the 2019 level). Given the inflationary pressures, the outlook on car sales remains negative, which is an adverse factor for PGM demand
🔗Turkey’s steel production dropped 21% YoY in August (the same as in July). Meanwhile, Turkey’s apparent steel consumption decreased 12% YoY, after the 11% YoY decline in July. Since production fell more significantly than consumption, steel exports were down 25% YoY, while imports fell only 7% YoY. TCUD expects the country’s steel production to fall even further in 4Q22 due to energy price hikes
#cars #steel
🚘US light vehicle sales were up 10% YoY in September from the low base (vs. +3% YoY in August). However, they were 13% below the 2019 level. Seasonally-adjusted sales volumes rose 11% YoY in September (21% below the 2019 level). Given the inflationary pressures, the outlook on car sales remains negative, which is an adverse factor for PGM demand
🔗Turkey’s steel production dropped 21% YoY in August (the same as in July). Meanwhile, Turkey’s apparent steel consumption decreased 12% YoY, after the 11% YoY decline in July. Since production fell more significantly than consumption, steel exports were down 25% YoY, while imports fell only 7% YoY. TCUD expects the country’s steel production to fall even further in 4Q22 due to energy price hikes
#cars #steel
Morning Bites (part 2)
🛑Nyrstar plans to shut its Port Pirie lead smelter in Australia for 55 days. According to Reuters, during the period the company plans to implement capital expenditure to improve the smelter's emissions and operational performance. Given that it accounts for ~1.4% of global refined lead production, this might be a slightly positive factor for lead prices
#lead
🛑Nyrstar plans to shut its Port Pirie lead smelter in Australia for 55 days. According to Reuters, during the period the company plans to implement capital expenditure to improve the smelter's emissions and operational performance. Given that it accounts for ~1.4% of global refined lead production, this might be a slightly positive factor for lead prices
#lead
Morning Bites
💎De Beers has reported sales of USD 500mn at its 8th cycle in 2022. This was 2% above the historical average and also 2% higher YoY (vs. +22% YoY at the 7th cycle in 2022). According to De Beers CEO Bruce Cleaver, the results were in line with the company’s expectations. Cycle 8 sales decreased 22% relative to cycle 7, as India’s polishing factories prepared for seasonal closures ahead of the Diwali holidays. We note, however, that the deceleration in the YoY growth rate might imply some softening of diamond demand amid inflationary pressures
🛑Glencore plans to place its Nordenham zinc smelter in Germany on care and maintenance from 1 November. According to the company, the production halt was caused by the energy crisis. Previously, Nyrstar closed its Budel zinc smelter in the Netherlands for the same reason. Given that the two smelters combined account for ~3% of global zinc production, this might be slightly positive for zinc prices
#diamonds #zinc
💎De Beers has reported sales of USD 500mn at its 8th cycle in 2022. This was 2% above the historical average and also 2% higher YoY (vs. +22% YoY at the 7th cycle in 2022). According to De Beers CEO Bruce Cleaver, the results were in line with the company’s expectations. Cycle 8 sales decreased 22% relative to cycle 7, as India’s polishing factories prepared for seasonal closures ahead of the Diwali holidays. We note, however, that the deceleration in the YoY growth rate might imply some softening of diamond demand amid inflationary pressures
🛑Glencore plans to place its Nordenham zinc smelter in Germany on care and maintenance from 1 November. According to the company, the production halt was caused by the energy crisis. Previously, Nyrstar closed its Budel zinc smelter in the Netherlands for the same reason. Given that the two smelters combined account for ~3% of global zinc production, this might be slightly positive for zinc prices
#diamonds #zinc