Morning Bites
🏗China’s domestic excavator sales fell 25% YoY in September (vs. -26% YoY in August). Meanwhile, total excavator sales (domestic + export) increased 5% YoY in September, after being roughly flat YoY in August. As a leading indicator of construction activity, weak domestic excavator sales imply that China’s property sector might remain weak in the short term. This could be a negative factor for China’s demand for industrial metals
#global
🏗China’s domestic excavator sales fell 25% YoY in September (vs. -26% YoY in August). Meanwhile, total excavator sales (domestic + export) increased 5% YoY in September, after being roughly flat YoY in August. As a leading indicator of construction activity, weak domestic excavator sales imply that China’s property sector might remain weak in the short term. This could be a negative factor for China’s demand for industrial metals
#global
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🗞Today China has published its industrial production data for September (see the table above)
#statistics #China
https://metals-wire.com:3000/news-reports
#statistics #China
https://metals-wire.com:3000/news-reports
🗞Today China published preliminary import/export statistics for September. See preliminary data in the 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 crude steel output rose 18% YoY in September, accelerating from the 1% YoY increase in August. According to industry sources, Chinese steelmakers ramped up production due to improved steel demand. In September, apparent steel consumption rose 18% YoY, reversing from the 1% YoY decline in August
🏢China's property sales fell 16% YoY in September (vs. -23% YoY in August). Floor space starts dropped 44% YoY in September, after the 46% YoY decline in August. At the same time, personal mortgage loans were down 18% YoY in September (the same as in August). Meanwhile, property completions declined 6% YoY in September (vs. -3% YoY in August). We note that the peak of China's property crisis appears to be over, which might imply a potential recovery in the near term
#steel #aluminium #copper
https://metals-wire.com:3000/sector/Steel
🔗China’s crude steel output rose 18% YoY in September, accelerating from the 1% YoY increase in August. According to industry sources, Chinese steelmakers ramped up production due to improved steel demand. In September, apparent steel consumption rose 18% YoY, reversing from the 1% YoY decline in August
🏢China's property sales fell 16% YoY in September (vs. -23% YoY in August). Floor space starts dropped 44% YoY in September, after the 46% YoY decline in August. At the same time, personal mortgage loans were down 18% YoY in September (the same as in August). Meanwhile, property completions declined 6% YoY in September (vs. -3% YoY in August). We note that the peak of China's property crisis appears to be over, which might imply a potential recovery in the near term
#steel #aluminium #copper
https://metals-wire.com:3000/sector/Steel
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Morning Bites (part 2)
🔗China’s finished steel net exports were up 12% YoY in September, with the growth rate slowing from 32% YoY in August. Given that steel production was up 18% YoY, the deceleration in net exports might have been caused by improving domestic steel demand
📈China’s unwrought copper imports rose 26% YoY in September (the same as in August). Meanwhile, the country’s copper concentrate imports were up 8% YoY in September (vs. +20% YoY in August). According to Reuters, the growth of copper imports was driven by the anticipated increase in domestic copper demand due to the new infrastructure projects aimed at supporting China’s economic recovery
#steel #copper
https://metals-wire.com:3000/news-reports
🔗China’s finished steel net exports were up 12% YoY in September, with the growth rate slowing from 32% YoY in August. Given that steel production was up 18% YoY, the deceleration in net exports might have been caused by improving domestic steel demand
📈China’s unwrought copper imports rose 26% YoY in September (the same as in August). Meanwhile, the country’s copper concentrate imports were up 8% YoY in September (vs. +20% YoY in August). According to Reuters, the growth of copper imports was driven by the anticipated increase in domestic copper demand due to the new infrastructure projects aimed at supporting China’s economic recovery
#steel #copper
https://metals-wire.com:3000/news-reports
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Morning Bites (part 3)
📈China’s unwrought aluminium and product exports rose 1% YoY in September (vs. +10% YoY in August). Given that China’s aluminium output increased 9% YoY in September, the deceleration of exports might have been caused by the weak global demand coupled with the recovery of China’s domestic consumption
🔗Severstal has announced a 2% decrease in Russian domestic rebar prices for November to RUB 37k/t (USD 605/t) (excl. VAT). According to Metal Expert, the decline was caused by falling warehouse prices and a relatively high level of rebar inventories. Given the decline in prices, the rebar-billet premium might decrease to USD 69/t from the current level of USD 82/t, other things being equal (vs. the historical average of a USD 20/t premium). We note that currently the billet premium to slab export prices is USD 25/t (vs. the historical average of USD 0/t)
#aluminium #rusteel
https://metals-wire.com:3000/news-reports
📈China’s unwrought aluminium and product exports rose 1% YoY in September (vs. +10% YoY in August). Given that China’s aluminium output increased 9% YoY in September, the deceleration of exports might have been caused by the weak global demand coupled with the recovery of China’s domestic consumption
🔗Severstal has announced a 2% decrease in Russian domestic rebar prices for November to RUB 37k/t (USD 605/t) (excl. VAT). According to Metal Expert, the decline was caused by falling warehouse prices and a relatively high level of rebar inventories. Given the decline in prices, the rebar-billet premium might decrease to USD 69/t from the current level of USD 82/t, other things being equal (vs. the historical average of a USD 20/t premium). We note that currently the billet premium to slab export prices is USD 25/t (vs. the historical average of USD 0/t)
#aluminium #rusteel
https://metals-wire.com:3000/news-reports
Week ahead data releases in M&M
This week, we expect mostly positive surprises from global M&M names. However, on our numbers, consensus overestimates Vale profitability
#reporting_season
https://metals-wire.com:3000/events
This week, we expect mostly positive surprises from global M&M names. However, on our numbers, consensus overestimates Vale profitability
#reporting_season
https://metals-wire.com:3000/events
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Morning Bites
💍China’s jewellery and watch retail sales were up 2% YoY in September, following the 7% YoY increase in August. The deceleration in the growth rate might have been caused by the relatively stringent COVID restrictions that are still in place in China. Furthermore, the difficult global economic conditions could limit downstream diamond demand in the near term
#diamonds
https://metals-wire.com:3000/news-reports
💍China’s jewellery and watch retail sales were up 2% YoY in September, following the 7% YoY increase in August. The deceleration in the growth rate might have been caused by the relatively stringent COVID restrictions that are still in place in China. Furthermore, the difficult global economic conditions could limit downstream diamond demand in the near term
#diamonds
https://metals-wire.com:3000/news-reports
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Morning Bites (part 1)
🔗Global crude steel output rose 4% YoY to 152mnt in September, reversing from the 3% YoY decline in August, according to the World Steel Association. This recovery was driven by the 18% YoY increase in China’s steel output, which was supported by the improved demand outlook. China accounted for 57% of global steel production in September (vs. 56% in August). Meanwhile, the decline in ex-China steel production deepened to 11% YoY, from 7% YoY in August. Steel output in the EU fell 17% YoY, with the rate of decline accelerating from 11% YoY in August due to high energy costs and weak steel demand. Meanwhile, US steel production contracted 8% YoY (vs. -7% YoY in August). At the same time, the decline in Russia’s steel output accelerated to 7% YoY in September, from 6% YoY in August, according to the WSA
📉We keep our negative outlook on global steel production amid the unfavourable economic conditions
#steel
https://metals-wire.com:3000/sector/Steel
🔗Global crude steel output rose 4% YoY to 152mnt in September, reversing from the 3% YoY decline in August, according to the World Steel Association. This recovery was driven by the 18% YoY increase in China’s steel output, which was supported by the improved demand outlook. China accounted for 57% of global steel production in September (vs. 56% in August). Meanwhile, the decline in ex-China steel production deepened to 11% YoY, from 7% YoY in August. Steel output in the EU fell 17% YoY, with the rate of decline accelerating from 11% YoY in August due to high energy costs and weak steel demand. Meanwhile, US steel production contracted 8% YoY (vs. -7% YoY in August). At the same time, the decline in Russia’s steel output accelerated to 7% YoY in September, from 6% YoY in August, according to the WSA
📉We keep our negative outlook on global steel production amid the unfavourable economic conditions
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 2)
📌Global stainless steel production fell 3.5% YoY in 1H22, according to Worldstainless. The main contributor to the production decline was China (down 5.3% YoY in 1H22), which accounted for 56% of global output. At the same time, US stainless steel production dropped 15% YoY, while Europe’s output declined 5% YoY in 1H22. The output contraction might have been caused by rising costs and weak demand
📌ICSG expects a refined copper deficit of 328t in 2022 and a surplus of 155t in 2023. For 2022, ICSG revised down its supply growth rate estimate from 4.3% YoY to 2.8% YoY due to the multiple supply disruptions experienced by some key producers. According to ICSG, copper demand might rise 2.2% YoY in 2022. For 2023, ICSG forecasts a 3.3% YoY increase in copper production and 1.4% YoY growth in demand
#copper #stainless_steel
https://metals-wire.com:3000/news-reports
📌Global stainless steel production fell 3.5% YoY in 1H22, according to Worldstainless. The main contributor to the production decline was China (down 5.3% YoY in 1H22), which accounted for 56% of global output. At the same time, US stainless steel production dropped 15% YoY, while Europe’s output declined 5% YoY in 1H22. The output contraction might have been caused by rising costs and weak demand
📌ICSG expects a refined copper deficit of 328t in 2022 and a surplus of 155t in 2023. For 2022, ICSG revised down its supply growth rate estimate from 4.3% YoY to 2.8% YoY due to the multiple supply disruptions experienced by some key producers. According to ICSG, copper demand might rise 2.2% YoY in 2022. For 2023, ICSG forecasts a 3.3% YoY increase in copper production and 1.4% YoY growth in demand
#copper #stainless_steel
https://metals-wire.com:3000/news-reports
First Quantum 3Q22 results - worse than expected
📉3Q22 revenue fell 4% YoY and was 6% below our forecast due to lower sales volumes and average realised prices. EBITDA dropped 33% YoY, falling short of the consensus and our estimates by 22% and 23%, respectively, due to lower revenues and higher costs
💰In 3Q22, C1 copper cash costs rose 44% YoY (up 5% QoQ) to USD 1.82/lb, which was 14% above the upper end of the previous copper cost guidance for 2022. As a result, the company has raised its 2022 C1 copper cost guidance 15% to USD 1.7-1.8/lb
⛏The company has lowered its copper production guidance 6% to 755-785kt in 2022 mainly due to lower grades at Kansanshi. Gold production guidance was reduced 7% to 270-285koz in 2022 due to lower grades at Cobre Panama and Kansanshi
❗️Given the lowered production targets and the increased cost guidance, on spot prices, the company’s EBITDA might further decline QoQ in 4Q22
$FM #copper
https://metals-wire.com:3000/company/FM_CN/
📉3Q22 revenue fell 4% YoY and was 6% below our forecast due to lower sales volumes and average realised prices. EBITDA dropped 33% YoY, falling short of the consensus and our estimates by 22% and 23%, respectively, due to lower revenues and higher costs
💰In 3Q22, C1 copper cash costs rose 44% YoY (up 5% QoQ) to USD 1.82/lb, which was 14% above the upper end of the previous copper cost guidance for 2022. As a result, the company has raised its 2022 C1 copper cost guidance 15% to USD 1.7-1.8/lb
⛏The company has lowered its copper production guidance 6% to 755-785kt in 2022 mainly due to lower grades at Kansanshi. Gold production guidance was reduced 7% to 270-285koz in 2022 due to lower grades at Cobre Panama and Kansanshi
❗️Given the lowered production targets and the increased cost guidance, on spot prices, the company’s EBITDA might further decline QoQ in 4Q22
$FM #copper
https://metals-wire.com:3000/company/FM_CN/
Morning Bites (part 1)
📉CISA mills daily crude steel output fell 2% in mid-October from the first ten days of the month. However, this represented a 10% YoY increase. According to Metal Expert, the WoW reduction in steel output might have been partially caused by the sluggish demand from the construction sector. The weaker demand was reflected in the 9% increase in steel inventories through the period. As of 20 October, steel inventories were up 38% YoY. We maintain our negative view on China’s steel production amid the subdued demand
#steel
https://metals-wire.com:3000/sector/Steel
📉CISA mills daily crude steel output fell 2% in mid-October from the first ten days of the month. However, this represented a 10% YoY increase. According to Metal Expert, the WoW reduction in steel output might have been partially caused by the sluggish demand from the construction sector. The weaker demand was reflected in the 9% increase in steel inventories through the period. As of 20 October, steel inventories were up 38% YoY. We maintain our negative view on China’s steel production amid the subdued demand
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 2)
🪨China’s coking coal imports rose 58% YoY in September, after the 37% YoY increase in August. The major contributor to the growth was imports from Mongolia (47% of total imports), which increased 387% YoY and 12% MoM in September. According to Metal Expert, imports from Mongolia were supported by the launch of the new railway line. At the same time, imports from Russia (36% of the total) jumped 164% YoY. The increase in China’s coking coal imports might have been driven by the 18% YoY increase in China’s crude steel production in September
#coal
https://metals-wire.com:3000/sector/Coal
🪨China’s coking coal imports rose 58% YoY in September, after the 37% YoY increase in August. The major contributor to the growth was imports from Mongolia (47% of total imports), which increased 387% YoY and 12% MoM in September. According to Metal Expert, imports from Mongolia were supported by the launch of the new railway line. At the same time, imports from Russia (36% of the total) jumped 164% YoY. The increase in China’s coking coal imports might have been driven by the 18% YoY increase in China’s crude steel production in September
#coal
https://metals-wire.com:3000/sector/Coal
Teck 3Q22 results - slightly above our forecasts
✏️3Q22 revenues rose 18% YoY (6% above our estimate). This was driven by the 28% YoY increase in the coking coal realised price and the 25% YoY growth of zinc sales volumes, as the shipping season started earlier than in 2021. The 3Q22 adjusted EBITDA fell 9% YoY (+4% vs. our forecast; +5% vs. consensus). The decline was caused by increased costs
💰In 3Q22, copper and zinc cash costs rose 19% YoY and 185% YoY, respectively, though the 2022 cost guidance was reiterated
⛏The 2022 coking coal and refined zinc production guidance was lowered 6% due to operational issues
❗️The company has announced that it is to sell its 21.3% interest in Fort Hills bitumen business for CAD 1bn in cash, with the effective date of 1 Nov 2022. The segment accounted for ~10% of the company’s EBITDA in 9mo22. Given the sale of the segment, lower production guidance and rising costs, 4Q22 EBITDA might be lower than in 3Q22
$TECK #copper
https://metals-wire.com:3000/company/TECK_US/
✏️3Q22 revenues rose 18% YoY (6% above our estimate). This was driven by the 28% YoY increase in the coking coal realised price and the 25% YoY growth of zinc sales volumes, as the shipping season started earlier than in 2021. The 3Q22 adjusted EBITDA fell 9% YoY (+4% vs. our forecast; +5% vs. consensus). The decline was caused by increased costs
💰In 3Q22, copper and zinc cash costs rose 19% YoY and 185% YoY, respectively, though the 2022 cost guidance was reiterated
⛏The 2022 coking coal and refined zinc production guidance was lowered 6% due to operational issues
❗️The company has announced that it is to sell its 21.3% interest in Fort Hills bitumen business for CAD 1bn in cash, with the effective date of 1 Nov 2022. The segment accounted for ~10% of the company’s EBITDA in 9mo22. Given the sale of the segment, lower production guidance and rising costs, 4Q22 EBITDA might be lower than in 3Q22
$TECK #copper
https://metals-wire.com:3000/company/TECK_US/
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Morning Bites (part 1)
💎De Beers has reported a 4% YoY increase in rough diamond production, to 9.6mnct in 3Q22. According to the company, the production growth was mainly driven by the treatment of higher grade ore in Botswana and South Africa. The company has reiterated its 2022 production guidance of 32-34mnct (100% basis). Rough diamond sales from 3 cycles in 3Q22 totalled 8.5mnct, which was 21% above the 7.0mnct from 2 cycles in 3Q21 and 2% above the 8.3mnct from 3 cycles in 2Q22. However, the company has noted that even though the consumer demand for natural diamonds remained robust in 3Q22, the unfavourable global economic conditions and China’s COVID-related restrictions might adversely affect the demand for diamond jewellery. That is in line with our view
#diamonds
https://metals-wire.com:3000/sector/Diamonds
💎De Beers has reported a 4% YoY increase in rough diamond production, to 9.6mnct in 3Q22. According to the company, the production growth was mainly driven by the treatment of higher grade ore in Botswana and South Africa. The company has reiterated its 2022 production guidance of 32-34mnct (100% basis). Rough diamond sales from 3 cycles in 3Q22 totalled 8.5mnct, which was 21% above the 7.0mnct from 2 cycles in 3Q21 and 2% above the 8.3mnct from 3 cycles in 2Q22. However, the company has noted that even though the consumer demand for natural diamonds remained robust in 3Q22, the unfavourable global economic conditions and China’s COVID-related restrictions might adversely affect the demand for diamond jewellery. That is in line with our view
#diamonds
https://metals-wire.com:3000/sector/Diamonds
Morning Bites (part 2)
📉China’s ROM iron ore output fell 7% YoY in September (vs. -4% YoY in August) despite the country's crude steel production increasing 18% YoY. According to Metal Expert, the iron ore demand from steelmakers was met by a 4% YoY increase in iron ore imports and the use of the inventories that, nevertheless, remained above the 2021 level in late September. We keep our negative outlook on China’s iron ore production due to the weak demand for steel
#iron_ore
https://metals-wire.com:3000/sector/Iron_ore
📉China’s ROM iron ore output fell 7% YoY in September (vs. -4% YoY in August) despite the country's crude steel production increasing 18% YoY. According to Metal Expert, the iron ore demand from steelmakers was met by a 4% YoY increase in iron ore imports and the use of the inventories that, nevertheless, remained above the 2021 level in late September. We keep our negative outlook on China’s iron ore production due to the weak demand for steel
#iron_ore
https://metals-wire.com:3000/sector/Iron_ore