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
Vale 3Q22 results – modest, behind consensus and us
📉Vale 3Q22 revenue declined 19% YoY, standing 9% below our estimates due to lower iron ore sales than we had expected (even though the realised price for fines was 6% above our estimates). EBITDA was 24% and 18% behind consensus and our estimates due to lower sales
💰Iron ore cash costs excl. 3rd party purchases, despite higher diesel prices, decreased 7% QoQ to USD 19.4/t, supported by the positive effects of strong production and conducive FX movements
💵The company announced the completion of 25% of the 3rd share buyback programme, launched in April 2022, for a total consideration of USD 1.9bn (3% yield so far)
📉Given subdued iron ore prices and elevated freight rates, 4Q22 EBITDA might further see some single digit QoQ decrease at spot prices
$VALE #iron_ore
https://metals-wire.com:3000/company/VALE_US/
📉Vale 3Q22 revenue declined 19% YoY, standing 9% below our estimates due to lower iron ore sales than we had expected (even though the realised price for fines was 6% above our estimates). EBITDA was 24% and 18% behind consensus and our estimates due to lower sales
💰Iron ore cash costs excl. 3rd party purchases, despite higher diesel prices, decreased 7% QoQ to USD 19.4/t, supported by the positive effects of strong production and conducive FX movements
💵The company announced the completion of 25% of the 3rd share buyback programme, launched in April 2022, for a total consideration of USD 1.9bn (3% yield so far)
📉Given subdued iron ore prices and elevated freight rates, 4Q22 EBITDA might further see some single digit QoQ decrease at spot prices
$VALE #iron_ore
https://metals-wire.com:3000/company/VALE_US/
US Steel 3Q22 results - falling shipment volumes
📉3Q22 revenues fell 13% YoY (-2% vs. our forecast) due to the 10% YoY decline in the total steel shipment volumes and the YoY decrease in average realised prices. 3Q22 adjusted EBITDA dropped 58% YoY, (+2% vs. the consensus; -7% vs. our forecast). The decline was caused by the weaker revenues and increased costs
💰The Europe segment faced the largest cost increase of 37% YoY. Meanwhile, the Mini Mill and Tubular segments’ unit costs rose 33% and 17% YoY, respectively
🚢In terms of shipment volumes, the greatest decline was experienced by the Europe segment (down 19% YoY). Steel shipments from the Mini Mill and the Flat-Rolled segments fell 13% and 7% YoY, respectively
❗️Given the weak demand and high costs, the company’s EBITDA might remain low in 4Q22, on spot prices
❗️We note that the weak results in Europe (minus USD 12mn 3Q22 EBITDA) might be a negative cross-read on MT results (due on 10 Nov)
$X #steel
https://metals-wire.com:3000/company/X_US/
📉3Q22 revenues fell 13% YoY (-2% vs. our forecast) due to the 10% YoY decline in the total steel shipment volumes and the YoY decrease in average realised prices. 3Q22 adjusted EBITDA dropped 58% YoY, (+2% vs. the consensus; -7% vs. our forecast). The decline was caused by the weaker revenues and increased costs
💰The Europe segment faced the largest cost increase of 37% YoY. Meanwhile, the Mini Mill and Tubular segments’ unit costs rose 33% and 17% YoY, respectively
🚢In terms of shipment volumes, the greatest decline was experienced by the Europe segment (down 19% YoY). Steel shipments from the Mini Mill and the Flat-Rolled segments fell 13% and 7% YoY, respectively
❗️Given the weak demand and high costs, the company’s EBITDA might remain low in 4Q22, on spot prices
❗️We note that the weak results in Europe (minus USD 12mn 3Q22 EBITDA) might be a negative cross-read on MT results (due on 10 Nov)
$X #steel
https://metals-wire.com:3000/company/X_US/
👍1
Morning Bites
🔗Severstal has announced a further 4% decrease in Russian domestic rebar prices for November to RUB 35k/t (USD 576/t) (excl. VAT), following the recently announced 2% reduction. The new price is in line with the November rebar prices that NLMK announced last week. According to Metal Expert, this was driven by the high level of inventories and weakening domestic steel demand. Given the decline in prices, the rebar-billet premium might drop to USD 60/t, from USD 82/t at present, other things being equal (vs. the historical average of a USD 20/t premium). Currently, the billet premium to slab export prices is USD 25/t (vs. the historical average of USD 0/t)
#rusteel
https://metals-wire.com:3000/sector/Steel
🔗Severstal has announced a further 4% decrease in Russian domestic rebar prices for November to RUB 35k/t (USD 576/t) (excl. VAT), following the recently announced 2% reduction. The new price is in line with the November rebar prices that NLMK announced last week. According to Metal Expert, this was driven by the high level of inventories and weakening domestic steel demand. Given the decline in prices, the rebar-billet premium might drop to USD 60/t, from USD 82/t at present, other things being equal (vs. the historical average of a USD 20/t premium). Currently, the billet premium to slab export prices is USD 25/t (vs. the historical average of USD 0/t)
#rusteel
https://metals-wire.com:3000/sector/Steel
Week ahead data releases in M&M
As the reporting season continues, two major gold miners (among others) are due to report their earnings. For most of the names publishing this week, our 3Q22 EBITDA forecasts are slightly above the consensus estimates
#reporting_season
https://metals-wire.com:3000/events
As the reporting season continues, two major gold miners (among others) are due to report their earnings. For most of the names publishing this week, our 3Q22 EBITDA forecasts are slightly above the consensus estimates
#reporting_season
https://metals-wire.com:3000/events
Morning Bites
⛰Mountain Province has reported a 22% YoY decrease in rough diamond sales volumes, to 805kct for USD 83mn, in 3Q22. The average realised price of USD 103/ct was down 21% QoQ, but up 43% YoY. However, adjusting for the mix of goods sold, on a like-for-like basis, the average value per carat was up 2% QoQ. Even though the company stated that its sales continued to be resilient, it acknowledged that rough diamond market prices had stabilised through the period. This might have been caused by the softer demand amid the unfavourable economic environment, and that might further negatively affect downstream diamond demand
Meanwhile, the company’s rough diamond output fell 7% YoY to 711kct in 3Q22, on the back of the continued impact of the operational challenges the company experienced in 2Q22
#diamonds
⛰Mountain Province has reported a 22% YoY decrease in rough diamond sales volumes, to 805kct for USD 83mn, in 3Q22. The average realised price of USD 103/ct was down 21% QoQ, but up 43% YoY. However, adjusting for the mix of goods sold, on a like-for-like basis, the average value per carat was up 2% QoQ. Even though the company stated that its sales continued to be resilient, it acknowledged that rough diamond market prices had stabilised through the period. This might have been caused by the softer demand amid the unfavourable economic environment, and that might further negatively affect downstream diamond demand
Meanwhile, the company’s rough diamond output fell 7% YoY to 711kct in 3Q22, on the back of the continued impact of the operational challenges the company experienced in 2Q22
#diamonds
CSN 3Q22 results - broadly in line with expectations
✏️3Q22 revenues rose 6% YoY (in line with our forecast) due to the increased sales volumes. Adjusted EBITDA was down 37% YoY in 3Q22 (-1% vs. the consensus and -4% vs. us), driven by the YoY cost increase
⛏The company reduced its 2022 iron ore production guidance 8% and reiterated the steel sales guidance
❗️On our numbers, the 4Q22 EBITDA might be close to the 3Q22 level, at spot prices
$SID #iron_ore
https://metals-wire.com:3000/company/SID_US/
✏️3Q22 revenues rose 6% YoY (in line with our forecast) due to the increased sales volumes. Adjusted EBITDA was down 37% YoY in 3Q22 (-1% vs. the consensus and -4% vs. us), driven by the YoY cost increase
⛏The company reduced its 2022 iron ore production guidance 8% and reiterated the steel sales guidance
❗️On our numbers, the 4Q22 EBITDA might be close to the 3Q22 level, at spot prices
$SID #iron_ore
https://metals-wire.com:3000/company/SID_US/
Newmont 3Q22 results miss forecasts
📉3Q22 revenues declined 9% YoY, 10% below our forecast on sales volumes that were 10% less than we had expected. 3Q22 adjusted EBITDA was down 35% YoY to USD 850mn, mainly as a result of higher costs. Adjusted EBITDA was -19% vs. the consensus and -26% vs. our forecast, as the negative effect of lower than expected sales was exacerbated by the higher costs
💵In 3Q22, gold AISC rose 13% YoY (+6% QoQ) to USD 1,271/oz
⛏The company reaffirmed its latest 2022 guidance, released on 25 July
❗️Given rising costs, we believe the company’s EBITDA might further decline in 4Q22, at spot prices
$NEM #gold
https://metals-wire.com:3000/company/NEM_US/
📉3Q22 revenues declined 9% YoY, 10% below our forecast on sales volumes that were 10% less than we had expected. 3Q22 adjusted EBITDA was down 35% YoY to USD 850mn, mainly as a result of higher costs. Adjusted EBITDA was -19% vs. the consensus and -26% vs. our forecast, as the negative effect of lower than expected sales was exacerbated by the higher costs
💵In 3Q22, gold AISC rose 13% YoY (+6% QoQ) to USD 1,271/oz
⛏The company reaffirmed its latest 2022 guidance, released on 25 July
❗️Given rising costs, we believe the company’s EBITDA might further decline in 4Q22, at spot prices
$NEM #gold
https://metals-wire.com:3000/company/NEM_US/
Morning Bites (part 1)
🏦Global central banks were net purchasers of 30t of gold in September (vs. 20t of purchases in August), the World Gold Council reports. The biggest buyer was Turkey, which bought 11t in September (vs. 9t in August), while Uzbekistan purchased 9t (the same as in August). The only seller was Mongolia, disposing of 0.4t of gold in September. However, despite central banks’ increased net purchases, gold prices continued to be pressured in September by net outflows from gold-backed ETFs
#gold
🏦Global central banks were net purchasers of 30t of gold in September (vs. 20t of purchases in August), the World Gold Council reports. The biggest buyer was Turkey, which bought 11t in September (vs. 9t in August), while Uzbekistan purchased 9t (the same as in August). The only seller was Mongolia, disposing of 0.4t of gold in September. However, despite central banks’ increased net purchases, gold prices continued to be pressured in September by net outflows from gold-backed ETFs
#gold
Morning Bites (part 2)
🏆Global physical gold demand rose 49% YoY to 1,350t in 3Q22, after being flat YoY in 2Q22, according to the World Gold Council. At the same time, global total gold demand was up 27% YoY (vs. -8% YoY in 2Q22). The growth of physical gold demand was mainly driven by the 341% YoY increase in the demand from central banks and other institutions. At the same time, the demand for gold jewellery rose 10% YoY in 3Q22 (vs. +5% YoY in 2Q22), driven by the YoY increases of 17% in India, 5% in China and 19% in the Middle East. Meanwhile, gold mine production rose 2% YoY in 3Q22, the same as in 2Q22
#gold
🏆Global physical gold demand rose 49% YoY to 1,350t in 3Q22, after being flat YoY in 2Q22, according to the World Gold Council. At the same time, global total gold demand was up 27% YoY (vs. -8% YoY in 2Q22). The growth of physical gold demand was mainly driven by the 341% YoY increase in the demand from central banks and other institutions. At the same time, the demand for gold jewellery rose 10% YoY in 3Q22 (vs. +5% YoY in 2Q22), driven by the YoY increases of 17% in India, 5% in China and 19% in the Middle East. Meanwhile, gold mine production rose 2% YoY in 3Q22, the same as in 2Q22
#gold
Morning Bites (part 1)
🌏Global manufacturing PMIs continued to fall in October. The Eurozone Markit Manufacturing PMI dropped to 46.4, from 48.4 in September (slightly below the preliminary reading of 46.6). The US ISM manufacturing PMI declined to 50.2 (from 50.9 in September), the lowest level since May 2020, but slightly above the consensus estimate of 50.0
🇨🇳China's official PMI dropped to 49.2 (from 50.1 in September), which was below the market forecast of 50.0. Meanwhile, China's Caixin manufacturing PMI rose to 49.2, from 48.1 a month ago, slightly outperforming the consensus estimate of 49.0
❗️Below-50 manufacturing PMIs in the Eurozone and China indicate a manufacturing sector contraction in these regions, which is negative for the demand for industrial metals. At the same time, the decline in the US manufacturing PMI implies that manufacturing activity in the US is softening
#PMIs
🌏Global manufacturing PMIs continued to fall in October. The Eurozone Markit Manufacturing PMI dropped to 46.4, from 48.4 in September (slightly below the preliminary reading of 46.6). The US ISM manufacturing PMI declined to 50.2 (from 50.9 in September), the lowest level since May 2020, but slightly above the consensus estimate of 50.0
🇨🇳China's official PMI dropped to 49.2 (from 50.1 in September), which was below the market forecast of 50.0. Meanwhile, China's Caixin manufacturing PMI rose to 49.2, from 48.1 a month ago, slightly outperforming the consensus estimate of 49.0
❗️Below-50 manufacturing PMIs in the Eurozone and China indicate a manufacturing sector contraction in these regions, which is negative for the demand for industrial metals. At the same time, the decline in the US manufacturing PMI implies that manufacturing activity in the US is softening
#PMIs
Morning Bites (part 2)
🚘US light vehicle sales were up 10% YoY in October from the low base (the same as in September). However, they were 13% below the 2019 level. Seasonally adjusted sales volumes rose 15% YoY in September (11% below the 2019 level). According to Reuters, US car sales were supported by the easing of supply chain disruptions. Our outlook on US car sales remains negative due to inflationary pressures, which is negative for PGM demand
🔗Turkey’s steel production fell 19% YoY in September (vs. -21% YoY in August). Meanwhile, Turkey’s apparent steel consumption decreased 3% YoY (vs. -12% YoY in August). Steel exports dropped 31% YoY, while steel imports were up 1% YoY in September. According to TCUD, the decline in production and exports was caused by the increased electricity costs
#cars #steel
🚘US light vehicle sales were up 10% YoY in October from the low base (the same as in September). However, they were 13% below the 2019 level. Seasonally adjusted sales volumes rose 15% YoY in September (11% below the 2019 level). According to Reuters, US car sales were supported by the easing of supply chain disruptions. Our outlook on US car sales remains negative due to inflationary pressures, which is negative for PGM demand
🔗Turkey’s steel production fell 19% YoY in September (vs. -21% YoY in August). Meanwhile, Turkey’s apparent steel consumption decreased 3% YoY (vs. -12% YoY in August). Steel exports dropped 31% YoY, while steel imports were up 1% YoY in September. According to TCUD, the decline in production and exports was caused by the increased electricity costs
#cars #steel
🥰1
🏆Barrick 3Q22 results met our expectations
📉3Q22 revenues declined 11% YoY (+1% vs. our forecast). Adjusted EBITDA was down 31% YoY in 3Q22 (+5% vs. consensus; in line with our forecast) due to lower revenues and increased costs
💵In 3Q22, gold AISC rose 23% YoY (+5% QoQ, after the 4% QoQ growth in 2Q22) to USD 1,269/oz
⛏The company has reiterated its production and cost guidance for 2022
❗️On our numbers, the company’s 4Q22 adjusted EBITDA might be close to the 3Q22 level, at spot prices
$GOLD #gold
https://metals-wire.com:3000/company/GOLD_US/
📉3Q22 revenues declined 11% YoY (+1% vs. our forecast). Adjusted EBITDA was down 31% YoY in 3Q22 (+5% vs. consensus; in line with our forecast) due to lower revenues and increased costs
💵In 3Q22, gold AISC rose 23% YoY (+5% QoQ, after the 4% QoQ growth in 2Q22) to USD 1,269/oz
⛏The company has reiterated its production and cost guidance for 2022
❗️On our numbers, the company’s 4Q22 adjusted EBITDA might be close to the 3Q22 level, at spot prices
$GOLD #gold
https://metals-wire.com:3000/company/GOLD_US/
👍1
🗞Today China published preliminary import/export statistics for October. 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)
🚗💨Internal combustion engine (ICE) car registrations in the EU fell 4% YoY in 3Q22 from the low base (after the 25% YoY decline in 2Q22). Petrol car sales were down 3% YoY in 3Q22 (vs. -23% YoY in 2Q22), while diesel car registrations dropped 5% YoY (vs. -29% YoY). Diesel cars constituted 28% of ICE car sales in 3Q22 (vs. 29% in 2Q22). Sluggish ICE car sales are unfavourable for PGM demand
🚘EU and UK EV sales rose 5% YoY in 3Q22, reversing from the 2% YoY decline in 2Q22. BEV sales rose 16% YoY (vs. +11% YoY in 2Q22), while PHEV sales dropped 9% YoY (vs. -16% YoY). The share of BEVs in total EV sales rose to 62% in 3Q22, from 57% in 2Q22. The slight recovery in EU and UK EV sales is moderately positive for the demand for battery metals: nickel, lithium and cobalt
#cars #EV #nickel #lithium #cobalt
🚗💨Internal combustion engine (ICE) car registrations in the EU fell 4% YoY in 3Q22 from the low base (after the 25% YoY decline in 2Q22). Petrol car sales were down 3% YoY in 3Q22 (vs. -23% YoY in 2Q22), while diesel car registrations dropped 5% YoY (vs. -29% YoY). Diesel cars constituted 28% of ICE car sales in 3Q22 (vs. 29% in 2Q22). Sluggish ICE car sales are unfavourable for PGM demand
🚘EU and UK EV sales rose 5% YoY in 3Q22, reversing from the 2% YoY decline in 2Q22. BEV sales rose 16% YoY (vs. +11% YoY in 2Q22), while PHEV sales dropped 9% YoY (vs. -16% YoY). The share of BEVs in total EV sales rose to 62% in 3Q22, from 57% in 2Q22. The slight recovery in EU and UK EV sales is moderately positive for the demand for battery metals: nickel, lithium and cobalt
#cars #EV #nickel #lithium #cobalt
👍1
Morning Bites (part 2)
📉Gold-backed ETFs reduced their holdings 59t through October (after outflows of 102t in September and 57t in August). The YTD net outflow reached 83t at the end of October. According to the World Gold Council (WGC), the outflows were mainly driven by hawkish monetary policies in the US and Europe. The outflows contributed to the 2% decline in the gold price through October. We note that, in annualised terms, the October net outflow might account for ~15% of the total gold demand, which is a significant negative factor that drives down gold prices, despite the growing physical gold demand
#ETF #gold
https://metals-wire.com:3000/sector/Gold
📉Gold-backed ETFs reduced their holdings 59t through October (after outflows of 102t in September and 57t in August). The YTD net outflow reached 83t at the end of October. According to the World Gold Council (WGC), the outflows were mainly driven by hawkish monetary policies in the US and Europe. The outflows contributed to the 2% decline in the gold price through October. We note that, in annualised terms, the October net outflow might account for ~15% of the total gold demand, which is a significant negative factor that drives down gold prices, despite the growing physical gold demand
#ETF #gold
https://metals-wire.com:3000/sector/Gold
👍1