Morning Bites (part 1)
🌏Global manufacturing PMIs showed mixed dynamics in February. The Eurozone Markit Manufacturing PMI decreased slightly to 48.5 (from 48.8 in January, in line with consensus). Meanwhile, the US ISM manufacturing PMI inched up to 47.7 (from 47.4, but still below the consensus estimate of 48.0)
🇨🇳At the same time, China's official PMI surged to 52.6 in February (from 50.1 in January), substantially outperforming the market forecast of 50.5. China's Caixin manufacturing PMI also increased, to 51.6 (from 49.2), beating the consensus estimate of 50.2
❗️Below-50 manufacturing PMIs in the US and Eurozone indicate a manufacturing sector contraction in these regions, which is negative for the demand for industrial metals. At the same time, upbeat Chinese PMIs provide some positive read-across on the country's manufacturing sector. This underpins our view on higher demand for industrial metals, amid the reopening in China
#PMIs
https://metals-wire.com:3000/news-reports
🌏Global manufacturing PMIs showed mixed dynamics in February. The Eurozone Markit Manufacturing PMI decreased slightly to 48.5 (from 48.8 in January, in line with consensus). Meanwhile, the US ISM manufacturing PMI inched up to 47.7 (from 47.4, but still below the consensus estimate of 48.0)
🇨🇳At the same time, China's official PMI surged to 52.6 in February (from 50.1 in January), substantially outperforming the market forecast of 50.5. China's Caixin manufacturing PMI also increased, to 51.6 (from 49.2), beating the consensus estimate of 50.2
❗️Below-50 manufacturing PMIs in the US and Eurozone indicate a manufacturing sector contraction in these regions, which is negative for the demand for industrial metals. At the same time, upbeat Chinese PMIs provide some positive read-across on the country's manufacturing sector. This underpins our view on higher demand for industrial metals, amid the reopening in China
#PMIs
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
⛏Freeport McMoran has fully restored operations at its Grasberg copper mine, the company reports. Mining operations (3.1% of global copper supply) had been temporarily suspended since mid-February, due to the heavy rains and mud flows that caused damage to facilities. Hence, the accident has not substantially affected the copper market balance, in our view
#copper
https://metals-wire.com/sector/Copper
⛏Freeport McMoran has fully restored operations at its Grasberg copper mine, the company reports. Mining operations (3.1% of global copper supply) had been temporarily suspended since mid-February, due to the heavy rains and mud flows that caused damage to facilities. Hence, the accident has not substantially affected the copper market balance, in our view
#copper
https://metals-wire.com/sector/Copper
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SQM 4Q22 results – largely in-line with expectations
📝SQM's 4Q22 revenues were slightly above both the consensus and our estimates (+5% and +3%, respectively), mostly due to higher lithium output, which offset a ~10% lower realised price. Overall, EBITDA was close to our expectations (+3% vs. consensus and +1% vs. us)
⛏Management expects >20% lithium demand growth in FY23 and guides for the company’s lithium capacity to reach 265kt in 2025 (+45% vs the 2022 level)
❗️At spot prices, we expect 1Q23 EBITDA to grow in the low-single digits QoQ
$SQM #lithium
https://metals-wire.com:3000/company/SQM_US/
📝SQM's 4Q22 revenues were slightly above both the consensus and our estimates (+5% and +3%, respectively), mostly due to higher lithium output, which offset a ~10% lower realised price. Overall, EBITDA was close to our expectations (+3% vs. consensus and +1% vs. us)
⛏Management expects >20% lithium demand growth in FY23 and guides for the company’s lithium capacity to reach 265kt in 2025 (+45% vs the 2022 level)
❗️At spot prices, we expect 1Q23 EBITDA to grow in the low-single digits QoQ
$SQM #lithium
https://metals-wire.com:3000/company/SQM_US/
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Implats CY 2H22 results - EBITDA outperformance due to one-off
📝In CY 2H22, the company's revenues came 4% below consensus and 3% under our forecast, mostly due to softer proceeds from its refining division (IRS). However, EBITDA outperformed (+8% vs. consensus and +10% vs. us), due to a positive one-off effect (site-by-site EBITDA was still 6% below our estimates)
⛏The miner reiterated its FY23 (ending 30 June 2023) production guidance: on average, refined 6E PGMs output is expected to stay flat YoY. However, the growth in cash costs per ounce was revised to 9% YoY (from ~7% YoY)
💰The BoD has declared an interim cash dividend for FY23 of ZAR 3.57bn (~USD 206mn), which implies a DY of 2.7%
📌On our numbers, at spot, Impala's CY 1H23F EBITDA might be moderately weaker HoH, due to the recent drop in palladium and rhodium prices
#IMP #PGMs
https://metals-wire.com/company/IMP_SJ/
📝In CY 2H22, the company's revenues came 4% below consensus and 3% under our forecast, mostly due to softer proceeds from its refining division (IRS). However, EBITDA outperformed (+8% vs. consensus and +10% vs. us), due to a positive one-off effect (site-by-site EBITDA was still 6% below our estimates)
⛏The miner reiterated its FY23 (ending 30 June 2023) production guidance: on average, refined 6E PGMs output is expected to stay flat YoY. However, the growth in cash costs per ounce was revised to 9% YoY (from ~7% YoY)
💰The BoD has declared an interim cash dividend for FY23 of ZAR 3.57bn (~USD 206mn), which implies a DY of 2.7%
📌On our numbers, at spot, Impala's CY 1H23F EBITDA might be moderately weaker HoH, due to the recent drop in palladium and rhodium prices
#IMP #PGMs
https://metals-wire.com/company/IMP_SJ/
Morning Bites (part 1)
🏦 Global Central Banks continued to accumulate gold reserves in January, purchasing 32.7t of gold (vs. 26.5t in December), the World Gold Council reports. The main buyers were Turkey and China (23.3t and 14.9t, respectively). Meantime, the only net-seller was Uzbekistan, which reduced its reserves by 11.5t (vs. -1.2t in December). Overall, the dynamics are supportive for the sentiment on gold, especially as demand from central banks jumped >10x YoY in 4Q22. However, Turkey (~3% of world physical gold demand in 2022) is considering a reduction of its gold imports after the recent earthquakes, which might pressure future gold consumption
#gold
https://metals-wire.com/sector/Gold
🏦 Global Central Banks continued to accumulate gold reserves in January, purchasing 32.7t of gold (vs. 26.5t in December), the World Gold Council reports. The main buyers were Turkey and China (23.3t and 14.9t, respectively). Meantime, the only net-seller was Uzbekistan, which reduced its reserves by 11.5t (vs. -1.2t in December). Overall, the dynamics are supportive for the sentiment on gold, especially as demand from central banks jumped >10x YoY in 4Q22. However, Turkey (~3% of world physical gold demand in 2022) is considering a reduction of its gold imports after the recent earthquakes, which might pressure future gold consumption
#gold
https://metals-wire.com/sector/Gold
Morning Bites (part 2)
💍Hong Kong jewellery and watch sales surged 23% YoY in January, rebounding from the revised 5% YoY drop in December. Meanwhile, the category's revenues were the highest since January 2020. According to Rapaport, this growth reflected the recent opening of the Hong Kong border with Mainland China, as well as improved labour market conditions and the earlier start to the Lunar New Year. In our view, this might slightly support the demand for rough diamonds, which is still affected by the unfavourable macroeconomic conditions globally
🔋Lithium Americas has begun construction of its Thacker Pass lithium project, after the US federal court rejected environmental claims, the company reports. To recap, the project aims to achieve 80kt LCE production in two phases. During the Phase 1, the miner is set to achieve 40kt LCE output by 2H26 (~2% of global Li supply in 2026F), which is in line with growing consumer interest for EVs
#diamonds #lithium
https://metals-wire.com:3000/news-reports
💍Hong Kong jewellery and watch sales surged 23% YoY in January, rebounding from the revised 5% YoY drop in December. Meanwhile, the category's revenues were the highest since January 2020. According to Rapaport, this growth reflected the recent opening of the Hong Kong border with Mainland China, as well as improved labour market conditions and the earlier start to the Lunar New Year. In our view, this might slightly support the demand for rough diamonds, which is still affected by the unfavourable macroeconomic conditions globally
🔋Lithium Americas has begun construction of its Thacker Pass lithium project, after the US federal court rejected environmental claims, the company reports. To recap, the project aims to achieve 80kt LCE production in two phases. During the Phase 1, the miner is set to achieve 40kt LCE output by 2H26 (~2% of global Li supply in 2026F), which is in line with growing consumer interest for EVs
#diamonds #lithium
https://metals-wire.com:3000/news-reports
Week ahead data releases in M&M
Several companies are due to report their 4Q22/2H22 earnings this week. Our forecasts are, on average, less upbeat than the consensus estimates
#reporting_season
https://metals-wire.com:3000/events
Several companies are due to report their 4Q22/2H22 earnings this week. Our forecasts are, on average, less upbeat than the consensus estimates
#reporting_season
https://metals-wire.com:3000/events
Morning Bites
🇵🇪 Peruvian communities are set to resume transportation blockades this week, after a truce that had allowed local companies to restart mining, Reuters reports. Furthermore, starting from Monday, the protesters are going to demand that operations at the Antapaccay, Las Bambas and Constancia mines (2.2% of world mined copper supply in 2022E) be stopped. Overall, the blockades are likely to keep weighing on domestic copper supply. However, we do not expect a substantial impact on sentiment - most of the effect from Peru’s political unrest is already priced in by the market, we believe
#copper
https://metals-wire.com/sector/Copper
🇵🇪 Peruvian communities are set to resume transportation blockades this week, after a truce that had allowed local companies to restart mining, Reuters reports. Furthermore, starting from Monday, the protesters are going to demand that operations at the Antapaccay, Las Bambas and Constancia mines (2.2% of world mined copper supply in 2022E) be stopped. Overall, the blockades are likely to keep weighing on domestic copper supply. However, we do not expect a substantial impact on sentiment - most of the effect from Peru’s political unrest is already priced in by the market, we believe
#copper
https://metals-wire.com/sector/Copper
🗞Today, China published its preliminary import/export statistics for January-February (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 finished steel net exports surged 83% YoY in January-February, accelerating from the 17% YoY growth in December. Meanwhile, average daily steel production and inventories grew further, on the YoY basis, in the previous two months. Hence, some steel volumes might have been shipped abroad, given that domestic consumption had not yet fully recovered. We remind readers that China has recently published strong financing data for January (historically, the most important month), which might support domestic construction activity and, hence, the demand for steel in 2023
🪨China’s coal imports jumped 71% YoY in January-February (vs. flat YoY in December). According to Reuters, the strong dynamics were mostly due to the low base effect, as utilities replenished inventories, on expectations of upbeat demand after the country abandoned its zero-COVID policy in late 2022
#coal #steel
https://metals-wire.com:3000/news-reports
🔗China’s finished steel net exports surged 83% YoY in January-February, accelerating from the 17% YoY growth in December. Meanwhile, average daily steel production and inventories grew further, on the YoY basis, in the previous two months. Hence, some steel volumes might have been shipped abroad, given that domestic consumption had not yet fully recovered. We remind readers that China has recently published strong financing data for January (historically, the most important month), which might support domestic construction activity and, hence, the demand for steel in 2023
🪨China’s coal imports jumped 71% YoY in January-February (vs. flat YoY in December). According to Reuters, the strong dynamics were mostly due to the low base effect, as utilities replenished inventories, on expectations of upbeat demand after the country abandoned its zero-COVID policy in late 2022
#coal #steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
🔗CISA mills daily crude steel production grew 6.1% to 2.22mnt in the late-February from the second ten days of the month. This represented 6.2% YoY growth (vs. +10.2% YoY in the previous ten days). At the same time, local steel inventories contracted 10.8% over the period (still 8.2% above the 2022 level, as of 28 February). Overall, the decline in stocks, as well as the recently reported strong PMIs in China, might indicate some revival of domestic steel demand, in our view
🔋South America is aiming to create a lithium OPEC, according to the Argentinean delegation at the annual PDAC Convention. Hence, Argentina, Chile, Bolivia and Brazil (~36% of world Li supply in 2022) are considering the creation of a cartel to expand their processing capacity. Overall, we do not expect this news to have much impact on the market: local governments proposed this idea in late-2022, while the timeline is still not specified
#steel #lithium
https://metals-wire.com:3000/news-reports
🔗CISA mills daily crude steel production grew 6.1% to 2.22mnt in the late-February from the second ten days of the month. This represented 6.2% YoY growth (vs. +10.2% YoY in the previous ten days). At the same time, local steel inventories contracted 10.8% over the period (still 8.2% above the 2022 level, as of 28 February). Overall, the decline in stocks, as well as the recently reported strong PMIs in China, might indicate some revival of domestic steel demand, in our view
🔋South America is aiming to create a lithium OPEC, according to the Argentinean delegation at the annual PDAC Convention. Hence, Argentina, Chile, Bolivia and Brazil (~36% of world Li supply in 2022) are considering the creation of a cartel to expand their processing capacity. Overall, we do not expect this news to have much impact on the market: local governments proposed this idea in late-2022, while the timeline is still not specified
#steel #lithium
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
💍US jewellery sales were down 2% YoY in January, after the revised 3% YoY fall in December. Overall, the figure came in materially below the preliminary expectations (+6% YoY). According to market participants, the cautious market mood persists, amid slow trading and low production volumes. Hence, we reiterate our view that the ongoing decline in US jewellery sales (since October 2022) is likely to keep weighing on the global diamond sector (at least in the near future). To recap, the US represents ~50% of world diamond jewellery sales
#diamonds
https://metals-wire.com:3000/news-reports
💍US jewellery sales were down 2% YoY in January, after the revised 3% YoY fall in December. Overall, the figure came in materially below the preliminary expectations (+6% YoY). According to market participants, the cautious market mood persists, amid slow trading and low production volumes. Hence, we reiterate our view that the ongoing decline in US jewellery sales (since October 2022) is likely to keep weighing on the global diamond sector (at least in the near future). To recap, the US represents ~50% of world diamond jewellery sales
#diamonds
https://metals-wire.com:3000/news-reports
Morning Bites (part 4)
🚘New car registrations in France, the UK, Spain, Italy and Germany grew 12% YoY in February, according to the preliminary data. Nonetheless, the figure was still 26% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 27% and 30%, respectively, vs. 2019, while sales in France were hit the most, by ~40%. Moreover, UK and Italy sales were 9% and 7% lower relative to 2019, respectively. Given that the above countries represent ~70% of new vehicle registrations in Europe, local car sales have likely continued to grow YoY, 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 12% YoY in February, according to the preliminary data. Nonetheless, the figure was still 26% below the (2019) pre-COVID level. Specifically, in Germany and Spain, car sales were down 27% and 30%, respectively, vs. 2019, while sales in France were hit the most, by ~40%. Moreover, UK and Italy sales were 9% and 7% lower relative to 2019, respectively. Given that the above countries represent ~70% of new vehicle registrations in Europe, local car sales have likely continued to grow YoY, while remaining below their pre-pandemic levels
#cars
https://metals-wire.com:3000/sector/PGM
Morning Bites (part 1)
📉Gold-backed ETFs reduced their holdings by a further 34t in February (after the 26t decline in January). According to the WGC, gold ETFs last month saw outflows in EU (-25t) and in N. America (-10t). We reiterate our view that ETFs remain the main factor pressuring gold performance, despite the substantial growth in physical gold demand during 4Q22
🇨🇳In February, the PBoC increased its gold reserves by 25t, to a total of 2,050t, after the 30 and 15t growth in December and January, respectively. This represented ~7% of world monthly physical gold demand in 2022, on our numbers. Historically, when Сhina's central bank has started buying gold, the process has lasted as much as a year (as in 2015-16 and 2019). We therefore believe further purchases in 2023 are a distinct possibility, which might add some support to the precious metal's price. To recap, global institutions more than doubled their gold purchases YoY in 2022
#ETF #gold
https://metals-wire.com:3000/news-reports
📉Gold-backed ETFs reduced their holdings by a further 34t in February (after the 26t decline in January). According to the WGC, gold ETFs last month saw outflows in EU (-25t) and in N. America (-10t). We reiterate our view that ETFs remain the main factor pressuring gold performance, despite the substantial growth in physical gold demand during 4Q22
🇨🇳In February, the PBoC increased its gold reserves by 25t, to a total of 2,050t, after the 30 and 15t growth in December and January, respectively. This represented ~7% of world monthly physical gold demand in 2022, on our numbers. Historically, when Сhina's central bank has started buying gold, the process has lasted as much as a year (as in 2015-16 and 2019). We therefore believe further purchases in 2023 are a distinct possibility, which might add some support to the precious metal's price. To recap, global institutions more than doubled their gold purchases YoY in 2022
#ETF #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 2)
💎De Beers has reported sales of USD 495mn at its 2nd cycle in 2023, 16% below the historical average and 24% lower YoY (vs. -31% YoY at the 1st cycle in 2023). According to De Beers CEO Al Cook, rough diamond demand remained steady, despite the lower sales YoY. It was also mentioned that sightholders are planning to make more purchases later in 2023. However, we maintain our cautious view on the sector, given weak rough diamond sales (since early-2023) and consistently soft US jewellery data (since October 2022). Hence, we believe global diamond demand will remain weak (at least in the near future), following the adverse macroeconomic conditions
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 495mn at its 2nd cycle in 2023, 16% below the historical average and 24% lower YoY (vs. -31% YoY at the 1st cycle in 2023). According to De Beers CEO Al Cook, rough diamond demand remained steady, despite the lower sales YoY. It was also mentioned that sightholders are planning to make more purchases later in 2023. However, we maintain our cautious view on the sector, given weak rough diamond sales (since early-2023) and consistently soft US jewellery data (since October 2022). Hence, we believe global diamond demand will remain weak (at least in the near future), following the adverse macroeconomic conditions
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 3)
🇵🇪 The Peruvian government sees commodity shipments normalising within days as nationwide protests ease, according to the country’s minister for energy and mines minister. In addition, the minister hopes for a lasting military presence along roads to ensure that mine commitments are met. Overall, the news might be slightly negative for sentiment on the copper market (Peru accounts for ~11% of world mined Cu supply); however, some local communities have recently decided to resume transportation blockades.
#copper
https://metals-wire.com/sector/Copper
🇵🇪 The Peruvian government sees commodity shipments normalising within days as nationwide protests ease, according to the country’s minister for energy and mines minister. In addition, the minister hopes for a lasting military presence along roads to ensure that mine commitments are met. Overall, the news might be slightly negative for sentiment on the copper market (Peru accounts for ~11% of world mined Cu supply); however, some local communities have recently decided to resume transportation blockades.
#copper
https://metals-wire.com/sector/Copper
Morning Bites
🇵🇪Peru’s copper production declined 2% YoY in January, reversing from the sharp 20% YoY growth in December. Overall, the dynamics were driven by local political unrest and transportation blockades, which affected mining at key domestic copper pits, such as Las Bambas (1.4% of world mined Cu supply) and Antapaccay (0.8%). Although the news might be slightly supportive for the sentiment on copper, local authorities expect the metal's shipments to normalise soon
🛒Global aluminium producers are offering 45-70% higher QoQ premiums for 2Q23, Reuters reports, citing sources involved in the pricing talks. However, the figure is still 15-27% lower YoY. Meanwhile, suppliers offered a USD 125-145/t surcharge for Japanese buyers (Asia's largest Al importer), expecting higher demand from automakers. The proposal, if agreed by buyers, would mark the first increase in 6 quarters, underpinning a recovery in the local consumption of the metal
#copper #aluminium
https://metals-wire.com:3000/news-reports
🇵🇪Peru’s copper production declined 2% YoY in January, reversing from the sharp 20% YoY growth in December. Overall, the dynamics were driven by local political unrest and transportation blockades, which affected mining at key domestic copper pits, such as Las Bambas (1.4% of world mined Cu supply) and Antapaccay (0.8%). Although the news might be slightly supportive for the sentiment on copper, local authorities expect the metal's shipments to normalise soon
🛒Global aluminium producers are offering 45-70% higher QoQ premiums for 2Q23, Reuters reports, citing sources involved in the pricing talks. However, the figure is still 15-27% lower YoY. Meanwhile, suppliers offered a USD 125-145/t surcharge for Japanese buyers (Asia's largest Al importer), expecting higher demand from automakers. The proposal, if agreed by buyers, would mark the first increase in 6 quarters, underpinning a recovery in the local consumption of the metal
#copper #aluminium
https://metals-wire.com:3000/news-reports
Week ahead data releases in M&M
As the reporting season is coming to an end, no major miners (under our coverage) are due to report their earning this week. We await for the official production data from China and South Africa
#reporting_season
https://metals-wire.com:3000/events
As the reporting season is coming to an end, no major miners (under our coverage) are due to report their earning this week. We await for the official production data from China and South Africa
#reporting_season
https://metals-wire.com:3000/events
Morning Bites (Part 1)
⛏China is aiming to tackle the growth in iron ore prices, which is more than 50% since October. The Chinese authorities are urging companies that store massive volumes to sell some of their materials. They are also considering raising port-storage fees for large cargoes in order to stimulate trade. China is the largest iron ore consumer (~70% of the world's imports), and such regulations might exert pressure on prices, although there has been no effect so far.
🇵🇦First Quantum has resumed operations at the port of Punta Rincon after the suspension since 23 February, Reuters reports. First Quantum halted ore processing operations in February after exceeding the storage limit of copper concentrate (~10kt). Cobre Panama accounts for 1.5% of global copper output, while 60% of Punta Rincon's copper concentrate export is destined for China.
#iron_ore #copper
https://metals-wire.com:3000/news-reports
⛏China is aiming to tackle the growth in iron ore prices, which is more than 50% since October. The Chinese authorities are urging companies that store massive volumes to sell some of their materials. They are also considering raising port-storage fees for large cargoes in order to stimulate trade. China is the largest iron ore consumer (~70% of the world's imports), and such regulations might exert pressure on prices, although there has been no effect so far.
🇵🇦First Quantum has resumed operations at the port of Punta Rincon after the suspension since 23 February, Reuters reports. First Quantum halted ore processing operations in February after exceeding the storage limit of copper concentrate (~10kt). Cobre Panama accounts for 1.5% of global copper output, while 60% of Punta Rincon's copper concentrate export is destined for China.
#iron_ore #copper
https://metals-wire.com:3000/news-reports
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