Morning Bites (part 3)
🚘The US is to impose stricter EV tax credit rules on 18 April, amid plans to limit the country's dependence on Chinese battery supplies, Reuters reports. Under the new requirement, >50% of battery value must be assembled in North America to qualify the vehicle for a USD 3,750 credit. In order to receive the full USD 7,500 credit, >40% of the critical minerals' value must be sourced from the US or a free trade partner (e.g. Japan). Per estimates from market participants, the new rule eliminates 70% of models from qualification for any federal tax credit (previously only 21 vehicles were eligible for the full benefit). In our view, this might add some stress to EV availability in the US (8% of global sales), which could in turn slightly affect the global demand for the battery metals basket (nickel, lithium and cobalt) in the medium term
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
🚘The US is to impose stricter EV tax credit rules on 18 April, amid plans to limit the country's dependence on Chinese battery supplies, Reuters reports. Under the new requirement, >50% of battery value must be assembled in North America to qualify the vehicle for a USD 3,750 credit. In order to receive the full USD 7,500 credit, >40% of the critical minerals' value must be sourced from the US or a free trade partner (e.g. Japan). Per estimates from market participants, the new rule eliminates 70% of models from qualification for any federal tax credit (previously only 21 vehicles were eligible for the full benefit). In our view, this might add some stress to EV availability in the US (8% of global sales), which could in turn slightly affect the global demand for the battery metals basket (nickel, lithium and cobalt) in the medium term
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
🏗China’s preliminary excavator sales dropped 31% YoY in March (domestic + export), vs. the 12% YoY decline in February, based on industry estimates provided by SteelOrbis. The decline in domestic excavator sales accelerated to 48% YoY, after the 33% YoY fall in February. Export sales continued to grow, 11% YoY, in March (vs. 34% YoY in February). The still weak domestic sales imply no recovery for the stagnant Chinese real estate segment in the short term. However, despite the slowdown in Chinese PMIs, they are still in positive territory, which might bolster domestic construction activity together with demand for industrial metals in 2023, in our view
#steel
https://metals-wire.com/sector/Steel
🏗China’s preliminary excavator sales dropped 31% YoY in March (domestic + export), vs. the 12% YoY decline in February, based on industry estimates provided by SteelOrbis. The decline in domestic excavator sales accelerated to 48% YoY, after the 33% YoY fall in February. Export sales continued to grow, 11% YoY, in March (vs. 34% YoY in February). The still weak domestic sales imply no recovery for the stagnant Chinese real estate segment in the short term. However, despite the slowdown in Chinese PMIs, they are still in positive territory, which might bolster domestic construction activity together with demand for industrial metals in 2023, in our view
#steel
https://metals-wire.com/sector/Steel
Morning Bites (part 2)
🇵🇪Peru is aiming to increase copper output 15% YoY in 2023, after the 5% YoY growth in 2022. The world's second largest copper producer announced the plans to mine 2.8mnt in 2023 (11% of global copper supply in 2023F), after the protest issues were resolved. The news might already be partially priced in after the positive output data in February, in our view
🔋Sigma Lithium is to start production at Grota do Cirilo in a few days, as the hard rock lithium mine has received its operating licence, Reuters reports. The mine is slated to ramp up slowly in the coming months and reach an annual production rate of 270kt of spodumene concentrate (~61kt LCE) by July, which would 6% of global lithium supply for 2023F, on our numbers. To recap, the project is to triple to 173kt LCE in 2024. As the project is opening in line with the company's plans, we anticipate no material impact on the market sentiment
#copper #lithium
https://metals-wire.com:3000/news-reports
🇵🇪Peru is aiming to increase copper output 15% YoY in 2023, after the 5% YoY growth in 2022. The world's second largest copper producer announced the plans to mine 2.8mnt in 2023 (11% of global copper supply in 2023F), after the protest issues were resolved. The news might already be partially priced in after the positive output data in February, in our view
🔋Sigma Lithium is to start production at Grota do Cirilo in a few days, as the hard rock lithium mine has received its operating licence, Reuters reports. The mine is slated to ramp up slowly in the coming months and reach an annual production rate of 270kt of spodumene concentrate (~61kt LCE) by July, which would 6% of global lithium supply for 2023F, on our numbers. To recap, the project is to triple to 173kt LCE in 2024. As the project is opening in line with the company's plans, we anticipate no material impact on the market sentiment
#copper #lithium
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
💎De Beers has reported sales of USD 540mn at its third cycle in 2023, 2% softer than the historical average and 5% lower YoY (vs. -24% YoY at the second cycle in 2023). According to De Beers CEO Al Cook, the miner faced good demand for rough stones, while it is seeing some positive trends in consumer demand for gem-set jewellery. Despite the minor upbeat sentiment from the sight’s results, we keep our cautious view on the segment - De Beers YTD sales are still 21% lower YoY, while the US jewellery data has been consistently soft since late-2022. In addition, the unfavourable macroeconomic conditions globally still pose risks to the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
💎De Beers has reported sales of USD 540mn at its third cycle in 2023, 2% softer than the historical average and 5% lower YoY (vs. -24% YoY at the second cycle in 2023). According to De Beers CEO Al Cook, the miner faced good demand for rough stones, while it is seeing some positive trends in consumer demand for gem-set jewellery. Despite the minor upbeat sentiment from the sight’s results, we keep our cautious view on the segment - De Beers YTD sales are still 21% lower YoY, while the US jewellery data has been consistently soft since late-2022. In addition, the unfavourable macroeconomic conditions globally still pose risks to the diamond sector
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🏦China’s aggregate financing grew 16% YoY in March to CNY 5.38tn, exceeding the consensus estimate by 20%. Specifically, traditional bank loans gained 24% YoY, beating the consensus by 20%. The continued financing growth, together with the positive local PMIs, underpin our view for industrial metals. To recap, China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#global
https://metals-wire.com:3000/news-reports
🏦China’s aggregate financing grew 16% YoY in March to CNY 5.38tn, exceeding the consensus estimate by 20%. Specifically, traditional bank loans gained 24% YoY, beating the consensus by 20%. The continued financing growth, together with the positive local PMIs, underpin our view for industrial metals. To recap, China represents 52% of global steel consumption, as well as 55% and 58% of world copper and aluminium demand, respectively
#global
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
📌China’s new internal combustion engine car sales grew 3% YoY in March (-25% vs. March 2019). The overall sector performance is still below the pre-Covid level, which, along with the growing popularity of EVs, continues to pressure the demand for PGMs. China’s auto sector accounts for some 26% and 17% of world autocatalyst Pd and Pt demand, respectively
📌New EV sales in China increased 35% YoY in March, after the 56% YoY surge in February. The EV sector is driving up the demand for battery metals such as cobalt, lithium, and nickel, while China has accounted for half of global EV sales in recent months. Hence, this growth might bolster the demand for the battery metals
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
📌China’s new internal combustion engine car sales grew 3% YoY in March (-25% vs. March 2019). The overall sector performance is still below the pre-Covid level, which, along with the growing popularity of EVs, continues to pressure the demand for PGMs. China’s auto sector accounts for some 26% and 17% of world autocatalyst Pd and Pt demand, respectively
📌New EV sales in China increased 35% YoY in March, after the 56% YoY surge in February. The EV sector is driving up the demand for battery metals such as cobalt, lithium, and nickel, while China has accounted for half of global EV sales in recent months. Hence, this growth might bolster the demand for the battery metals
#cars #EV #nickel #lithium #cobalt
https://metals-wire.com:3000/news-reports
Morning Bites (part 4)
🏗️China is to spend USD1.8tn on construction projects, Bloomberg reports. About two thirds of China’s regions have announced massive spending plans for transportation infrastructure, energy generation and industrial parks this year. Meanwhile, the recent data on China Construction Business Activity surged sharply in March, and hit its highest level (65.6 vs. the 10-y avg. of 59.2) in more than a decade. Overall, the large-scale construction might boost the demand for industrial metals, which would support our positive outlook for the commodities
#global
https://metals-wire.com:3000/news-reports
🏗️China is to spend USD1.8tn on construction projects, Bloomberg reports. About two thirds of China’s regions have announced massive spending plans for transportation infrastructure, energy generation and industrial parks this year. Meanwhile, the recent data on China Construction Business Activity surged sharply in March, and hit its highest level (65.6 vs. the 10-y avg. of 59.2) in more than a decade. Overall, the large-scale construction might boost the demand for industrial metals, which would support our positive outlook for the commodities
#global
https://metals-wire.com:3000/news-reports
🗞Today, China published its preliminary import/export statistics for March (see table above)
#statistics #China
https://metals-wire.com:3000/news-reports
#statistics #China
https://metals-wire.com:3000/news-reports
Morning Bites
🔗China’s finished steel net exports surged 83% YoY in March, in line with the 83% YoY growth in January-February. Meanwhile, last month, average daily steel production mostly remained at the same level as in 2022, while inventories shortened, on the YoY basis. To recap, according to a recent Bloomberg report, China is planning to construct massive infrustructure projects this year, which might support domestic construction activity and, hence, the demand for steel in 2023
🪨China’s coal imports skyrocketed 151% YoY in March (vs. 71% YoY growth in January-February). According to Reuters, the strong dynamics were mostly due to utilities, which increased purchases amid expectations of a recovery in demand. Meanwhile, imported coal volumes were at their highest in the last three years
#coal #steel
https://metals-wire.com:3000/news-reports
🔗China’s finished steel net exports surged 83% YoY in March, in line with the 83% YoY growth in January-February. Meanwhile, last month, average daily steel production mostly remained at the same level as in 2022, while inventories shortened, on the YoY basis. To recap, according to a recent Bloomberg report, China is planning to construct massive infrustructure projects this year, which might support domestic construction activity and, hence, the demand for steel in 2023
🪨China’s coal imports skyrocketed 151% YoY in March (vs. 71% YoY growth in January-February). According to Reuters, the strong dynamics were mostly due to utilities, which increased purchases amid expectations of a recovery in demand. Meanwhile, imported coal volumes were at their highest in the last three years
#coal #steel
https://metals-wire.com:3000/news-reports
Morning Bites (part 1)
💍LVMH has reported 11% YoY growth in the organic sales of watches and jewellery in 1Q23, vs. the 3% YoY increase in 4Q22. According to the company, in jewellery, Tiffany & Co. had a strong start to the year. The popularity of the new collections also continued to grow throughout its worldwide rollout. However, despite the accelerating YoY growth rate in 1Q23, we note the still adverse macroeconomic conditions which are underpinning the risks to global jewellery demand, and could be a limiting factor for diamond demand
#diamonds
https://metals-wire.com/sector/Diamonds
💍LVMH has reported 11% YoY growth in the organic sales of watches and jewellery in 1Q23, vs. the 3% YoY increase in 4Q22. According to the company, in jewellery, Tiffany & Co. had a strong start to the year. The popularity of the new collections also continued to grow throughout its worldwide rollout. However, despite the accelerating YoY growth rate in 1Q23, we note the still adverse macroeconomic conditions which are underpinning the risks to global jewellery demand, and could be a limiting factor for diamond demand
#diamonds
https://metals-wire.com/sector/Diamonds
Morning Bites (part 2)
🇿🇦South Africa’s PGM mining output remained flat YoY in February, after the 15% YoY drop in January. Meanwhile, the country’s gold production increased 2% YoY, decelerating from the 5% YoY growth in January. In the last year, overall mining activity was subdued amid the adverse effects of the local electricity crisis. However, the moderate recovery in February, combined with the ongoing weak demand from the automotive sector, might weigh on PGM prices. To recap, South Africa accounts for ~70% of global platinum, 38% of palladium supply and 3% of global gold output
#PGMs #gold
https://metals-wire.com:3000/news-reports
🇿🇦South Africa’s PGM mining output remained flat YoY in February, after the 15% YoY drop in January. Meanwhile, the country’s gold production increased 2% YoY, decelerating from the 5% YoY growth in January. In the last year, overall mining activity was subdued amid the adverse effects of the local electricity crisis. However, the moderate recovery in February, combined with the ongoing weak demand from the automotive sector, might weigh on PGM prices. To recap, South Africa accounts for ~70% of global platinum, 38% of palladium supply and 3% of global gold output
#PGMs #gold
https://metals-wire.com:3000/news-reports
Morning Bites (part 3)
🇨🇳China might limit domestic steel production at the 2022 level, Bloomberg reports. Beijing is to release the plan in April, as China's steel production grew 6% YoY in 2mo23, but demand in the country has not substantially picked up yet. Overall, if the plan was to materialise, it might be negative for iron ore sentiment (China represents ~56% of world steel supply), but support steel prices
#steel
https://metals-wire.com/sector/Steel
🇨🇳China might limit domestic steel production at the 2022 level, Bloomberg reports. Beijing is to release the plan in April, as China's steel production grew 6% YoY in 2mo23, but demand in the country has not substantially picked up yet. Overall, if the plan was to materialise, it might be negative for iron ore sentiment (China represents ~56% of world steel supply), but support steel prices
#steel
https://metals-wire.com/sector/Steel
👍2
Week ahead data releases in M&M
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among the major M&M names, Alcoa and Freeport are to release their 1Q23 financial results (on Wednesday 19 and Thursday 20 April, respectively). For these two miners, our EBITDA estimates are slightly above the consensus
#reporting_season
https://metals-wire.com:3000/events
As the reporting season begins, we commence a series of posts devoted to the forthcoming data releases. This week, among the major M&M names, Alcoa and Freeport are to release their 1Q23 financial results (on Wednesday 19 and Thursday 20 April, respectively). For these two miners, our EBITDA estimates are slightly above the consensus
#reporting_season
https://metals-wire.com:3000/events
Morning Bites (part 1)
🔗CISA mills' daily crude steel production increased 2.7% to 2.32mnt in early April from late-March (YoY growth of 0.3%). Meanwhile, local steel inventories increased 6.2% over the same period. Although production (on an annual basis) has been growing continuously since early February, China’s government might limit national output at the level of 2022. That could potentially be a supportive factor for steel prices
#steel
https://metals-wire.com:3000/sector/Steel
🔗CISA mills' daily crude steel production increased 2.7% to 2.32mnt in early April from late-March (YoY growth of 0.3%). Meanwhile, local steel inventories increased 6.2% over the same period. Although production (on an annual basis) has been growing continuously since early February, China’s government might limit national output at the level of 2022. That could potentially be a supportive factor for steel prices
#steel
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 2)
💎India’s rough diamond net imports fell 19% YoY in March, roughly in line with the -18% YoY in February. Meanwhile, India’s polished diamond net exports dropped 25% YoY (vs. the 23% YoY growth in February). Overall, we reiterate our view that adverse macroeconomic conditions globally are keeping the diamond sector under pressure, amid still soft De Beers sales and the ongoing weakish US jewellery data. We note that the dynamics were close to the mid-stream stocks accumulation area (see the chart above)
Meanwhile, India’s synthetic rough diamond net imports decreased 53% YoY in March (vs. -60% YoY in February). The share of lab-grown net rough imports in natural diamond imports also shrank to 6% in February (vs. 10% a year ago)
#diamonds
https://metals-wire.com/sector/Diamonds
💎India’s rough diamond net imports fell 19% YoY in March, roughly in line with the -18% YoY in February. Meanwhile, India’s polished diamond net exports dropped 25% YoY (vs. the 23% YoY growth in February). Overall, we reiterate our view that adverse macroeconomic conditions globally are keeping the diamond sector under pressure, amid still soft De Beers sales and the ongoing weakish US jewellery data. We note that the dynamics were close to the mid-stream stocks accumulation area (see the chart above)
Meanwhile, India’s synthetic rough diamond net imports decreased 53% YoY in March (vs. -60% YoY in February). The share of lab-grown net rough imports in natural diamond imports also shrank to 6% in February (vs. 10% a year ago)
#diamonds
https://metals-wire.com/sector/Diamonds
🗞Today, China has published its industrial production data for March (see table above)
#statistics #China
https://metals-wire.com:3000/news-reports
#statistics #China
https://metals-wire.com:3000/news-reports
Morning Bites
🔗China’s crude steel output grew 7% YoY in March, in line with the 7% YoY growth in January-February. According to Reuters, steel mills boosted their output amid improved margins and the expected robust downstream demand during the peak construction activity season. In addition, the strong Chinese March PMIs might indicate a potential recovery in domestic steel demand
🏢China's property sales were flat YoY in March (vs. -4% YoY in January-February), but still 20% below the historical highs of 2021. The decline in floor space starts accelerated to 29% YoY last month, after the 9% YoY drop in January-February. However, personal mortgage loans jumped 20% YoY (vs. -15% in January-February), while property completions also grew 31% YoY in March (vs. 8% YoY growth in January-February). Despite the uncertainty in the real estate segment, China’s strong liquidity injections data might add support to local construction activity in 2023
#steel #property
https://metals-wire.com:3000/sector/Steel
🔗China’s crude steel output grew 7% YoY in March, in line with the 7% YoY growth in January-February. According to Reuters, steel mills boosted their output amid improved margins and the expected robust downstream demand during the peak construction activity season. In addition, the strong Chinese March PMIs might indicate a potential recovery in domestic steel demand
🏢China's property sales were flat YoY in March (vs. -4% YoY in January-February), but still 20% below the historical highs of 2021. The decline in floor space starts accelerated to 29% YoY last month, after the 9% YoY drop in January-February. However, personal mortgage loans jumped 20% YoY (vs. -15% in January-February), while property completions also grew 31% YoY in March (vs. 8% YoY growth in January-February). Despite the uncertainty in the real estate segment, China’s strong liquidity injections data might add support to local construction activity in 2023
#steel #property
https://metals-wire.com:3000/sector/Steel
Morning Bites (part 1)
💍China’s jewellery retailers reported growth of 12-66% in LFL (same store) sales of gem-set jewellery in 1Q23. As such, Chow Tai Fook published 12% YoY growth in LFL sales of gem-set, platinum and K-gold jewellery in 1Q23. Sales in Mainland China were down 19% YoY, while HK and Macau sales roughly doubled (+99% YoY). Meanwhile, Luk Fook reported a 66% YoY increase in LFL gem-set jewellery sales in 1Q23. Although the retailer’s gem-set jewellery sales shrank 15% YoY in Mainland China, they jumped 88% YoY in HK and Macau. The overall dynamics were positive, following the easing of Beijing’s anti-Covid policies and the opening of HK's border with the Mainland in early February. To recap, China accounts for ~15% of global diamond jewellery retail sales. Hence, some recovery in Asia’s trading might be a moderately positive factor for rough diamond demand
#diamonds
https://metals-wire.com/sector/Diamonds
💍China’s jewellery retailers reported growth of 12-66% in LFL (same store) sales of gem-set jewellery in 1Q23. As such, Chow Tai Fook published 12% YoY growth in LFL sales of gem-set, platinum and K-gold jewellery in 1Q23. Sales in Mainland China were down 19% YoY, while HK and Macau sales roughly doubled (+99% YoY). Meanwhile, Luk Fook reported a 66% YoY increase in LFL gem-set jewellery sales in 1Q23. Although the retailer’s gem-set jewellery sales shrank 15% YoY in Mainland China, they jumped 88% YoY in HK and Macau. The overall dynamics were positive, following the easing of Beijing’s anti-Covid policies and the opening of HK's border with the Mainland in early February. To recap, China accounts for ~15% of global diamond jewellery retail sales. Hence, some recovery in Asia’s trading might be a moderately positive factor for rough diamond demand
#diamonds
https://metals-wire.com/sector/Diamonds