Metals Wire

Morning Bites

🌊Sibanye-Stillwater’s US PGM operations were affected by a heavy flood. According to the company, the flood was triggered by snow melting and intense rains, which destroyed the road to the Stillwater mine. The company is now assessing the impact on its facilities. Possible production disruptions might slightly support PGM prices, as Sibanye-Stillwater’s US PGM operations account for some 6% and 2% of global palladium and platinum supply, respectively. However, given there is no damage to underground mine facilities, we do not expect any medium-term effect from this

$SBSW #PGMs

🗞Today, China published its industrial production data for May

🏢China property sales continued to fall in May, declining 32% YoY (vs. -39% YoY in April). Furthermore, floor space starts dropped 42% YoY in May (vs. -44% YoY in April). Meanwhile, property completions were 31% YoY lower in May from the 14% YoY decrease in April. China’s weakened real estate sector is negative for industrial metals demand. However, a slight recovery might arrive in the short term if China eases COVID restrictions and implements its previously announced economic support measures

🏭China’s thermal power generation dropped 11% YoY in May (vs. 12% YoY decline in April). Meanwhile, total electricity generation was down 3% YoY in May (vs. 4% drop in April) due to COVID-related factory shutdowns. This is negative for China’s coal demand and prices in the short term; however, power generation could well recover in the coming months if COVID restrictions are eased

#statistics #China #steel #aluminium #copper #coal

Morning Bites (part 2)

Severstal has announced a July HRC price of RUB 48k/t (USD 833/t) excluding tax – 9% below the current producer price, which itself has declined 6% MoM. The price reduction was caused by weak domestic steel demand and rouble appreciation. We note that the stronger rouble has resulted in a domestic HRC price premium of USD 213/t. If other producers follow, the premium might narrow to USD 130/t; however, if the USD/RUB exchange rate returns to 70, the premium could drop to USD 10/t

#steel #rusteel

Morning Bites (part 1)

🚗💨The rate of decline of China’s new internal combustion engine car sales decelerated to 26% YoY in May from 57% YoY in April. China’s falling ICE car sales are negative for the PGM demand as the country’s automotive sector accounts for some 26% and 17% of global autocatalyst Pd and Pt demand, respectively. However, in the short term, China’s car sales might be supported by the extension of car plate quotas and the announced vehicle purchase tax relief

🚙China’s new EV sales increased 105% YoY in May (vs. 45% YoY growth in April). Moreover, China’s New Energy Vehicle (NEV) sales might be further fuelled by the subsidies on NEV purchases announced in May. Growing NEV sales are supportive for the demand for battery metals: nickel, lithium and cobalt. We note that in 2021, China accounted for 49% of global EV sales (passenger cars and light-duty vehicles)

#cars #EV #nickel #lithium #cobalt

📌China’s nickel pig iron (NPI) output was up 9% YoY in May (vs. the 16% YoY increase in April) -- both from a relatively low base. However, in the short term, the country’s NPI production might be pressured by the weak demand from stainless steel manufacturers. China’s stainless steel output was down 2% YoY in April (vs. the 1% YoY decline in March). Moreover, CRU expects the country’s stainless steel production to fall 7% YoY in June as the weak demand has led to a build-up of stainless steel inventories in China

#China #nickel

Morning Bites (part 2)

📌The decline rate of China’s domestic excavator sales decelerated to 45% YoY in May from 61% YoY in April. Meanwhile, the country's total excavator sales (domestic + export) fell 24% YoY in May (vs. 47% YoY drop in April). Decreasing excavator sales indicate weak construction activity in China, which is negative for the demand for industrial metals. However, the relatively more moderate decline rate in May slightly brightens the outlook for China’s construction sector over the coming months

#China #steel #aluminium #copper