Articles in Category: Automotive

For decades, the hospitality, retail, food and construction industries have taken particular advantage of the European Union’s rules allowing freedom of movement, meaning Europeans can work legally in any of the 28 countries that are members, even if they are unskilled laborers. Non-Europeans must obtain work visas under immigration rules that require graduate-level skills and a minimum annual salary of 20,800 pounds.

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Now that the U.K. has voted to leave the E.U., though, that could all change. When the U.K. does finally untangle itself from its E.U. member-state neighbors — a process that many are promising will be complete within two years — it’s likely to start requiring European citizens to clear the same visa hurdles as other foreign workers. Three-quarters of the 2.2 million people from other E.U. countries currently working in Britain wouldn’t make the cut, according to the Migration Observatory at Oxford University.

Migrants Take the Blame for UK Unemployment

The Leave campaign convinced a slim majority of U.K. citizens, 52%, that it has been too easy for “migrant workers” from Europe to waltz into the country and take British jobs.

Who would benefit from a Brexit? Not the EU. Source: Adobe Stock/Stephen Finn.

Now that the U.K. is officially leaving the European Union, what will happen to non-citizens with jobs on the island?  Source: Adobe Stock/Stephen Finn.

“We have absolutely no power to control the numbers who are coming with no job offers and no qualifications from the 28 E.U. countries,” former London Mayor Boris Johnson said in a speech before the vote. Read more

Almost no one seems to think this is a good idea, but the British people have gone and Brexited the European Union anyway.

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Britain has voted by a narrow majority 51.8/48.2 to leave the EU. What happens now is anyone’s guess. We are in uncharted territory, even those leading the charge for a Leave vote seem somewhat perplexed by the outcome and have been busy backtracking on promises and commitments made during the campaign about what they could deliver.

New Leadership

David Cameron, Britain’s prime minister, has announced he will step down before the conference season in October to make way for a new leader of the party’s choosing. The automatic assumption is this will be Boris Johnson with Michael Gove as Chancellor, but the party is deeply divided and a lot could happen between now and the Fall.

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Source: BBC

In the meantime, the markets have taken the decision badly. The FTSE 250 — which is considered a close barometer of the UK economy — fell by 12.3% before paring losses back to 7.1%, while the pound tumbled to $1.30, before recovering slightly to $1.36 against the dollar. Read more

General Motors has released new advertisements for its Chevrolet Silverado truck line highlighting the difference between the “roll-formed, high-strength steel” bed of the Silverado and Ford Motor Company‘s F-150’s “military-grade aluminum” bed. This is a debate we’ve regularly chronicled here at MetalMiner.

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In one of the ads, two tests are performed on the competitor trucks’ payload beds without bedliners. First, a load of concrete cinder blocks is dumped from the hydraulic buckets of two waiting backhoes, a scenario that could conceivably be required of a truck used to pick up supplies for a construction site. While the Silverado suffers some dents and scratches, its bed is never punctured. The F-150, though? Several punctures, cracks and even a split are recorded in the video.

GM-youtube_Ford_F150_550_060716

The aluminum bed of a Ford F-150 after being punctured by a steel tool box dropped from the side of the truck in a new Chevrolet Silverado ad. Youtube image courtesy of GM.

Okay, so what? Some Ford partisans might say. Read more

U.S. new car and light-truck sales returned to the fast lane in April, setting a monthly high that put Detroit automakers back on track to claim a record for 2016 profits and our Automotive MMI increased as well.

Automotive_Chart_May-2016_FNL

Industry volume hit 1.5 million vehicles last month, a 3.6% increase year-on-year, according to data provider Autodata Corp., for a seasonally adjusted annualized pace of 17.4 million vehicles. That puts U.S. automakers on track for a second consecutive annual sales record.

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Honda led major automakers with a 14.4% sales increase as both its cars and SUVs sold well, while Nissan‘s sales rose 12.8%. Fiat Chrysler was up 6% on record Jeep sales, and Ford rode an April record for SUV sales to a 4% increase. Toyota sales rose 3.8% largely because of the RAV4 small SUV, which broke a monthly record with sales up nearly 32%.

Only General Motors and Volkswagen saw sales declines with GM blaming a 3.5% drop on a strategy of cutting low-profit sales to rental car companies. VW sales fell almost 10% as its emissions-cheating scandal continued.

The U.S. isn’t the only auto market on an upswing. European sales have been steadily rising for a few years and many of the markets in the Asia-Pacific region are growing, although at a more tepid pace than earlier this decade.

This month, we saw U.S. Steel file a section 337 case, alleging hacking and theft of intellectual property, against China. The suspected hacker stands accused of stealing the formula, production setup and even melting temperature for high-strength, automotive alloy Dual-Phase 980. U.S. Steel contends that the alloy showed up as a Baosteel product shortly after it was hacked.

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While individual cases like this one are not likely to affect the fundamentals of the automotive steel market, it does illustrate just how coveted a market automotive has become for high-strength steel, even as aluminum has not been as widely adopted as many predicted it would be by now, after Ford became the first automaker to make the jump.

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Details of another hack are at the heart of U.S. Steel‘s section 337 complaint, including what it calls theft of lucrative automotive alloy Dual-Phase 980. Chinese commodity futures trading volumes are hitting records despite attempts by regulators there to rein in speculation.

U.S. Steel Alleges Dual-Phase 980 Stolen by China

According to filings with the International Trade Commission, U.S. Steel claims a forensic analysis into an alleged 2011 illegal hack of its systems by culprits based in China — one that used a similar method as the confirmed 2014 hack of U.S. Steel and other companies by the Chinese military — included stealing plans for the chemistry for an automotive specialty steel alloy and its coating, the necessary temperature for heating and cooling the metal and the proper layout of its production lines.

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The automotive steel is one of U.S. Steel’s most popular products, Dual-Phase 980, that can withstand more than 140,000 lbs. per square inch, making it a light, strong metal coveted in the lucrative automotive market for its safety as well as its ability to meet government weight standards.

Two years after the 2011 hacking, China’s Baosteel Group, the world’s fourth-largest steelmaker, started selling a new line of products that included Dual-Phase 980. U.S. Steel says it can prove to the ITC that the product was stolen in the 2011 hack.

Chinese Commodity Futures Hitting Records

Commodity futures linked to China’s vast steel sector rebounded sharply on Friday, Reuters reported, led by iron ore and rebar, as robust construction demand spurred buying even as the country’s regulator ordered exchanges to rein in speculative trading.

Big bets on Chinese commodities futures this year from hedge funds, retail investors and others have driven up contracts on everything from iron ore to cotton, prompting many analysts to warn of parallels with a boom in China’s stock markets that ended in a sharp crash last summer.

Steelmaking raw materials iron ore, coking coal and coke ended April with their biggest monthly gain on record.

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Rebar, a construction steel product, also posted its biggest monthly rise ever, with volumes in the most-traded contract in Shanghai hitting a record 1.4 billion metric tons, enough to build San Francisco’s Golden Gate Bridge more than 15,000 times over.

U.S. Steel is accusing Chinese steelmakers of intellectual property theft and Germany is subsidizing its electric car industry.

U.S. Steel Files Section 337 Petition

U.S. Steel Corp. has launched a campaign to prevent imports from China’s largest steel producers, it said on Tuesday, the boldest step yet by a U.S. company as a trade brawl with the world’s largest steel producer escalates.

In a complaint to the U.S. International Trade Commission, the domestic steelmaker called on regulators to investigate dozens of Chinese producers and their distributors for allegedly conspiring to fix prices, stealing trade secrets and circumventing trade duties by false labeling.

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The petition, known as Section 337 is used to protect against intellectual property theft, listed some of China’s top producers, including Hebei Iron & Steel Group and Anshan Iron and Steel Group and Shandong Iron & Steel Group Co.

“We have said that we will use every tool available to fight for fair trade,” said U.S. Steel Corp President and Chief Executive Officer Mario Longhi in a statement.

Germany Subsidizes Electric Car Development

Germany’s auto industry risks being overtaken by foreign competitors unless it receives greater domestic support, the country’s economy minister said today, announcing a 1 billion euro ($1.13 billion) plan to subsidize electric cars that are seen as the technology of the future.

Electric vehicles have had a sluggish start in Germany, the country where the combustion engine-powered automobile was born. A government plan to get 1 million e-cars on the streets by 2020 is far behind schedule, with just 50,000 sold so far.

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“After a long debate we have agreed to a subsidy program that aims to show on the home market that we can master these new drive trains, from plug-in hybrid to battery-powered vehicles, and make them suitable for the mass market,” Economy Minister Sigmar Gabriel said at a news conference in Berlin.

Just a month after BMW proudly announced it was shifting its development strategy toward more all-electric vehicles (EVs) and autonomous technology in order to address a “new era” in the industry, the company was rocked by the defection of the core development team of its i3 and i8 electric vehicle lineup.

The embarrassing part is the defection isn’t to another automotive major but to Future Mobility Corp., a Chinese startup backed by Tencent Holdings, a Chinese investment company. The move underlines how established “old world” firms in the automotive sector are struggling to compete with start-ups and newcomers in the EV and hybrid market.

Who Left BMW for Future Mobility?

The WSJ reports that Carsten Breitfeld, a 20-year BMW veteran who developed the company’s i8 plug-in hybrid sports car, left the Munich-based automaker last month to become chief executive of the Chinese electric car company. Now, three key executives from the “BMW i” electric car group are following him. Dirk Abendroth, who developed electric powertrains for the i-series, Benoit Jacob, who was head of design at BMW i, and Henrik Wenders, head of BMW i product management.

AdobeStock_ joel_420_electric_car_550_042016

BMW is betting on electric cars for its future, but Future Mobility just poached its entire i team. Source: Adobe Stock/Joel 420.

One would like to think they are not being simply lured by money, creative professionals of this caliber will be more motivated by being at the cutting edge of development and technology than euros in the pocket and BMW, for all their media hype, have failed to make a success of their electric vehicles division.

BMW Slows Electric Car Development

According to the WSJ, BMW has slowed development of future models. Last year, BMW sold 24,057 i3 models, and 5,456 i8 models, a 66% increase in BMW i division sales but paltry by the standards of a volume automaker. Read more

U.S. auto sales increased 3% in March over a year earlier, but warning signs emerged that car companies are stretching to keep demand humming after record results last year.

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March’s selling pace came in at an adjusted annual rate of 16.57 million light vehicles, well below analyst expectations and the 17.5 million clip the industry reported in February. Detroit’s big three automakers each reported sales gains, but their results missed expectations, sending shares lower. Automakers overall sold 1.6 million light vehicles in March.

Automotive_Chart_April-2016_FNL

Automotive remains a coveted market for both steelmakers and aluminum smelters and the healthy price increase of 5.9% in our Automotive MMI reflects that. Automotive metals also got a boost from copper as the wiring metal also posted an increase this month, reversing a long flat streak.

Fiat Chrysler Automobiles said sales rose 8% to 213,187 vehicles in March. Ford Motor Co. sales rose 7.8% over a year earlier to 253,064 vehicles. General Motors’ sales edged up less than 1% to 252,128.

While those numbers might be cause for concern, long-term, they’re certainly not being felt in raw materials purchases by the Detroit automakers yet. Almost all of the component prices of our Automotive MMI were up in March and the phenomenon looks like it’s global with Chinese prices (mostly) joining U.S. and Korean ones in marching higher in lockstep.

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The China Automobile Dealers Association said at its monthly news briefing that one-third of dealers it surveyed said demand increased in March, up from 2.7% in February, with the survey predicting stable demand this month.

Expect steel and aluminum companies to continue to aggressively court automotive customers, especially as new automobile technology, such as Tesla Motors‘ new, less-expensive sedan is rolled out.

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Reading Toyota Motor Corp.‘s media releases, you would think the firm’s support of hybrids and fuel cell cars is all about saving the environment.

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While we don’t doubt the commitment of both, the firm and its management to such ethical pursuits, Toyota’s stated vision for the future has as much to do with hard-headed realism. Toyota is reading the writing on the wall with its environmental motives. The auto industry is engaged in the greatest technological endeavor since the early development of the gasoline engine 100 years ago.

Pioneering the Prius

Toyota can be said to have led the way with the commercial development of gasoline-electric hybrid technology, in the face of considerable skepticism when the firm pioneered it with the Prius in 1997. Since then, Toyota now has its fourth incarnation of the class-leading hybrid and has delivered more than 8 million cars according to the Fincancial Times, with the Prius in all its versions accounting for nearly half of it’s domestic sales.

Hybrid Car

Toyota changed the game with the Prius, can it do so again with hydrogen fuel-cell cars? Source: Adobe Stock/6th Gear.

Automakers are being driven by both public sentiment and government regulation to play their part in dramatically reducing global carbon emissions. The industry recognizes this and is quietly pouring an immense amount of resources, money and talent into finding solutions. Read more

The London Metal Exchange is looking to make large positions more transparent and India is not applying its new steel quality standards to automotive imports. At least not yet.

LME Wants Transparent Reporting

The London Metal Exchange said on Thursday it’s seeking views from its members and other interested parties about the potential for more transparent reporting of positions above certain thresholds.

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The LME monitors all positions held on its market, what it is proposing is a measure to put the onus of reporting any large positions on members.

India Sets New Steel Quality Standards

India imposed new quality standards on steel products sold in the country Thursday, but delayed bringing auto-grade steel imported by automakers under the purview of the new order by six months.

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Indian automakers import about 1 million metric tons of high-tensile steel annually, mainly from Japan and South Korea, and had sought an extension to avoid disruption in production.