As the US economy grew at an estimated rate of 2 percent in the third quarter, it looks as though consumers are coming back to markets, including the automotive sector.
However, the fiscal cliff looms pretty large.
Nigel Gault, chief United States economist for IHS Global Insight, told the New York Times “that while the uncertainty hanging over businesses did not seem to be affecting consumers, that could change if Washington did not avert a wave of tax increases and automatic spending cuts set to go into effect early next year. This so-called fiscal cliff is already being blamed for a chill in spending on equipment and software by businesses, which fell 0.1 percent in the third quarter.”
But some in the far-downstream sector of the auto industry are not so concerned, and think that auto sales will continue to rise. “We’ve plowed through high gas prices. We’re plowing through fears of a fiscal cliff,” said AutoNation Inc. CEO Mike Jackson in an AP article, whose company just posted a 15-percent third quarter profit. “The replacement need is genuine. It’s going to drive the market forward for the next several years.”
Lower Metal Pricing: Good News for Automotive OEMs
The week’s biggest mover on the weekly Automotive MMI® was the price of US palladium bar, which saw an 8.9 percent decline. This comes on the heels of a 0.8 percent increase the week before. The price of US platinum bar also decreased, down 6.4 percent from the previous week.
The price of US HDG steel fell 2 percent over the past week. This was the third week in a row of declining HDG prices.
The primary LME copper cash price fell to $7,860 per metric ton after a 3.2 percent decrease from the previous week. Closing out the third week of declining prices, the 3-month price of copper dropped by 3.1 percent on the LME, finishing at $7,859 per metric ton.
Chinese lead prices finished the week down 1.4 percent. Following a steady week, prices for Korean 5052 coil premium over 1050 aluminum sheet closed flat.
The Automotive MMI® collects and weights 7 metal price points used in automotive production to provide a unique view into automotive metal trends. For more information on the Automotive MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.