The monthly Automotive MMI® fell by 3 points this past month, largely due to falling copper and precious metals prices:
Ironically, steel prices rose between June and July, while steel scrap prices held steady.
“Despite the drop in prices for the metals that feed into the auto industry, the industry has performed very well,” said Lisa Reisman, managing editor of MetalMiner. “In fact, June posted fabulous sales numbers, particularly for pick-up trucks and fleet demand.”
How should one reconcile the performance of the automotive metals index against monthly auto sales?
“We believe the Automotive MMI® leads, as opposed to lags or acts as a coincidental indicator,” said Reisman. Moreover, the chief economist at General Motors indicated that as long as the automotive OEMs do not need to rely upon heavy incentives and/or price discounts, demand remains strong. 2013 sales so far are looking as though they will match 2007 sales.
Nevertheless, the MetalMiner automotive index suggests caution, particularly in light of all of the other metal price indexes.
Key Index Price Drivers
The price of US HDG climbed 3.2 percent.
But US palladium bar prices fell 12.0 percent after rising the previous month. The price of US platinum bar closed the month after dropping 7.9 percent. On the LME, the 3-month price of copper fell 7.0 percent over the past month to $6,776 per metric ton. On the LME, the cash price of primary copper closed the month at $6,751 per metric ton after dropping 6.8 percent. After rising the previous month, Chinese primary lead prices dropped 0.9 percent.
Korean 5052 coil premium over 1050 sheet did not budge the entire month.
The Automotive MMI® collects and weights 7 metal price points used in automotive production to provide a unique view into automotive metal trends over a 30-day period. 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.