US Steel Imports, Copper Price Drive Automotive Metals Index Into Some Bumps

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MetalMiner’s monthly Automotive MMI® has hit some bumps in the road – but the wheels haven’t quite fallen off yet.

Automotive_Chart_March-2015_FNL

Our automotive metals price index fell to 85 in March, a decrease of 2.3% from 87 in February. While automotive continues to be one of our stronger metal sectors, particularly aluminum and palladium used in automotive applications, it’s being dragged down by crude oil and other commodities that are keeping prices low.

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Despite a relatively healthy US automotive industry and strong results from manufacturers of original equipment (OEMs), prices are not rising for automotive raw materials such as steel and copper. Copper prices are a big component of our Automotive MMI® and their free-fall continues (even though the 3-month LME copper price inched up a bit this month). General Motors recently cut production of some of its more popular models as the cars are sitting on dealer lots awaiting buyers despite low prices and abundant supply of materials.

Russian Steel Imports of Much Import

Thanks to the war in Ukraine and economic sanctions, Russia’s steel costs are now the lowest in the world and, as with gold before it, Russian steelmakers such as Severstal and Novolipetsk Steel are taking advantage of the situation by exporting heavily and getting paid in dollars and euros for the same steel – whose production is paid for by rubles that are worth at least 50% less.

US HRC and HDG both lost significant price territory to US steel imports this month, as US producers cut prices in an attempt to compete with the imports. According to recent figures released by the American Iron and Steel Institute (AISI), US steel imports rose 33% in January compared with the year before, reaching 3.85 million tons, compared with 2.9 million tons a year earlier, as reported by the WSJ. “The jump in imports comes as oil and gas drillers cancel orders for steel pipe, underscoring the resilience of overall U.S. demand compared with other markets,” according to the Journal. The continuing decline in the price of iron ore is also a factor in falling steel prices.

Kobe, POSCO, Apple Still Investing

Low commodity prices, however, are not stopping producers from making major investments in automotive plants and production lines. The world’s third-largest steelmaker, South Korea’s POSCO, recently opened a $709 million plant in western India. Japan’s Kobe Steel is also planning an automotive aluminum plant in the US for Japanese automakers with operations here.

Apple has even been rumored to be working on a secret automotive project that may or may not resemble a minivan.

Automotive is like many other metal-consuming sectors in that it will be a healthy and highly productive industry whenever commodity prices finally recover. Right now it’s merely a waiting game.

For MetalMiner members, detailed prices of our automotive metals are below. And if you’re tracking US HRC/HDG steel or copper prices, check out our price forecasting.

Exact Metal Price Movements: Automotive MMI®

* Get the complete prices every day on the MetalMiner IndX℠

The price of US HDG fell 6.9% to $662.00 per short ton. A 6.2% drop over the past month left Korean 5052 coil premium over 1050 sheet at $3.64 per kilogram. After falling 5.3%, US platinum bar finished the month at $1,172 per ounce. The Chinese lead price saw a small decline this month, falling from CNY undefined ($2,021) to $1,989 per metric ton.

After dropping the previous month, the 3-month price of copper prices rose 7.0% on the LME to $5,840 per metric ton. The cash price of primary copper rose 6.9% on the LME to $5,880 per metric ton after falling the previous month. After dropping the previous month, the price of US palladium bar prices rose 4.9% to $807.00 per ounce.

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.

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