There was no joy in automotive metals this month as prices retreated again amid ample supply and not enough worldwide demand.
The monthly Automotive MMI® registered a value of 76 in August, a decrease of 7.3% from 82 in July, another all-time low for the index. Before the last two months, its previous low was 85.
Steel Prices Falling
Base metals remain in a bearish market, one that’s starting to edge on historic proportions. Also, a glut of imported steel in the US market continues to drive down prices domestically while the lack of demand overseas only exacerbates the problem here.
US steelmakers have been forced to rely on anti-dumping actions again in hopes of creating some semblance of market equilibrium.
Steel is not the only ingredient in the Automotive MMI and its fall has been helped along liberally by steep falls for aluminum, palladium, platinum and copper.
Vehicle Sales Faltering
At least in the US, sales of automobiles are still strong, too. A sales collapse in China is one of the many effects of the stock market crash and slow economic growth there.
“There’s excessive competition and automakers are building excess capacity, and to raise utilization of the plants, they will engage in excessive selling,” Fumihiko Ike, chairman of the Japan Automobile Manufacturers Association, said in reference to the market many are looking at to create global sales increases.
The Chinese market is generally regarded as one that provides higher sales margins to manufacturers and Volkswagen, BMW and other manufacturers are taking on a hit on sales there.
With a continuing metals surplus and only the US end-user market in decent shape, it’s difficult to predict a turnaround for the Automotive MMI. The Thomson Reuters/Jefferies CRB Commodity Index is hitting new lows as well.
Actual Automotive Metals Prices
US palladium bar prices dropped by 9.5% this month to $609.00 per ounce. The 3-month price of copper declined 8.9% on the LME over the month to $5,220 per metric ton. The price of US platinum bar closed the month at $982.00 per ounce after dropping 8.8%.
On the LME, the primary copper cash price fell 8.8% to $5,218 per metric ton. A 6.3% drop over the past month left Korean 5052 coil premium over 1050 sheet at $3.14 per kilogram. US HDG prices fell 1.7% to $584.00 per short ton after rising the previous month.
The Chinese lead price increased 0.8% to $2,139 per metric ton.