The Automotive MMI dropped for the first time since June, falling one point for an October reading of 93.
Much of the automotive basket of metals was stuck in neutral this month, but a few did show some notable movement. U.S. HDG steel dropped 1.7% and LME copper, one of the darlings of August, dropped 4.2%.
Chinese primary lead rose 8.7%. Our Irene Martinez Canorea wrote about environmentally-based smelter shutdowns in China, which supported the lead price.
“The Chinese environmental campaign has heavily impacted lead,” Martinez Canorea wrote. “According to research group Antaike, 80% of illegal secondary smelters have been shut down during the second half of 2017. China has also lost an important source of raw materials from North Korea due to its commitment to international sanctions.”
Palladium Pulls Past Platinum
One tidbit worth noting is the relationship between palladium and platinum. As of Oct. 1, palladium closed higher than platinum.
The last time that happened? Sixteen years ago.
According to a report by Kitco News, however, many analysts don’t expect palladium’s dominance over platinum to last.
The report attributes the price dynamic to a rise in demand in gasoline-powered vehicles and platinum’s fall alongside gold.
“Palladium is benefitting from its inclusion in catalytic converters in gasoline-powered vehicles, which is expecting robust growth from the shift from diesel engines following the 2015 Volkswagen emissions-rigging scandal, and hybrid electric vehicle demand,” according to a research note from commodities broker SP Angel quoted by Kitco.
Dr. Copper Loses Ground
After surging throughout the summer and hitting three-year highs, copper has been backsliding of late.
As of Oct. 1, LME copper dropped from the previous month’s closing price by 4.2%. The metal, often cited as a global indicator of economic health, lost steam in September like a number of other base metals, as Martinez Canorea wrote on Tuesday.
After a booming August, copper slowed down in September.
“Copper has retraced and the general downtrend has slowed down this month. However, the CRB commodities index has increased, something we had suggested might happen and something that signals a potential bull run,” Canorea wrote.
U.S. Auto Sales
In U.S. auto sales, light trucks continued to be a popular option for buyers. In the year to date, over 8 million units have been sold in the U.S., which is up 4.4% from the same time frame last year, according to sales data released Tuesday by Autodata Corp.
By month, September 2017 light truck sales hit 967,547 units, up 12.4% from September 2016. Meanwhile, sales of passenger cars dropped 3.3% last month compared with September 2016 and dropped 10.5% in the year to date (compared with the same time frame last year).
In short? Trucks continue to be in.
As for sales by manufacturer, General Motors led the way with 279,176 units sold, which was up 11.8% from its September 2016 sales total. On the year, however, GM’s sales are down 0.8%.
Similarly, Ford had a strong September, with sales jumping 8.9% from September 2016. However, like GM, Ford’s sales are down in the year to date (2.7%).
Reuters reported Tuesday that GM’s shares rose 3.1% and hit a record intraday high, while Ford’s stock rose 2.1%.
It wasn’t a great month for Fiat Chrysler. September sales dropped 9.7% year-over-year. In the year to date, the automaker’s sales are down 7.9%.
A number of other automakers boasted strong September 2017 sales figurers that raced past September 2016 sales.
Toyota (14.9%), Honda (6.8%), Nissan (9.5%), Volkswagen (22.8%) and Mitsubishi (17.2%) all had solid September year-over-year increases. In the year to date, all five of the aforementioned automakers have exceeded sales compared with the same time frame of last year — Volkswagen posted the largest year-to-date jump of that group at 7.8%.
Sales in China
According to the most recently available sales data from the Chinese Association of Automobile Manufacturers (CAAM), August automotive sales in China were up 5.3% year-over-year.
For the first eight months of the year, 17,511,000 units were sold, up 4.3% from the same time frame last year.
Volvo was among the big winners in China in September. Volvo’s September global sales rose 11.2% year-over-year. In China — Volvo’s biggest market — sales rose a whopping 29.8%, according to a company release. From January-September, Volvo’s Chinese sales are up 29.9% compared with the first three quarters of 2016.
Feeling the Electricity
Meanwhile, our Stuart Burns wrote about an announcement that could represent the rise of the electric vehicle (EV) in China, a shift that has massive implications for the automotive world.
China, the largest automotive market in the world, moving toward the EV constitutes a significant development, to say the least.
Burns covered the recent announcement from Beijing outlining the government’s plans to move toward EVs, as the country — and the world — prepares for the phaseout of vehicles powered by fossil fuels. The U.K. and France have made similar announcements this year, setting long-term goals to ban the sales of gas and diesel cars by 2040.
India, too, announced a push toward electrification earlier this year, with an ambitious goal of selling only electric vehicles by 2030.
For now, of course, these are merely government statements — actual implementation of the processes necessary, in both the public and private sectors, to reach these goals is another story entirely.
As for automakers, GM announced Monday its plans to move toward an all-electric fleet.
“General Motors believes in an all-electric future,” said Mark Reuss, General Motors executive vice president of product development, purchasing and supply chain. “Although that future won’t happen overnight, GM is committed to driving increased usage and acceptance of electric vehicles through no-compromise solutions that meet our customers’ needs.”
The automaker plans to introduce two new all-electric vehicles in the next 18 months, according to the GM announcement, and a total of at least 20 new all-electric vehicles by 2023.
Actual Metal Prices and Trends
U.S. HDG steel fell 1.7% to $800/short ton. U.S. platinum bars fell 8.8% to $910/ounce, while palladium bars stood pat at $928/ounce.
LME copper, meanwhile, cooled off after a hot August, dropping 4.2% to $6,530/metric ton.
Chinese primary lead rose 8.7% to $3,237.87/mt.