Automotive MMI: New-vehicle retail sales in U.S. forecast to rise for second straight month

The Automotive Monthly Metals Index (MMI) gained 3.3% for this month’s MMI reading, as October 2020 auto sales made gains on a new-vehicle retail basis.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

October 2020 auto sales

Hyundai reported its October 2020 auto sales rose 1% year over year, with sales of 57,395 units.
Honda reported its October 2020 auto sales fell 3.4% down to 126,987 units.
As for automakers reporting quarterly results, Fiat Chrysler said last month its Q3 sales fell 10% year over year.
Ford, meanwhile, last month reported its total sales in the U.S. fell 4.9%.
General Motors reported Q3 deliveries fell 10% year over year.
Nissan reported Q3 sales of 221,150 units, down 32.4% year over year.

New-vehicle retail sales rise

For the industry as a whole, J.D. Power and LMC Automotive forecast new-vehicle retail sales in October would increase 3.0% year over year when adjusted for selling days.
Meanwhile, they forecast U.S. total sales in October will fall by 4.5% from October 2019.
“Two consecutive months of year-over-year retail sales increases demonstrates that consumer demand is showing remarkable strength,” said Thomas King, president of the J.D. Power data and analytics division. “The strong sales pace is occurring despite tight inventories. The combination of strong demand and lean inventories is enabling manufacturers to reduce new-vehicle incentives and is allowing retailers to reduce the discounts they typically offer on new vehicles.”
Meanwhile, Cox Automotive estimated the seasonally adjusted annual rate (SAAR) of sales is expected to finish near 16.4 million.
“Given the severity of the health and economic crisis in the country right now, the strong vehicle sales pace is a pleasant surprise, particularly when six months ago most market observers didn’t expect us to be here,” said Charlie Chesbrough, senior economist at Cox Automotive. “Modest improvements in the U.S. economy from gains in consumer confidence and job creation, coupled with the roll-out of new MY2021 products, are keeping consumers interested in purchasing even during turbulent times.”

China auto sales rise 12.8%

Meanwhile, in the world’s largest automotive market, sales in China surged 12.8% year over year in September, according to the China Association of Automobile Manufacturers (CAAM).
Sales of passenger cars jumped 8.0%. In addition, SUV sales rose 16.0%.
As for commercial vehicles, sales rose 40.3%, including a 43.8% jump for commercial trucks.
Ford, along with its joint ventures, reported its Q3 2020 sales in China jumped 25.4% year over year. The year-over-year increase marked the largest since 2016. Sales increased 3.6% compared with Q2 2020.

Lead prices sideways

Lead, the demand for which comes significantly from the automotive sector, has not been supported of late.
The LME three-month lead price closed Tuesday at $1,819 per metric ton. While the price marked a 3.06% increase from the previous month, lead is well off its August peak.
After reaching $2,014 per metric ton on Aug. 20 — the highest level since $2,027 per metric ton on Jan. 16 — the price steadily declined throughout September.

Actual metals prices and trends

The U.S. HDG price rose 9.0% month over month to $924 per short ton as of Nov. 1.
The LME three-month copper price jumped 2.3% to $6,706 per metric ton.
The U.S. shredded scrap steel price gained 6.6% to $290 per short ton.
The Korean 5052 aluminum coil premium rose 2.8% to $3.25 per kilogram.
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