Automotive MMI: Ford returns to monthly sales reporting

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The Automotive Monthly Metals Index (MMI) gained 9.6% for this month’s index value, as U.S. auto sales continue to show resilience.
December 2020 Automotive MMI chart
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U.S. auto sales

General Motors switched from monthly to quarterly sales reporting in 2018; Ford followed suit in early 2019.
However, despite the industry trending toward quarterly reporting, Ford has apparently had a change of heart.
The automaker last month announced it would return to quarterly reporting. Ford reported November U.S. sales of 149,931 vehicles, down 20.9% year over year.
Ford truck sales fell 20.9%, while SUV and car sales fell 16.4% and 39.1%, respectively.
Among other monthly reporters, Honda reported November sales fell 23.4% year over year. Honda car sales fell 26.9% and truck sales fell 21%.
Hyundai sales fell 9% year over year in November.
“We were able to maintain our industry-beating sales momentum despite quirks in the reporting calendar and added COVID-19 challenges,” said Randy Parker, vice president of national sales at Hyundai Motor America.

U.S. auto sales forecast to nearly match 2019 levels in November

According to the most recent automotive forecast released by J.D. Power and LMC Automotive, new-vehicle retail sales were forecast to drop 0.7% in November when accounting for changes in selling days.
Meanwhile, for total U.S. auto sales, the forecast included a 3.5% decrease when adjusted for selling days.
“November 2020 is a prime example of why accounting for selling day differences is important in measuring comparable sales performance,” said Thomas King, president of the data and analytics division at J.D. Power. “After two consecutive months of year-over-year retail sales gains, a quirk in the November sales calendar will result in new-vehicle retail sales appearing to fall 12%. This year, November has three fewer selling days and one less selling weekend compared with 2019. When these calendar quirks are accounted for, new-vehicle retail sales are expected to almost match 2019 levels.”

Steel and automotive demand

Recovering automotive demand and auto sales on the heels of production shutdowns earlier this year — stemming from the onset of the COVID-19 pandemic — has boosted steel demand, in the U.S. and elsewhere.
In Japan, Nippon Steel cited automotive demand in its Dec. 4 interim report.
“We have recently decided to expand our manufacturing facilities of electrical steel sheets to respond to demand growth from the automotive and electric power sectors and needs for higher-grade products,” the report stated.
Japanese steel demand declined by 20% during the first half of the year, Nippon Steel added. Japanese steel demand totaled 25.1 million tons in the first half of the year.
However, Nippon forecast demand to rise to around 26.6 million tons in the second half, “mainly driven by a recovery in the automotive and other manufacturing sectors.”
Even so, Nippon tempered the ascendant demand narrative.
“The level of demand, however, is low compared to the pre-COVID-19 levels,” Nippon said.
With the uptick in demand, Nippon Steel said it will resume certain operations.
“In light of the demand outlook, we plan to resume operation of the No. 2 blast furnace in the East Nippon Works Kimitsu Area and to start operating a blast furnace in the Muroran Works upon completion of its relining in late November, 2020,” Nippon said. “In the second half of fiscal 2020, crude steel production volume is expected to reach 18.10 million tons, an increase of 3.46 million tons from the first half.”

Actual metals prices and trends

The U.S. HDG price rose 11.0% month over month to $1,026 per short ton as of Dec. 1. U.S. shredded scrap steel held flat at $290 per short ton.
Meanwhile, the LME three-month copper price jumped 14.5% to $7,681 per metric ton.
The Korean 5052 aluminum coil premium ticked up 2.4% to $3.33 per kilogram.
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