Articles in Category: Automotive

Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner, including aluminum prices, rising power costs and much more:

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Week of Oct. 11-15 (aluminum prices, power costs and more)

aluminum price

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This morning in metals news: miner Anglo American announced the results of a feasibility exploring the potential for hydrogen in the South African economy; General Motors last week announced plans to double its revenue; and, lastly, steel prices have showed signs of flatlining of late.

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Anglo American explores role of hydrogen in South Africa

green hydrogen

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In collaboration with several parties, miner Anglo American recently conducted a feasibility study “to explore the potential for a hydrogen valley anchored in the platinum group metals-rich Bushveld geological area, along the industrial and commercial corridor to Johannesburg and to the south coast at Durban.”

“The opportunity to create new engines of economic activity through hydrogen has been validated through this feasibility study with our partners,” said Natascha Viljoen, CEO of Anglo American’s PGMs business. “As a leading producer of platinum group metals (PGMs), we have for some years been working towards establishing the right ecosystem to successfully develop, scale-up and deploy hydrogen-fuelled solutions.”

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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Week of Oct. 4-8

coal pile

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The MetalMiner 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 2022.

The Automotive Monthly Metals Index (MMI) held flat for this month’s reading, as U.S. auto sales slumped in Q3.

October 2021 Automotive MMI chart

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US auto sales slip in Q3

General Motors reported its third-quarter sales fell from 665,192 vehicles in Q3 2020 to 446,997 vehicles in Q3 2021, a 32.8% drop.

The automaker cited semiconductor supply chain disruptions and “historically low inventories.”

“During the quarter, GM provided an update for investors that its wholesale volumes in North America in the second half of 2021 would be down about 200,000 units from the first half, largely because of supply chain disruptions in Malaysia caused by COVID-19, with most of the impact occurring during the third quarter,” the automaker said. “GM’s financial outlook is still expected to be within the calendar year guidance range previously provided as the company continues to develop solutions to mitigate the impacts of the semiconductor shortage and Chevrolet Bolt EV recall.”

Meanwhile, Ford reported total sales in the U.S. fell 17.7% in September. Unlike its truck and car segments, Ford SUV sales jumped by 3.4%.

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Just over a year ago, MetalMiner commented on the acquisition of most of ArcelorMittal USA’s assets by Cleveland-Cliffs (including potential impacts on steel prices).

Source: MetalMiner

At the time, the MetalMiner analyst team suggested, “The deal strengthens the company’s position in the automotive sector. The company likely controls 60%-65% of exposed auto sheet supply (think steel used on the outside of a car).” The analyst team continued, stating, “Biggest loser? Automotive OEMs like General Motors, Ford, Honda and Toyota.”

Fewer suppliers always results in less competition. Always.

Also as predicted by MetalMiner and confirmed by several people familiar with the matter, Cleveland-Cliffs has implemented firmwide standard pricing across all of its assets. As such, any “lower” pricing available previously in the market — through AK Steel, for example — now sells at the ArcelorMittal price (seemingly higher price level). MetalMiner identified that as an obstacle to automakers at the time. The reduction of three behemoth integrated mills to two drastically lowers competition.

At the same time, all of the steel mills have taken a very disciplined approach to adding (or rather, not adding) capacity to the market. The headline capacity utilization rate remains well above 80%. However, the numbers relate to the actual lines in operation, not total U.S. steelmaking capacity.

According to Bloomberg, U.S. steel consumption is estimated to reach 104 million tons this year and 108 million tons in 2022. However, domestic production was forecast to reach 87 million tons, a shortfall of 17 million tons.

Interested in additional perspectives on steel buying strategies outlined in this article? Join Lisa and Don on Thursday September 30 at 11:30 

Steel producers enjoying record profits amid strong steel prices

Meanwhile, Nucor expects record earnings in the third quarter of 2021. The chart below shows pre-pandemic quarterly market conditions using Q1 2019 compared with Q1 2021.

In short, two of the largest producers by capacity have both seen record earnings.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

Week of Sept. 20-24 (China’s property market and steel prices, global copper mine production and much more)

Chinese steel factory

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More MetalMiner is available on LinkedIn.

This morning in metals news: Mercedes-Benz, Stellantis and TotalEnergies will each take a 33% stake in Automotive Cells Company; meanwhile, the Semiconductor Industry Association offered its reaction to the Biden administration’s recent meeting on the semiconductor supply chain; and, lastly, the Energy Information Administration expects a rise in natural gas consumption in 2021 and 2022.

More MetalMiner is available on LinkedIn.

Automakers team up to scale battery project

electric car battery

Electric car lithium battery pack. (Nischaporn/ Adobe Stock)

Mercedes-Benz is collaborating with Stellantis and TotalEnergies to scale up production of the Automotive Cells Company.

Each partner will have a 33% stake in the battery cells manufacturer.

The project will cost more than €7 billion ($8.2 billion), Mercedes-Benz estimated.

“On its path toward an all-electric future, Mercedes-Benz is taking an equity stake in European battery cell manufacturer Automotive Cells Company (ACC) to scale up development and production of next-generation high-performance battery cells and modules,” Mercedes-Benz said. “As announced in July 2021, Mercedes-Benz will be ready to go fully electric by the end of the decade – wherever market conditions allow.”

To reach that goal, the German automaker said it will need battery production capacity of more than 200 Gigawatt hours.

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This morning in metals news: Alcoa said it plans to restart its Alumar aluminum smelter in Brazil; meanwhile, the Energy Information Administration forecasts hydropower generation will fall by 14% this year; and, lastly, European automakers are looking to bypass China in their rare earths supply chains.

Are you under pressure to generate aluminum cost savings? Make sure you are following these five best practices

Alcoa to restart Alumar smelter

Alcoa logo

Casimiro/Adobe Stock

Alcoa this week announced plans to restart its Alumar aluminum smelter in Brazil.

The smelter has been fully curtailed since 2015. The facility has annual capacity of 268,000 metric tons.

“The process to restart the idle capacity will begin immediately,” Alcoa said. “The first molten metal is expected in the second quarter of 2022, and the full 268,000 mtpy of capacity is expected to be operational in the fourth quarter of 2022. By 2024, the Alumar smelter will be powered with 100 percent renewable energy.”

Hydropower hit by drought

Speaking of renewable energy, the EIA forecasts hydropower generation to decline by 14% this year.

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The U.S. steel capacity utilization rate fell slightly but remained at a healthy 84.9% for the week ending Sept. 18, the American Iron and Steel Institute reported this week.

Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?

Steel capacity utilization hits 84.9%

hot-rolled coil steel

taitai6769/Adobe Stock

U.S. steel capacity utilization last week fell to 84.9%, down from 85.3% the previous week. However, the rate remains up significantly from the 68.6% during the same week in 2020.

U.S. steel output last week totaled 1.87 million net tons. The total marked a 0.4% decline from the previous week.

However, steel output increased by 21.9% on a year-over-year basis.

For the year to date, production totaled 67.66 million net tons, AISI reported. Meanwhile, steel capacity utilization during the period reached 80.9%.

Production in the year to date is up 20.2% from the same period last year, when the capacity utilization rate reached 66.8%.

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This morning in metals news: Ford Motor Co. is collaborating with Redwood Materials on a closed-loop battery recycling and building out the domestic electric vehicle battery supply chain; Norway will expand natural gas exports to Europe; and, lastly, aluminum prices have slowed down after peaking Sept. 13.

Many may be wondering how to set buying strategies for 2022 with so many variables in the air. The old saying goes, “Nothing kills high prices like high prices” — but does that still hold true?

Ford, Redwood to team up on closed-loop battery recycling

Ford logo

Tobias Arhelger/Adobe Stock

Ford Motor Co. announced it will collaborate with battery materials company Redwood Materials on closed-loop battery recycling.

The companies also said they will work together to build out a domestic battery supply chain.

“Ford and Redwood are collaborating to integrate battery recycling into Ford’s domestic battery strategy. Redwood’s recycling technology can recover, on average, more than 95% of the elements like nickel, cobalt, lithium and copper,” the automaker said. “These materials can be reused in a closed-loop with Redwood moving to produce anode copper foil and cathode active materials for future battery production. By using locally produced, recycled battery materials, Ford can drive down costs, increase battery materials supply and reduce its reliance on imports and mining of raw materials.”

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