Articles in Category: Automotive

Ford Motor Co. held its quarterly earnings call Jan. 24, during which company officials also overviewed 2017 as a whole.

Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook

The company reported 4Q 2017 revenue of $41.3 billion, up $2.6 billion year over year. For fiscal year 2017 as a whole, Ford posted revenue of $156.8 billion, up $5 billion from 2016.

The overall theme of the call, however, was that the fourth quarter — and 2017 as a whole — was challenging, but that the future is bright.

“2017 overall was challenging, including the fourth quarter,” Chief Financial Officer Bob Shanks said. “It also, however, was a year of progress.”

Adjusted pre-tax profit for 4Q was $1.7 billion, down $0.4 billion, mostly attributable to higher commodity costs and adverse exchange, Shanks said.

President and CEO Jim Hackett said the company is working to improve its fitness by “resetting revenue and attacking costs” in the short term and also “redesigning our business to compete and win in the future.”

However, preparing for the future involves much more than mere cost-cutting, he added. Among other initiatives, Hackett highlighted expanded investment in the company’s plant in Flat Rock, Michigan, in addition to acceleration of its electrical vehicle plans with an $11 billion investment.

Looking to 2018, Shanks said they expect company revenue to be “up to flat,” supported by 23 global product launches this year compared to 11 launched in 2017.

Shanks mentioned commodities price increases’ impact on the company’s bottom line. He added that as of the end of January, a little over one-third of Ford’s commodities exposures for 2018 will be “locked in through fixed contracts, hedges or purchases made.”

Commodity prices have picked back up to levels seen a few years ago, he pointed out, with about two-thirds of the effects on Ford coming in the form of steel and aluminum.

However, Shanks said despite’s Ford turning to aluminum — which is lighter and offers better fuel economy but is more expensive than steel — for some newer models, like its F-150 truck, the metal accounts for less than 25% of Ford’s impact. (According to MetalMiner IndX data, the LME primary cash aluminum price has jumped 22% year over year, up to $2,237/metric ton as of Jan. 29.)

“Really, steel is the story and other metals,” Shanks said during the question-and-answer portion of the call. “Aluminum as well, but maybe not as much as what you had expected.”

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

This year will prove to be one of change and adaptation for the company.

“We’re looking forward to 2018,” Shanks said. “This is an important year in our journey to redefine and reshape Ford through our fitness initiatives and the strategic decisions we continue to make to become the world’s most trusted mobility company.”

This morning in metals news, the U.S. team looks for “breakthroughs” in the renegotiation of the North American Free Trade Agreement (NAFTA), more than 25,000 British Steel pension members did not respond to a consultation about the future of their pension pots and zinc hits a 10 1/2-year high on supply concerns.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

NAFTA Talks Continue

The sixth round of talks focused on the trilateral trade agreement kicked off last week in Montreal. According to Reuters, the U.S. blocked a Canadian proposal to unblock modernization of the 24-year-old trade deal, instead looking to accelerate negotiations in the hopes of reaching “breakthroughs.”

According to the Reuters report, however, U.S. Trade Representative Robert Lighthizer said the talks have been moving too slowly.

The negotiating teams previously hoped to reach some sort of deal before the end of 2017, as each country will host important elections this year (including the Mexican presidential election). However, talks dragged on, as Mexico and Canada bristled at what they perceived to be overly demanding requests from the U.S., such as the suggestion of a sunset clause for the deal and stricter rules of origin for automotive materials.

Responses Needed on Plans of British Steel Pension Members

More than 25,000 British Steel pension members have not responded to a consultation regarding the future of their pension pots, according to the BBC.

The British Steel Pension Scheme was spun off from Tata Steel‘s steel business, a precursor to the merger with ThyssenKrupp.

Zinc Continues to Rise

Amid supply concerns, zinc prices rose to a 10 1/2-year high, according to Reuters.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

According to the report, metals rose ahead of tonight’s State of the Union address, in which investors will look for President Donald Trump to offer details on potential infrastructure work.

Zerophoto/Adobe Stock

This morning in metals news, Indian crude steel production jumped 6.2% in 2017, a Swiss steel firm was chosen to buy a troubled French steelmaker and Novelis announced that its aluminum will be supplied for the 2018 Jeep Wrangler.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Indian Crude Steel Production Rises

India saw its crude steel production jump 6.2% in 2017, according to the World Steel Association’s recent report.

Indian production hit 101.4 million tons, the Economic Times reported.

Schmolz+Bickenbach to Buy Ascometal

A Strabourg court tapped Swiss firm Schmolz+Bickenbach to buy French steelmaker Ascometal, Reuters reported.

The Swiss firm won out over a bid from Liberty House, according to the report. Ascometal filed for court protection in November, Reuters reported.

Novelis Aluminum in the New Jeep Wrangler

Novelis announced today that its aluminum will be supplied for the new 2018 Jeep Wrangler.

“Novelis is proud to offer our unrivaled production capabilities and extensive technical expertise to one of the world’s most iconic vehicles,” said Marco Palmieri, SVP and president of Novelis North America, in a company release. “We work alongside our customers from program development to launch to meet the industry’s evolving needs.”

Although aluminum is more expensive than steel, its lighter weight offers higher fuel economy. As such, several automakers, including Ford, have turned to aluminum for some of their newer models.

Want to see an Aluminum Price forecast? Take a free trial!

“Novelis aluminum offers a safe, sustainable and cost-effective way to lightweight vehicles,” said Ganesh Panneer, vice president and general manager of Novelis North America’s automotive division, in the company release. “Automotive aluminum applications result in better performance and agility, increased fuel economy and reduced carbon emissions.”

Pavel Ignatov/Adobe Stock

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

Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook

Want to see an Aluminum Price forecast? Take a free trial!

The rise of aluminum in the automotive industry is something we’ve kept tabs on here, as some automakers have opted for the lightweight metal for their models, as opposed to steel.

Lower your aluminum spend – Take a free trial of MetalMiner’s Monthly Outlook!

Not surprisingly, there are passionate supports of each metal, who will tell you why one is better than the other.

For supporters of aluminum — or, more importantly, automotive brands moving toward aluminum-intensive vehicles — the recent North American International Auto Show in Detroit offered some good news.

Aluminum-intensive vehicles were recognized during the show, which opened Jan. 13 and comes to an end Jan. 28.

The 2018 Lincoln Navigator was named Truck of the Year and the 2018 Honda Accord was named Car of the Year in the North American Car, Utility and Truck of the Year (NACTOY) Awards, which were announced Jan. 15. According to the aluminum Association, the awards marked the second straight year in which an aluminum-intensive vehicles has won a NACTOY award.

According to the Aluminum Association announcement, the 2018 Lincoln Navigator’s all-aluminum body dropped the car’s weight by 200 pounds. The 2018 Honda Accord, meanwhile, is lighter by 110 to 176 pounds, depending on the trim, according to the announcement.

“It’s no wonder Car and Truck of the Year winners innovate with aluminum,” said Heidi Brock, president and CEO of the Aluminum Association, in a prepared statement. “From performance, safety and durability, to fuel economy, battery range and emissions, aluminum delivers in every category consumers demand in new cars and trucks. That’s why recent surveys of automakers confirm aluminum is the fastest growing material, leading the multi-material trend. It’s also why the U.S. aluminum industry invested more than 2.3 billion dollars in domestic automotive capacity and we’re poised to invest further as our customers continue to innovate with aluminum in next generation automobiles.”

Other finalists at the show included:

  • The 2018 Ford Expedition (NACTOY Truck of the Year finalist)
  • 2018 Alfa Romeo Stelvio (NACTOY Utility of the Year finalist)
  • 2018 Honda Odyssey (NACTOY Utility of the Year finalist)
  • 2018 Toyota Camry (NACTOY Car of the Year finalist)
  • 2018 Kia Niro (NACTOY Utility of the Year semi-finalist)
  • 2018 Lexus LC500 (NACTOY Car of the Year semi-finalist)
  • 2018 Hyundai Ionic (NACTOY Car of the Year semi-finalist)
  • 2018 Audi A5 Sportback (NACTOY Car of the Year semi-finalist)

But what does the future hold for aluminum in the automotive industry?

While the metal is lighter than steel, it is more expensive. According to MetalMiner IndX data, LME primary cash aluminum is up 19.6% since this time last year, up to $2,235/metric ton as of Jan. 24.

Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook

If aluminum price increases continue to rise — and outpace those of steel — it bears monitoring whether the allure of aluminum wears off in any way.

This morning in metals news, Ford Motor Co. is expected to say rising metals costs are cutting into its profits, Japanese crude steel output is down and South Korea’s largest steelmaker is reaping the benefits of high steel prices.

Lower your aluminum spend – Take a free trial of MetalMiner’s Monthly Outlook!

Rising Metals Prices Eating Into Profits: Ford

Ford is scheduled to announce its 2017 fourth-quarter earnings this afternoon — and according to Reuters, the automaker is expected to bemoan the rising costs of metals.

Aluminum prices have risen 20% in the last year, according to the report, which particularly affects Ford, as it uses more aluminum than its rivals.

Ford’s earnings estimate released last week indicated the automaker could lose out on $1.6 billion in 2018 due to high metals costs and currency volatility, according to the report.

Japan’s Crude Steel Output Falls

Japanese crude steel output in 2017 fell for the third straight year, according to The Japan News.

The Japan Iron and Steel Federation announced the figures Tuesday, noting that output in 2017 dropped 0.1% last year.

Japan produced 104.66 million tons last year, its lowest total since 2009, according to the report.

Posco Enjoys Steel Price Rise

Speaking of steel, South Korean steelmaker Posco, the largest steelmaker in the country, is benefiting from rising steel prices, according to the Nikkei Asian Review.

The firm posted its best earnings in five years last year, according to the report.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Due to Chinese capacity cuts on the basis of environmental concerns, the company will continue to enjoy high prices in that market through the second quarter of this year, according to analysts cited in the report.

This morning in metals news, the metals supply situation is complicated, Russian steel producer NLMK‘s output rose 3% last year and copper dropped the most it had in almost six weeks.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

What is the Supply Situation?

According to Reuters, stocks of metals in LME industrial warehouses fell by 40% last year, meaning tighter supply and a subsequent rise in prices — at least, that’s the conventional wisdom.

But when it comes to the global picture, it isn’t that simple. According to Reuters, some smaller exchanges aren’t experiencing such drops in inventory, which balances out the supply picture.

For example, warehouses monitored by the Shanghai Futures Exchange (ShFE) went up, as did CME Group warehouse inventories in the U.S.

As such, according to the report, only lead and zinc really fit the bill vis-a-vis being tagged with the tight supply label.

NLMK Sees Output Rise in 2017

The Russian steel producer said its 2017 production rose 3% last year, according to Reuters.

NLMK’s crude steel output amounted to 17.1 million tons last year.

Copper Posts Biggest Drop Since Early December

Is the rally coming to an end for copper? It’s a little early to make that declaration, but according to Bloomberg the metal posted its biggest drop Tuesday since Dec. 5.

Copper dropped 1.8% on Tuesday to $7,078 per ton, according to the report.

The metal, often dubbed “Dr. Copper” for its ability to serve as an indicator of overall economic health, had a strong December. However, 2018 hasn’t been as kind.

Free Download: The January 2018 MMI Report

LME copper closed Dec. 1 at $6,733 and closed Dec. 29 at $7,156.50 (a rise of 6.3%). In the new year, however, the metal has tracked back, hitting $7,022 as of Wednesday morning, according to MetalMiner IndX data.

TTstudio/Adobe Stock

This morning in metals news, Rio Tinto made a copper discovery at its Grasberg mine for the first time since 2014, automakers urge Trump not to withdraw from the North American Free Trade Agreement (NAFTA) and copper hits a 3 1/2-week low.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Rio Makes Copper Find at Grasberg

Rio Tinto made a copper discovery at its Grasberg mine, marking the first discovery of copper at the location since 2014, Bloomberg reported.

The discovery comes as Rio is considering leaving its Indonesian mine operation, according to the report. Rio’s total mined copper output declined by 9% last year, according to the report.

Don’t Pull Out of NAFTA: Automakers

As renegotiation talks focusing on NAFTA continue, automakers once again urged the president not to pull out of the trilateral trade deal.

According to Reuters, automakers urged the president not to terminate the deal and were hopeful a renegotiated deal can be reached among the member nations (the U.S., Canada and Mexico).

Trump has threatened to withdraw from the deal, inked in 1994, as manufacturing and labor group in the U.S. have argued NAFTA has seen jobs leave the country for Mexico. Meanwhile, other groups, like automakers, have indicated a desire to see the deal modernized for the 21st century, as opposed to spiking the deal entirely.

Regardless, pulling out of NAFTA would have a significant impact on a wide range of interconnected supply chains across North America.

The parties involved in the renegotiation hoped to reach a deal by the end of 2017, but that schedule proved to be overly ambitious. Now, negotiators will look to hammer something out during what is an election year in all three countries.

Copper, Nickel Slide

Copper fell to a 3 1/2-week low and nickel dropped by more than 5% on Tuesday, according to Reuters.

After zinc closed out 2017 on a hot streak, it has come back down to earth a bit after not unexpected profit-taking, according to the report.

Wondering how your stainless steel prices compare to the market? Benchmark with MetalMiner

Copper, too, also fell as the U.S. dollar steadied (the two are inversely correlated), hitting an index value of 90.61 as of 12:15 p.m. EST Tuesday.

gui yong nian/Adobe Stock

This morning in metals news, two new vehicles made mostly with steel represent a victory for the steel industry, iron ore prices are down and the U.S. International Trade Commission (ITC) voted to continue its investigation into common alloy aluminum sheet from China.

Wondering how your stainless steel prices compare to the market? Benchmark with MetalMiner

New Ram Pickup, Chevy Silverado Made with Steel

As the steel industry battles to remain the dominant material in automotive construction, the news of two new models constitutes a win for the industry.

Fiat Chrysler‘s new Ram pickup and General Motors‘ new Chevrolet Silverado truck are made mostly with steel, Reuters reported. The announcements represent a big win for steel, which is seeing increasing competition from aluminum within the automotive industry.

As Reuters reported, in late 2014 Ford launched the all-aluminum body F-150. While the versatile metal offered improved fuel economy, it comes at a premium to steel. The interplay between steel and aluminum vis-a-vis automobile construction is something that will need to continue to be monitored going forward.

Iron Ore Prices Drop

As Chinese rebar steel futures fell, so too did prices of iron ore in the face of flagging demand, Reuters reported.

Iron ore on the Dalian Commodity Exchange dropped 2.3% to 535 yuan per ton, according to the report.

ITC Continues Aluminum Sheet Investigation

The U.S. ITC announced Friday that it voted to continue its investigation of common alloy aluminum sheet from China.

“The United States International Trade Commission (USITC) today determined that there is a reasonable indication that a U.S. industry is materially injured by reason of imports of common alloy aluminum sheet from China that are allegedly subsidized and sold in the United States at less than fair value,” the ITC release covering the announcement states.

Lower your aluminum spend – Take a free trial of MetalMiner’s Monthly Outlook!

Now, a preliminary countervailing duty determination is due Feb. 1 from the Department of Commerce.

This morning in metals, a major player in domestic steel announced when its full-year earnings call will drop, China looks to be giving used cars some love, and Australia’s government appears a bit bearish on iron ore in the next couple years.

Two-Month Trial: Metal Buying Outlook

Iron Ore Price Forecast for 2018-2019

Australia’s Department of Industry, Innovation and Science noted in recent commodities report that it expects iron ore prices to drop 20% in 2018 over this past year’s level, and continue that trend into 2019, according to Reuters.

A demand slowdown in China is much to blame, according to the department’s resource and energy analyst David Thurtell, as quoted by the news agency.

China Pivots to Used Cars

Speaking of demand slowdowns, China’s consumers may also be to blame for current — and future — automotive metals demand in Asia (and globally).

Read more