The Automotive Monthly Metals Index (MMI) picked up one point this month, rising for an MMI value of 93.
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U.S. Auto Sales
As noted in previous reports, General Motors last year announced a switch from monthly sales reports to quarterly reports. Fellow Big Three automaker Ford Motor Co. has followed suit, recently announcing it would also move to a quarterly reporting schedule.
“We knew that a lot of our competitors would watch to see what our experience would be and if we’d stick to our guns,” GM spokesman Jim Cain told the Detroit Free Press. “We always expected they’d follow.”
Meanwhile, most automakers continue to report on a monthly basis. Fiat Chrysler reported February sales fell 2% year over year, breaking an 11-month streak of year-over-year gains.
“The overall industry is starting off slower due in part to weather, the U.S. government shutdown and concern over tax refunds,” U.S. Head of Sales Reid Bigland said. “We still see a strong, stable economy and anticipate any lost winter sales will be made up in the spring. For us, the Ram brand was the standout in February, and Jeep Cherokee set a February record as well.”
Honda saw its total sales dip 0.4% year over year in February. However, Honda’s Acura brand posted a strong February, with Acura sales increasing 11.3% year over year. Sales of Acura trucks increased 23.9% year over year.
Nissan’s U.S. sales dropped 12% year over year. Nissan’s ousted former CEO Carlos Ghosn was granted bail by a Tokyo court, NPR reported, as he awaits trial on corruption charges.
Subaru reported a 3.9% year-over-year sales increase, with its Forester performing well in the year to date (up 17.6% compared with January-February 2018 sales). However, earlier this month Subaru recalled 1.3 million vehicles due to brake light issues, impacting certain Forester, Impreza and Crosstrek vehicles.
Section 232 Auto Report Moves to Trump
Last month, Secretary of Commerce Wilbur Ross submitted a report to President Donald Trump related to the Trump administration’s Section 232 investigation on imports of automobiles and automotive parts.
Pursuant to Section 232 of the Trade Expansion Act of 1962, once an investigation begins the commerce secretary has 270 days by which to provide the president with a report including recommendations. This particular investigation began May 23, 2018, setting the deadline on Feb. 17.
However, some industry groups have complained because the report was not made available to the public.
“It is critical that our industry have the opportunity to review the recommendations and advise the White House on how proposed tariffs, if they are recommended, will put jobs at risk, impact consumers, and trigger a reduction in U.S. investments that could set us back decades,” the Motor and Equipment Manufacturers Association said in a prepared statement. “Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs. MEMA calls for the immediate and full release of the report.”
Meanwhile, the European Automobile Manufacturers’ Association (ACEA) issued a statement, arguing European automobiles do not pose a national security threat to the United States.
“Imports of cars and auto parts from the EU clearly do not pose a national security risk to the United States,” ACEA Secretary General Erik Jonnaert said. “Any trade restrictive measures in our sector will have a serious negative impact, not only on EU manufacturers but also on US manufacturers.”
Investments and Relocation
General Motors made waves late last year when it announced plans to close several of its North American plants and cut 15% of its workforce.
GM is far from the only automaker cutting costs and shuffling production, as MetalMiner’s Stuart Burns explained last month. Ford, Jaguar Land Rover, Nissan and Honda, among others, have either cut jobs or moved production.
“The U.S. market could be due for a severe shakeup if President Donald Trump’s threat to slap import tariffs on foreign cars comes into effect,” Burns explained.
“UBS Bank reckons that the worst case — tariffs of 25% — would see the American market shrink by 12% next year.”
As for investment, while GM previously announced the shuttering of five North American plants in 2019, it recently announced new investment in other plants. The automaker plans to invest a total of $56 million in two Michigan plants, located in Romulus and Lansing.
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Actual Metal Prices and Trends
U.S. HDG steel rose 1.8% month over month to $896/st as of March 1. U.S. platinum bars rose 6.0% to $869/ounce. U.S. palladium bars rose 14.9% to $1,522/ounce.
U.S. shredded scrap steel rose 5.7% to $332/st.
Chinese primary lead rose 0.8% to $2,615.72/mt. LME copper rose 5.3% to $6,494/mt.
Korean aluminum coil fell 3.5% to $3.31/kilogram.