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Tag Archives: autos

Commodity Tracker: 4 charts to watch this week

A hike in rhodium prices, South Korean nuclear availability and European power prices are all in the mix in this week’s selection of trends to watch in energy and raw materials markets. 1. Will supply-constrained rhodium see more upside after all-time high?   What’s happening? After a period of lower prices in the first and second quarter of 2020 as lockdowns and low automotive production weighed on demand, the rhodium market once again picked up the bullish streak seen early...

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Around the tracks: World’s auto markets sink in H1

As the coronavirus crisis plays out, Clement Choo assesses the recovery in the world’s key auto production hubs, with China the exception to an otherwise weak environment. Carmakers across the globe saw initial signs of improvement in the second quarter, but the auto industry remains concerned about the prospects for a long term recovery as COVID-19 cases have continued to flare up. As a result, several countries could find themselves implementing another lockdown, which would delay...

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European steel industry looks for way forward amid coronavirus demand blow

The coronavirus has dealt the European steel sector a heavy blow. Coming on the heels of Brexit and global trade tensions, the crisis has also highlighted the region’s overcapacity problem, raising the possibility of previous merger and divestment plans being revived. As much as 18.9 million mt of steelmaking capacity was taken offline in Europe during the market slump caused by the pandemic – more than in any other region. This comes on top of 2019’s marginal contraction in production. By...

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Of cars and cans: US aluminum and the pandemic

The coronavirus pandemic has obliterated global metals demand as one of the main end uses, automotive applications, has seen major disruptions to the supply chain. The US metals market, in particular, saw the removal of an estimated 33,000 vehicles per day from production as all major auto producers across the country halted operations in response to government mandates and concerns over the welfare of workers. Because the transportation sector is the largest end user of aluminum, accounting...

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Iron ore prices boom on supply shortages, record Chinese steel output

Over the past few challenging months, iron ore has been the standout commodity, returning to prices of $100/metric ton (delivered to China) in late May for the first time since August 2019. Demand for the key steelmaking raw material has been extremely resilient this year, supported by strong crude steel production in China, supply shortages and lower iron ore stocks at Chinese ports. China produced a record 92.27 million mt of crude steel in May, up 4.2% on the year, and June has...

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COVID-19 speeds up global manufacturing, steel production shift

Global manufacturing was in the doldrums for much of last year, pulled down by weak demand in key consumer-driven segments amid ongoing trade tensions and slower economic growth. Countries such as Japan, South Korea and Germany that rely on exports found it tougher to sell to overseas customers, while the downturn in auto sales in the United States exemplified what was happening to the sector internationally. When the coronavirus outbreak hit in early 2020, it was akin to kicking...

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Oil is down but not out: signs of recovery as lockdowns ease

Giant pillars holding up oil markets have suffered cracks since the COVID-19 pandemic sent shockwaves through the global economy. Demand has collapsed and prices have tumbled, but there are reasons to believe the worst of these tremors have passed. Crude has survived the seismic shock waves and can fuel the recovery. Dated Brent – the physical benchmark used to price two-thirds of the world’s oil – has more than doubled in value since hitting a 21-year low in April. The measure of...

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Around the tracks: Virus topples global autos and weakens steel coil prices

As some national lockdowns begin to ease, Clement Choo assesses latest indicators of the health of the global auto industry, and the performance of a key input for the sector, steel coil. Vehicle markets saw their first quarter performance take a beating, with existing weak demand pummeled by the coronavirus pandemic as countries around the world reacted by going into lockdown. GM suspended its 2020 profit outlook amid the uncertainty, after it added $16 billion to its cash reserves by...

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COVID-19’s sudden bite could have lasting impact on US steel market

I stepped on a snake the other day. It was near the woods at the back of our property, while I was gathering logs cut from a fallen tree. I’m sure the snake was frightened too, and he might be recounting now his close encounter with me to all of his reptile buddies. That didn’t prevent me, however, from screaming like a maniac and dashing faster from the danger than I’ve probably moved in a long time. While our interaction lasted less than five seconds before he slithered back into the...

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Coronavirus could change travel behavior forever, putting 3 million b/d oil demand at risk

Global air, road and rail travel have been massively reduced as governments attempt to limit the spread of coronavirus, taking a heavy toll on short-term oil demand. Clearly, the mandated restrictions will lift when the pandemic eases and low oil prices will further aid in stimulating oil demand. However, it is possible that consumer behavior could be altered structurally, with impacts that persist even once the pandemic has ended. For oil demand, the two sectors most at risk from a...

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