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Tag Archives: autos

Reading the tea leaves: China and commodities in 2020

China’s voracious demand for commodities and energy continued unabated in 2019 despite a slowing economy and uncertain external environment. But what will be on the agenda in 2020 as the economy, environment and energy security come into greater focus? Here are are some key trends to watch over the coming year and what they mean for commodities. Slower growth The recent signing of the first phase of a trade deal between China and the US may herald a truce between the world’s two largest...

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Insight from Shanghai: NEV regime takes off training wheels as government slashes subsidies

China has put leadership in the development of New Energy Vehicles (NEVs) – battery electric, plug in hybrid and fuel cell vehicles – at the heart of its industrial policy. The country is the world’s largest market for electric vehicles, with 2.3 million battery electric and plug in hybrid vehicles on the road in 2018, accounting for 45% of the global stock. In a draft of the latest development plan for the sector released early December, the government envisages that NEVs will account for a...

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Tariffs and tribulations: recasting US metals industries

“Trade wars are good, and easy to win,” President Donald Trump tweeted in March 2018 after imposing sweeping tariffs on US imports of steel and aluminum. The application of a little-known trade remedy sent shockwaves across the metal markets and upended well-established supply chains. More than two years have passed since the Section 232 investigation was carried out by the US Department of Commerce, under provisions in a 1962 trade act, and 20 months since the tariffs were imposed on the...

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Around the tracks: Auto sales, coil prices unlikely to gain traction before 2020

This new monthly feature looks at key auto markets around the globe, including output and sales trends and the impact on relevant steel and metals prices. The auto sector accounts for around 25% of steel consumption in the US and Germany, 7% in China and 12% in India. The sector will play a growing role in metals demand in emerging nations. Global manufacturing has undergone a severe downturn this year, due in large part to US-China trade tensions undermining investor confidence. Consumers...

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China Macro and Metals: Steel exporters target China amid warmer economic signals

In a new monthly post, S&P Global Platts analyzes China’s key economic indicators, and what they mean for the metals sector. Chinese commodity prices softened over September and into the first half of October, while economic data was mixed over the same period. But compared to other global markets, China is doing pretty well. This was evidenced by countries including South Korea, Russia and India all targeting China with steel due to a lack of buyers elsewhere. Chinese domestic prices...

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Fed’s Mid-Course Correction to be Challenged while ECB Resumes Bond Purchases

The week ahead will help shape the investment climate for the remainder of the year.  The highlights include three central bank meetings (Federal Reserve, Bank of Japan, and the Bank of Canada).  Among the high-frequency data, the US and the eurozone report the first estimates of Q3 GDP, and the US October jobs data and auto sales will be released.  Investors will also get the preliminary Oct CPI for EMU. A few hours before the FOMC meeting concludes on October 30, the US will...

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Sluggish global steel demand pressures iron ore, met coal prices

Global steel mill margins have shrunk in 2019, in turn pushing down iron ore and coke consumption and prices for coking coal. In 2018 Platts benchmark US hot rolled coil (HRC) spot prices exceeded $1000/mt delivered Midwest for the first time since 2008, and the sustained run in steel pricing and demand since 2016 delivered high profits for steel producers.   High global steel prices last year have quickly been forgotten, as offtake from steel buyers in the US and Europe reduced into...

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China Questions US Sincerity

Overview:  Since the presidential tweets on May 3, the US had the initiative in the negotiations with China, but today, China has pushed back.  It is cool to the idea promoted by the US that trade talks will resume shortly.  Now it may take the Trump-Xi meeting at the end of next month to restart talks.   This, coupled with US sanctions on Huawei banning imports from it and sales to it, threatens to disrupt business and this took a toll on Chinese, Taiwanese and Korean shares.  The...

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Kass: The Bullish Bias Resounds

This morning the futures (S&P and Nasdaq) are, as is the custom, higher. The markets continue to ignore a number of cautionary signposts/macroeconomic events/concerns and are benefiting from the float shrink of 5-7 years of corporate share buybacks, the dirty water of liquidity (contributed by the world’s central bankers), the heightened role of price momentum based and other (risk parity) quant strategies and the rising popularity of passive, index funds. Adding significantly to the...

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Kass: Fallen Angels & Lessons Learned

“Hello I Mr. Ed. A horse is a horse, of course, of course, And no one can talk to a horse of course That is, of course, unless the horse is the famous Mr. Ed. Go right to the source and ask the horse He’ll give you the answer that you’ll endorse. He’s always on a steady course. Talk to Mr. Ed.”  – Theme Song to Mr. Ed The rapid decline in Tesla’s (TSLA) shares over the last month and the continued fall of two prior market darlings, Intel (INTC) and Micron (MU) , should remind us of the...

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