Steel Markets
U.S. Auto Sales Grow but SAAR Dips Below 17 Million
Written by Sandy Williams
April 2, 2016
March U.S. automotive sales exceeded expectations on a year over year basis with total raw volume sales growing 3 percent due to higher volume of premium brands.
The seasonally adjusted annual rate of 16.5 million units, however, fell below 17 million for the first time since April 2015. WardsAuto expects a major spike in SAAR in April because of extra selling days during the month.
“In fact, because April ends on a weekend, volume for the month will include deliveries through May 2, thereby giving it five weekends of dealer traffic vs. the typical four,” said Wards Auto. “Because it is a rarity for two consecutive months to have more selling days than normal, making it difficult to develop accurate factors to calculate the SAARs, averaging the totals for both March and April will be the best way to judge the period’s results.”
Wards Auto is currently forecasting a SAAR of 17.8 million units for 2016.
Toyota sales slowed in March, slipping 2.5 percent in unit sales. Bill Fay, Group Vice President and General Manager of the Toyota Division, commented:
“While 2016 has had a healthy start and while January and February are keeping pace from 2015, March has shown some softening, due to consumers being more cautious about spending – but they are still spending. The economy still feels stable, and fundamentals for consumer spending remain strong. The unemployment rate is expected to continue to decline, and, given the state of the economy, the Fed chose not to raise rates again in the first quarter. So we remain optimistic about the industry in 2016, as we prepare to head into the spring and summer selling season.”
A strong automotive market is critical to the success of the flat rolled steel industry which has been riding on the back of automotive ever since the Great Recession. Most forecasters have automotive remaining at the 17 million level through 2016 and into 2017. But, automotive is a cyclical business and we need to watch production and inventory numbers carefully.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets
CRU: Steel prices fall amid global demand weakness
The forceful headwinds bearing down on steel markets across the globe have created demand challenges and sent prices southward. The US, however, challenged the global trend.
Hot-rolled price hikes garner mixed reactions from the market
Several steel market sources say they were blindsided when mills increased spot prices for hot-rolled coils this week.
Steel market participants mull the impact of US/Mexico S232 negotiations
Steel market participants learned that negotiations between the US and Mexico include discussions about Section 232 tariffs on steel and aluminum despite President Trump’s June 3 proclamation increasing the tariffs from 25% to 50% for all steel and aluminum imports—except for those from the UK.
ArcelorMittal plans wire-drawing closure in Hamilton, shifts production to Montreal
ArcelorMittal’s (AM) Hamilton location to be shuttered, wire production shifting to Montreal.
Tariffs, ample domestic supply cause importers to shift or cancel HR import orders
Subdued demand is causing importers to cancel hot-rolled (HR) coil orders and renegotiate the terms of shipments currently enroute to the US, importers say. An executive for a large overseas mill said customers might find it difficult to justify making imports buys after US President Donald Trump doubled the 25% Section 232 tariff on imported steel […]