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
GrafTech’s Q2 loss widens in ‘challenging’ business environment
GrafTech cited a “challenging” part of the business cycle as its net loss widened in the second quarter.
CRU: Poor steel margins continue to push down raw material prices
Both iron ore and coking coal prices fell this week because of resistance from buyers. Iron ore prices have continued to fall throughout the past week, following sharp declines in steel prices in China, given no new policy announcement from the ‘Third Plenum’ meeting.
Op-Ed: The myth of the Mexican steel surge
We have heard ominous warnings about a flood of Mexican steel threatening the US market. It's the kind of rhetoric that gets thrown around often with little regard for the facts. The reality is that the Mexican steel surge is simply not happening, and the US steel industry has consistently maintained a significant trade surplus in finished products with Mexico. In 2023 alone, this surplus exceeded $3 billion.
CRU: Demand weakness continues to weigh on global sheet markets
Demand has remained persistently weak across the globe for sheet steel, weighing on prices. US HR coil prices fell the furthest this week as high-volume, low-priced deals were transacted as mills looked to fill order books and competed with one another amid relative demand weakness. Meanwhile, European prices were also down due to low demand […]
Influx of coated products fuels recent import surge
Steel imports fell back in May from April’s recent high but remained elevated compared to the levels seen over the past year. A deeper dive into the data confirms what SMU has been hearing from sources: Coated sheet is driving the recent rise in overall import levels.