Steel Markets

Auto Sales Slip in November; Still on Pace for 17 million
Written by Sandy Williams
December 4, 2018
Dropping sedans from its lineup proved to be a smart move for Fiat Chrysler. Sales in November jumped 17 percent as sales of the Ram pickup surged 42 percent and sales of SUV models gained 20 percent or more.
“The market continues to abandon cars, with no end in sight,” said Karl Brauer, executive publisher of Autotrader and Kelley Blue Book. “Automakers have slowed or stopped production, so inventory is down, and buyers are mostly looking at trucks and SUVs.”
General Motors announced last week that it will idle production at five of its North American plants and focus in the future on trucks, SUVs and electric vehicles. GM no longer provides monthly sales figures but Edmunds estimates sales likely fell about 2.5 percent.
Ford sales fell seven percent in November, but the bulk of the decline was in car sales (-19.5 percent) and fleet sales (-7.1 percent). Sales of F-Series trucks have been over 70,000 units for nine straight months.
Subaru was another winner last month with its best-ever November sales, up 9.8 percent, mostly due to SUV sales.
Rising interest rates on vehicle loans were blamed for slowing sales along with consumer rejection of passenger cars.
“Car buyers got a bit of relief this month thanks to Black Friday deals, but an average interest rate above 6 percent is still a tough pill to swallow, especially for shoppers who might be coming back to the market after a number of years,” said Edmunds analyst Jeremy Acevedo. “Shoppers who purchased a car in November five years ago could feasibly be facing a 47 percent increase in their interest rate this November.”
The U.S. auto industry is still projected to top the 17 million vehicle mark for 2018. Mark LaNeve, Ford Vice President of U.S. Marketing, Sales and Service, expects the industry total to exceed 17.5 million for the year.
“The industry in November had a really steady consistent performance,” said LaNeve during the Ford sales conference call. “It would appear total sales, including medium and heavy trucks, were off about 3 percent or so with what we believe was almost 1.4 million vehicles sold. Year-to-date has been consistent. The industry is running about 17.5 million to 17.6 million vehicles.”

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets

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 […]

CRU Insight: A 50% S232 tariff will raise US steel prices and shift trade flows
This CRU Insight examines how the increase in Section 232 tariffs on steel to challenging levels will lead to significatively higher prices for end consumers in the US market.

Steel market shakes tariffs off amid weak demand
Service centers and distributors contend that weak demand is to blame for the flattening of domestic steel spot prices, as reflected in Nucor Steel’s weekly Consumer Spot Price (CSP) notice. On Monday, the Charlotte, North Carolina-headquartered steel producer left prices unchanged from the previous week. Nucor has maintained prices of plate produced in Brandenburg since March 28.