CRU Aluminum: Weak Demand Signals Set Summer Tone

North American auto assemblies fell 2.2% from August to 1.314 million units in September, as lower commercial vehicle production outweighed nearly unchanged personal vehicle output, according to GlobalData. After steady gains through Q2, automotive production has been inconsistent, continuing a seesaw pattern. Still, assemblies remain muted and well below pre-pandemic levels. Total production was 4% below September 2025. Still, last month’s production total was 2.7% above 2026’s monthly average of 1.28 million units.

SMU’s Steel Demand Index rose three points to 64.5 in mid-October, from 61.5 in early October. While it remains below a five-year high reached in mid-September, it is up 27 points from a reading of 37.5 a year ago. Results continue to signal a broad-based improvement in flat-rolled steel demand amid constrained domestic supply. The index has been in expansion territory since late November 2025.

SMU’s Mill Order Index (MOI) surged in September, up for a fifth consecutive month and setting a record high. The increase came as service center on-order volumes and new mill order entries reached record highs—overtaking any prior high-water mark—including the post-pandemic snapback in demand, according to SMU’s latest service center inventory data. The MOI now stands at 162.7, up nearly 18% from 138.3 in August. The MOI was more than 35% above the average year-to-date (YTD) reading of 120.3, and up more than 100% year-on-year (y/y). Results suggest inventories remain uncomfortably lean as service centers try to restock in a market where spot tons are scarce, and contract tons are delayed. September intake surged by more than 21% month over month (m/m), exceeding outbound shipments by 15%. The result: service center inventories remained down more than 14% YTD vs. the same period a year earlier, even as shipments were ~3% higher.