Adobe Stock Here’s a quick rundown of news and thoughts from particular commodity sectors, including the House passing the Biden administration's infrastructure bill, down auto sales in October, softening steel prices and more.
MetalMiner, a sister site of ours, scours the landscape for what matters. This week:
US auto sales slump in October
It's a bit of a broken record at this point, but U.S. auto sales continue to slump in the face of semiconductor shortages and low inventory.
Ford reported its October sales in the U.S. fell 4.0% year over year. Meanwhile, Honda sales fell by 23.5%, while Hyundai sales dipped by 1%.
According to a J.D. Power and LMC Automotive forecast, U.S. new-vehicle retail sales were set to fall by 17.4% in October.
In China, auto sales reached 2.3 million vehicles in September, the China Association of Automobile Manufacturers reported yesterday. The September total marked a year-over-year decline of 9.4%. However, sales jumped by 12.8% month over month.
Copper prices rise
MetalMiner's Nichole Bastin this week delved into the copper market, where prices remain elevated but appear to be consolidating.
"From a technical perspective, as prices appear to be trading sideways at a historical resistance level," Bastin wrote. "As such, buyers should watch markets in the coming months for the appearance of a clearer market trend."
Copper prices on both the LME and SHFE picked up in October, with LME three-month copper rising by over 4%.
Steel prices slow
On the other hand, the steel price rally has finally lost some steam of late, ending a practically uninterrupted ascent since last summer.
Prices have softened amid weaker automotive demand and imminent new supply coming online, Bastin explained.
Meanwhile, top producer China continues to see its steel output decline. September output fell to a nearly three-year low, reaching 73.75 million metric tons.
Infrastructure bill passes House
Last Friday, Nov. 5, the U.S. House of Representatives voted to pass the $1.2 trillion Infrastructure Investment and Jobs Act.
President Joe Biden will sign the bill during a ceremony scheduled for Monday, Nov. 15.
The bill includes $550 billion in federal funding for infrastructure improvements covering roads, bridges, electric grid, lead pipe replacements, broadband and more. The projects outlined in the bill are likely to be a significant boon for the metals sector, boosting demand for steel, aluminum, copper and other building materials.
According to the American Iron and Steel Institute, every $100 billion in investment could boost steel demand by up to 5 million tons.
Construction spending slips in September
The aforementioned infrastructure bill is likely to benefit construction firms too.
However, U.S. construction spending in September fell by 0.5% month over month, reaching a seasonally adjusted annual rate of $1,573.6 billion.
On the other hand, the Architecture Billings Index, an indicator of nonresidential construction activity, reached 56.6 in September, up from 55.6 in August. (Any index value greater than 50 indicates billings growth.)
Novelis rides momentum of strong aluminum market
Like other metals sector firms, Novelis has benefited from a strong run for aluminum prices.
"One of the U.S.’s largest aluminum manufacturers’ recent income announcement for Q2 2021 underlines just how well the mills have been doing," MetalMiner's Stuart Burns wrote.
"Novelis Inc., a wholly owned subsidiary of India’s Hindalco Industries, reported a net income of $237 million during Q2 as compared to a net loss of $37 million in the prior year period.
"Net income from continuing operations reached $239 million against $144 million in the prior year. Furthermore, second quarter fiscal year 2022 net income jumped 54% to $244 million."
CPI rises 0.9%
The Consumer Price Index for All Urban Consumers rose by 0.9% in October, the US Bureau of Labor Statistics reported.
Furthermore, for the 12-month period ending in October, the CPI jumped by 6.2%. The energy index surged by 4.8% in October alone and by 30% over the 12-month period ending in October.
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