Metal Markets Foresee Auto Recovery of Demand as 2021 Progresses
Global economies are slowly recovering from the effects of the coronavirus pandemic, and with economies reopening comes expectations that automotive production will also return to normal. However, for this to happen, the semiconductor shortage that has kept most automotive plants from resuming operations will have to end.
This may happen soon, as market participants expect the demand of vehicles as well as their production to increase significantly in the second half of this year. In the United States, one buyer expects that demand will impact the aluminum sector.
A large U.S. consumer has noted that it expects production of vehicles will recover in the same period but notes that the supply chain issue with chip shortages may not improve until 2022. The consumer adds that the demand for aluminum will most probably recover in this year’s second half as auto manufacturers will prioritize higher-margin vehicle production, which are more aluminum intensive.
Participants in the steel market agree but also observe that automakers have already improved production; they expect that increase to continue. This comes at a time when steel continues to hit new price highs.
One distributor that serves the Great Lakes region states that both Ford and GM have improved in production, with another producer admitting that various steelmakers had received letters from auto manufacturers asking them to prepare their inventories for a growth in demand in the coming months.
Over in Asia, the chip shortage has had little influence on the demand for automotive steel. A report released by Toyota shows that the company produced more than 761, 000 units globally in April, which is twice the number of units produced in the same period in 2020. Additionally, automotive production grew by almost 23% to more than 267,000 units in April and tripled to more than 490,000 units in countries outside Japan.
Honda, another major producer of cars in Japan, also recorded higher production volumes in the same month. Overall, in comparison with last year’s figures, automotive volumes of production in Asia doubled. Additionally, Mitsubishi and Nissan also recorded a higher number of units produced, year-on-year.
Ford, General Motors and Stellantis, which were the most affected by the semiconductor shortage, expect that automotive production will improve in this year’s third quarter, with Ford noting that semiconductor supply from Renesas may resume in July. On the other hand, General Motors plans to continue building cars without modules and increase plant downtime.
All this added demand for metals bodes well for sector players such as Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) as they are assured of a market looking forward.
NOTE TO INVESTORS: The latest news and updates relating to Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are available in the company’s newsroom at https://ibn.fm/EXN
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
Global economies are slowly recovering from the effects of the coronavirus pandemic, and with economies reopening comes expectations that automotive production will also return to normal. However, for this to happen, the semiconductor shortage that has kept most automotive plants from resuming operations will have to end.
This may happen soon, as market participants expect the demand of vehicles as well as their production to increase significantly in the second half of this year. In the United States, one buyer expects that demand will impact the aluminum sector.
A large U.S. consumer has noted that it expects production of vehicles will recover in the same period but notes that the supply chain issue with chip shortages may not improve until 2022. The consumer adds that the demand for aluminum will most probably recover in this year’s second half as auto manufacturers will prioritize higher-margin vehicle production, which are more aluminum intensive.
Participants in the steel market agree but also observe that automakers have already improved production; they expect that increase to continue. This comes at a time when steel continues to hit new price highs.
One distributor that serves the Great Lakes region states that both Ford and GM have improved in production, with another producer admitting that various steelmakers had received letters from auto manufacturers asking them to prepare their inventories for a growth in demand in the coming months.
Over in Asia, the chip shortage has had little influence on the demand for automotive steel. A report released by Toyota shows that the company produced more than 761, 000 units globally in April, which is twice the number of units produced in the same period in 2020. Additionally, automotive production grew by almost 23% to more than 267,000 units in April and tripled to more than 490,000 units in countries outside Japan.
Honda, another major producer of cars in Japan, also recorded higher production volumes in the same month. Overall, in comparison with last year’s figures, automotive volumes of production in Asia doubled. Additionally, Mitsubishi and Nissan also recorded a higher number of units produced, year-on-year.
Ford, General Motors and Stellantis, which were the most affected by the semiconductor shortage, expect that automotive production will improve in this year’s third quarter, with Ford noting that semiconductor supply from Renesas may resume in July. On the other hand, General Motors plans to continue building cars without modules and increase plant downtime.
All this added demand for metals bodes well for sector players such as Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) as they are assured of a market looking forward.
NOTE TO INVESTORS: The latest news and updates relating to Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are available in the company’s newsroom at https://ibn.fm/EXN
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
