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Due to an ongoing semiconductor shortage, North American vehicle production will drop by 348,000 units in 2022, according to forecasting firm AutoForecast Solutions. This is an increase of 71,000 from their prior estimate of 277,000 units. Based on Argus’s calculations, approximately 258,000 short tons of flat-rolled steel demand will be lost due to the automotive production shortfall. According to the American Iron and Steel Institute's (AISI) Automotive Program, the average North American vehicle contains 1,980lbs of steel, of which approximately 1,480lbs are flat-rolled products and 486lbs of aluminum. |
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This year so far has been an ugly year for steel prices, as prompt month July CME HRC futures have dropped nearly 40% since early April, with last trade at $920/st (7:00 AM CST). Steel producers that are concerned about decreasing prices might consider hedges that provide downside protection, such as selling swaps or buying put options, both of which would establish a minimum price. Such positions are basic for producer hedging; however, they can result in opportunity costs or cash costs if metal prices increase. Please contact AEGIS for specific strategies that fit your operations. (7/20/2022) |
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. |
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Price Indications |
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Today's Charts |
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AEGIS Insights |
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07/13/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 07/07/2022: Have Copper Prices Begun to Find a Bottom? 06/23/2022: What is Green Steel Anyways? |
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| Important Headlines | ||
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7/19/2022: Two giant miners warn of tougher times as world demand wavers 7/18/2022: China scrambles to defuse alarm over mortgage boycotts and banks runs 7/18/2022: China raises loan-support efforts for developers amid mortgage boycott 7/18/2022: Estimated NorthAm auto losses rise 7/18/2022: Commodity Tracker: 5 charts to watch this week 7/17/2022: Mongolia says Russia-China gas pipeline will break ground in 2024 7/17/2022: CMOC's Congo mine suspends copper and cobalt exports
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Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as “edge,” “advantage,” “opportunity,” “believe” or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.
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