Published on : Sep 04, 2015
In September, the automotive MMI registered a value of 73, a downfall of 3.9% from 76 in August. In China, there has been a downfall in auto sales in the recent past. Weak prices for majority of the metals that constitute the index, flourish irrespective of strong end user sales. As compared to July 2014, auto sales in July 2015 fell by 7.10%. This is considered to be the biggest fall since February 2013. Such a downfall of a large economy is resulting into fall in prices of auto metals, prices of oil and some other commodities.
Rio Tinto PLC, Vale SA, Fortescue Metals Group Limited, BHP Billiton, and some other iron ore producers have ramped up their production irrespective of oversupply of steel and iron ore. Market players intend to explore iron ore in the cities of Australia despite low growth predictions from China as well as weaker process of iron ore. This is considered to be a normal behavior from some of the major minors such as Rio, Vale, and BHP. These minors are expected to make profits by extracting volumes from their mines at reasonably low prices. Iron ore investments are expected to arrive from many non-traditional miners as well.
Essar Steel, one of India’s leading company, is currently drawing an investment of US$1.9 billion in the steel-making ingredient of all places in Minnesota. It is difficult to visualize that how such an investment would generate long-term sense for Essar Steel, that too without a turnaround in steel and oil prices. High strength auto steel alloys are considered to be one of the top performers in the steel products category, in today’s market. It is further difficult to imagine a turnaround in their prices without any possibility of strong sales in Europe, the United States, and other emerging market.