Stellantis cuts 2024 US forecast

: Metals, Petrochemicals
24/10/02

Global automaker Stellantis has cut its 2024 guidance for its US operations.

The company plans to accelerate its inventory drawdown strategy, aiming to reduce dealer inventory to 330,000 units by the end of 2024, from a previous goal of the first quarter of 2025.

So far in the second half of 2024, Stellantis has reduced its US inventories by 40,000 vehicles, Ed Ditmire, head of investor relations, said on 30 September.

To achieve this, Stellantis is reducing North American shipments by more than 200,000 vehicles in the second half of 2024, up from a previous goal of a 100,000-vehicle cut.

Stellanties released the new guidance after it made changes to its production schedules, Ditmire said.

Ditmire added that Chinese competition in Europe is challenging Stellantis' operations, and he estimated that in 2024 over 10pc of electric vehicle (EV) volumes and over 20pc of total vehicle sales in Europe will be from Chinese car companies.

By Rye Druzchetta

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24/10/24

Q&A: Aço Brasil to ask for steel tariff adjustment

Sao Paulo, 24 October (Argus) — Little has changed in the Brazilian steel market after nearly four months of a new tariff system intended to curb the increase of imported products. January-September imports rose by 24pc from the same period a year ago, totaling 4.6mn metric tonnes (t), surpassing what was expected for the full year. The tariffs, hailed by some market participants as missing the mark , was followed by other government measures, such as temporary antidumping measures and antidumping reviews. Industry group Aço Brasil's executive president Marco Polo de Mello Lopes spoke to Argus about the recent measures taken by the Brazilian government. This interview has been translated from Portuguese and edited for clarity. The government's June decision imposed a quota system for importers, along with a tariff increase. How does Aço Brasil see that decision's effects now? We are only four months into the tariff quota system. We have been following everything with a very large magnifying glass and we have some concerns. The tariff quota system has not brought the expected reduction [to import volumes], though it is too early to reach a conclusion. But it brought a change in the trend of what had been happening. At the beginning of the year there was an increase in products in general, but when you check June, July, August and September, you see that imports are decreasing every month. As we had a very high first half, we did not reach what was expected in terms of imports. So far, we see that we have not achieved the reduction objective, but we have achieved the objective of stopping the escalation in relation to these imports. What are Aço Brasil's main concerns with the June policy? It was identified that there was an increase in imports from Egypt and Peru. Egypt has a preferential agreement in relation to what would be a Mercosur-Egypt agreement. We are already evaluating to see what to do specifically regarding the fact that imports are increasing using the trade agreement umbrella. Another area of great concern is the excessive volume of imports that are entering through Manaus [the capital of northern Amazonas state]. It is strange that imports have increased without corresponding [demand] growth [at] the industrial park in Manaus. We continue monitoring to hold new meetings with the government. Brazil's executive management committee of the chamber of foreign trade (Gecex) last week ruled on the tariff increase for some steel products regardless of the import volume, unlike the first decision by the committee earlier this year. What is Aço Brasil's view on that decision? We understand that it is positive — it means there is recognition from the government that there are predatory imports that cause great concern in the sector. It couldn't have been any other way. So [we see it as a] very positive [measure]. The claim that had been made since the beginning was a 25pc [tariff hike]. It was always 25pc because it is what the world has been practicing. If the government approves it, it is within what was expected. What are the next steps for Aço Brasil to improve the situation for Brazilian steelmakers? We will certainly make requests to change the system. We are going to make some kind of movement, but it cannot be done now because there is already an [established] system. Imagine if companies that invested and spent energy and obtained a quota then had the government saying that they no longer have a quota, and could not challenge the decision in the courts. Any changes that may be made must be made following the renewal process of the current system, which would be in June 2025. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Boeing workers reject labor deal, extend strike

24/10/24

Boeing workers reject labor deal, extend strike

Houston, 24 October (Argus) — Striking Boeing employees spurned a tentative labor deal struck between the aircraft maker and union leadership, continuing a costly work stoppage that has halted production of the company's flagship 737 MAX aircraft, along with its 767 and 777 widebody programs. Up to 64pc of factory workers backed by the International Association of Machinists and Aerospace Workers (IAMAW) on Wednesday voted to reject the company's offer, which promised a 35pc general wage increase spread over four years and increased company retirement account contributions. That pay raise, while an improvement over Boeing's first offer of 25pc, ultimately fell short of the 40pc increase sought by workers. Another sticking point centered around the return of employees' pension plans, which was not included in the latest proposal. Boeing had no comment on the vote's outcome. Ending the strike has been the priority of new Boeing chief executive Kelly Ortberg, who assumed the leadership position in August. The five-week work stoppage likely has cost the company $4.5bn based on the latest estimates from Anderson Economic Group and has forced Boeing to delay its goal of increasing 737 MAX build rates to 38/month by the end of the year. The company reported a third quarter loss of $6.2bn on revenues of $17.8bn. The strike's continuance also will exacerbate slowdowns within Boeing's supply chain, which "it turned off in many cases" because of the labor action. The company confirmed it had stopped shipments from certain suppliers, effectively shutting them down and forcing some to announce furloughs — including at its shipset supplier Spirit Aerosystems . Boeing is keeping other suppliers running "hot," either because the company felt some were behind on shipments or because risks were too great to shut them down. That latter group likely includes titanium melters, whom Boeing wants to keep operating at high levels to meet demand requirements for when the aerospace manufacturer increases ramp rates starting in 2025. Still, several market participants within the titanium value chain have expressed concerns to Argus that an extended strike could disrupt future scrap generation in the US, saying there remains enough inventoried material in the pipeline to cover near-term demand. It remains to be seen when negotiations between Boeing and union leadership will resume. The most recent round of talks were mediated by Julie Su, the acting secretary of the US Labor Department. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Outlook unclear at key steel coil event

24/10/24

Outlook unclear at key steel coil event

Hanover, 24 October (Argus) — Sentiment was mixed at a flat-steel focused event in Hannover, Germany, this week. Mills' offers coalesced around €600/t ex-works north Europe for hot-rolled coil, as they tried to reverse recent months' deepening losses. One lower-cost producer told Argus it had been losing €40-50/t on commodity-grade sales. Prices are unsustainably low and have to increase, executives said. Mills were working to underpin the market, as difficult talks with the automotive supply chain over 2025 accords continued. While automakers were pushing for large reductions, aiming to take their contract prices closer to spot, mill and service centre sources said the material that automakers take from domestic producers — especially when considering the service they receive — is far removed from the commodity grades that compete with imports. Automakers often postpone or cancel cargoes in a difficult market — one factor contributing to the limp demand currently confronting steelmakers. Some service centres noted that they do not have the same luxury. Mills pointed to retroactive duties on imports from Egypt, India, Japan and Vietnam as one supportive factor for prices. Definitive duties will probably be backdated to January, Argus understands. A general reduction in imports will also provide a more captive market for domestic mills, and there was widespread expectation that more measures will be implemented by the European Commission. With mills having secured their free carbon emissions allowances by continuing to produce through a period of weak demand, they will probably cut output early in 2025. One large mill will idle a blast furnace in France from April, but this is for maintenance. No other cuts were reported at the event, although German sources note that one German mill will close a hot-rolling line after refurbishing another. Demand remained the key headwind for producers and service centres alike. Service centres reported losing hot-rolled sheet business close to €620/t ex-works in Germany, and there was increasing speculation over the health of some automotive-facing businesses, especially those that have seen volumes dwindle quicker than the market average. Weak demand has enabled buyers with index-linked contracts to secure increased tonnages at more favourable rates for 2025 — either through higher discounts and rebates or lower freight rates. Some mill-owned distributors are at risk of closure, with some in Germany working just one shift a day, sources at the event said. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Range sees 6pc gain in realized 3Q NGL pricing

24/10/23

Range sees 6pc gain in realized 3Q NGL pricing

Houston, 23 October (Argus) — Marcellus gas producer Range Resources received a 6pc higher premium versus Mont Belvieu, Texas, on its natural gas liquids (NGL) production in the third quarter owing to its access to markets in Europe and Asia. The Fort Worth, Texas, based producer received on average $25.96/bl for its NGLs, excluding derivatives, up 6pc versus last year. That exceeded average NGL prices at Mont Belvieu, Texas, by $4.10/bl. "Our ability to market ethane propane and butane into the international markets drove the highest NGL premium in company history, at over $4/bl over the Mont Belvieu index," said chief executive Dennis Degner. Range reported its natural gas liquids (NGL) production rose 5pc year over year to 10.2mn bl, or 111,465 b/d, in the third quarter as its gas production rose by 4pc to 1.5 bcf/d. Range updated its full-year guidance on its NGL pricing to Mont Belvieu plus $2.10-$2.35/bl, up from the 75¢/bl to $1.50/bl estimated in the second quarter, owing to gains in propane and butane prices at Mont Belvieu, Texas and higher spot premiums for exported cargoes out of the US. Range's average NGL estimates assumes 53pc of its production is ethane, 27pc propane, and 8pc normal butane. Mont Belvieu, Texas, LST propane averaged 72.9¢/USG in the third quarter, higher than the average of 68.9¢/USG in the third quarter of 2023. Mont Belvieu butane prices averaged 97.25¢/USG in the third quarter, up versus 83.47¢/USG last year. Range credited its term commitments on Energy Transfer's Mariner East system, which pipes NGLs from Range and other Marcellus producers to its export facility at Marcus Hook, Pennsylvania, with its higher realized prices on NGLs, particularly propane and butane, given higher netbacks from Europe and Asia. "International demand and pricing for NGLs remained robust in the third quarter, leading to near maximum US export capacity utilization," Degner said. "Improving Panama Canal throughput access, and a growing global fleet of LPG ships improved waterborne freight rates, and these factors combined to drive export price premiums to new levels relative to the Mont Belvieu index, and Range's portfolio of transportation and sales contracts provided reliable access to these premium markets." Argus-assessed prices for spot propane cargoes on a fob basis rose above Mont Belvieu +30¢/USG in mid-September, a multi-year high. Degner noted higher premiums on spot cargoes are expected to remain until US Gulf coast terminals expand capacity there in late 2025. By Amy Strahan Netback to Northwest Europe vs Mont Belvieu $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Grupo Mexico’s 3Q boosted by Cu output, sales

24/10/23

Grupo Mexico’s 3Q boosted by Cu output, sales

Sao Paulo, 23 October (Argus) — Conglomerate Grupo Mexico boosted its earnings in the third quarter, led by increased copper output and strong sales prices. The company produced 280,900 metric tonnes (t) of copper in the third quarter, up by 10.6pc from the year earlier period. Copper sales in the quarter increased by 8.2pc to 275,070t. The average copper price of $4.23/lb in the third quarter was 12.2pc higher than the prior-year period, according to Comex figures cited Tuesday by Grupo Mexico. The group's mining division sales, represented by subsidiary Americas Mining, rose by 17.8pc to $3.2bn in the third quarter from a year prior, the group said. Profit surged by 55pc to $864mn, while cost of sales rose by 5.4pc to $1.4bn. Total profits for Grupo Mexico, which has operations in mining, rail and infrastructure, rose by 44pc to $1bn in the third quarter on the year, with revenues increasing by 13.4pc to $4.13bn in the same period. The increase in copper output reflects gains at the Peruvian mines of Toquepala, Buenavista, Cuajone and Mexico's Caridad mine, the company said. "Grupo Mexico was able to benefit from a favorable copper price environment which, together with excellent production levels and strict cost control, translated into excellent financial results led by the mining division," the company said. The company nearly doubled its zinc output to reach 31,080t in the third quarter, driven by the Buenavista Zinc concentrator. Zinc sales rose by 50pc to 37,355t. Molybdenum production in the third quarter rose by 6pc to 7,270t from the prior-year period, while sales increased by 5.6pc to 7,326t. Average zinc prices of $1.26/lb in the third quarter were up by 14.5pc from the same three-month span in 2023, based on London Metal Exchange numbers. Grupo Mexico's Americas Mining subsidiary comprises main subsidiaries Southern Copper in México and Peru, and Asarco in the US. Capital investments rose by 30pc in the quarter, totaling $536mn . By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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