GM has announced it will restart some of its auto plants that were temporarily shut down due to the global shortage of semicondutor chips. What is good news for some, however, could pose problems for others. And have you ever made a major business decision based on cold coffee?
Automotive sector: more chips mean less available steel
The automotive industry has been facing a shortage of semiconductor chips for several months. Car manufacturers have already had to reduce or even stop car production.
General Motors (GM) announced yesterday, May 27, 2021, that it will restart several North American and global auto plants. These had been shut down for weeks due to cited shortages of semiconductor chips.
Good news for GM, workers and customers. But when major automotive companies start production, many other primary products are needed. Among them, steel. So the news from General Motors could mean that large quantities of steel will have to be diverted to the automotive sector. Which could mean a further shortage in the supply of steel products for other industries.
Business Tip: Beware of cold coffee!
As a reader of news, do you always pay attention to the date of an article? We look through hundreds of news items for you every day and select a few that should be of use not only to us, but also to you as our readers.
Be careful of snapshots
In the process, we repeatedly come across articles that promote snapshots in the steel industry with lurid headlines and which are cold coffee the very next day. We notice this time and again, especially with the pay providers of so-called industry news.
Nickel: Yesterday pessimistic – today booming
Just today we came across an article that once again underlined the growing pessimism on the commodity exchanges and conjured up the alleged weakness of nickel – at that time nickel was still at approx. $17,200 per ton on the LME. And at about $19,630 per ton on the SHFE.
This morning (May 28, 2021) we were already $1,000 per tonne further on the LME and briefly had a level of $18,200 per tonne. A gain of about 5.81% over Thursday. Right now it’s down a little bit again and is around $18,000 per ton on the LME. So far still in calm waters.
On the Shanghai Futures Exchange, nickel is up almost 4.85%.
Local steel prices = export steel prices?
Also, local Chinese stainless steel prices are repeatedly referenced in the industry media – and used as a reference for a market trend. Be wary of such price quotes. The local Chinese steel market is different from the Chinese export market. We reported on this yesterday (May 27, 2021).
Our recommendation to you: form your opinion about current market developments from more than one source. Often, and this is often not mentioned, market assessments are only opinions and they are used to influence the commodity markets in a certain direction.
Please feel free to use our information offer as a further building block in your opinion making. Our opinions and assessments come from practice for practice.
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We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.