Automakers divert away from blocked Baltimore port

Spanish Market: Metals
27/03/24

Automakers are adjusting their supply routes following yesterday's collapse of the Francis Scott Key Bridge at the Port of Baltimore, the busiest US port for auto shipments.

The Port of Baltimore handled 847,158 autos and light trucks last year, more than any other US port, according to the Maryland state data, with imports accounting for about 75pc of the volume, the Alliance for Automotive Innovation said.

With vessel traffic in and out of the port suspended indefinitely automakers said they will reroute deliveries though other east coast ports. This includes General Motors, which said it still expects minimal impact on its operations. Ford said it has already secured shipping alternatives where workarounds are necessary, but did not share details.

For Mercedes-Benz, Baltimore is among its busiest ports for imports. The company said it has flexibility to adjust its supply routes and noted ports in Charleston, South Carolina, and Brunswick, Georgia, as other top import locations. The port closure has no effect on Mercedes vehicle exports or parts supply at its Tuscaloosa, Alabama plant, the company said.

Volkswagen Group, which includes the Audi and Porsche brands, said it received about 100,000 vehicles last year through Baltimore to ship to US dealers in the Mid-Atlantic and northeast, but its operations will not be limited since its facility is located on the seaboard side of the bridge, at Sparrows Point. Volkswagen said it may see some trucking delays from highway rerouting, however.

Toyota relies on the Port of Baltimore primarily for vehicle exports, but said it is not the company's main North American port.

Stellantis, maker of numerous brands including Chrysler and Jeep, said it has begun discussions with transportation providers to ensure an uninterrupted flow of vehicles.

The US imported 723,435 cars and light trucks in January, up from 634,228 a year earlier, according to customs data. Mexico supplied just over one-third or 2.97mn of the total number of US vehicle imports in 2023, followed by Japan and Canada, with 17.3pc and 16.3pc, respectively.

By James Marshall

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06/02/25

Mexico factory activity weakens in Jan

Mexico City, 6 February (Argus) — Mexico's manufacturing sector contracted further in January, according to the latest purchasing managers index (PMI) survey from the finance executive association IMEF. Both manufacturing and non-manufacturing PMIs decreased for a second month in January, falling deeper into contraction territory. "Mexico's economy began 2025 with no growth at all," said IMEF, "with the outlook made highly uncertain moving forward by US President Donald Trump's first actions in office." While Trump's proposed tariffs remain on hold, IMEF warned they could severely impact Mexico's economy by further stalling growth and triggering inflation. The manufacturing PMI dropped to 45.6 from 47.5 in December, marking its tenth consecutive month below the 50-point expansion threshold. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP. Within the manufacturing PMI, the new orders index dropped 3.5 points to 42.9 and deeper into contraction. Similarly, production fell 3.0 points to 42.8. Employment held at 47.4 in January, now in contraction for 12 consecutive months. The non-manufacturing PMI — covering services and commerce — declined again, slipping to 49.1 in January from 49.6 in December. New orders dropped 1.9 points to 47.9, production fell 1.4 points to 47.1 and employment held at 48.7. IMEF further raised concerns over Mexico's trade and services sectors — key drivers of Mexico's post-pandemic recovery, noting a recent loss of momentum. The group added this may have implications on the non-manufacturing PMI with its associated sub-components "on the verge of contraction". By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Quota liberalisation could be reversed for steel

06/02/25

Quota liberalisation could be reversed for steel

London, 6 February (Argus) — The liberalisation of hot-rolled coil (HRC) quotas since 2018 could be reversed in the European Commission's functional safeguard review, according to market sources. This alone would lead to a volume cut of about 15pc since the quotas were introduced. European producers' association Eurofer has requested a 50pc cut in flat product quota volumes, to align import share with 2012-14, when it says apparent consumption was last in line with current levels. Eurofer estimates import share on flat products at nearly 28pc this year compared with an average share of just over 16pc in 2012-14. Eurofer removes HRC destined for internal processing into cold-rolled coil and hot-dip galvanised coil from its calculation of overall market supply. Including HRC for internal processing, import share has risen from just below 6pc since 2012-14 to more than 14pc, according to Argus calculations. The average HRC import rate over 2012-14 was 4.73mn t/yr, which is about 85pc lower than the 8.8mn t likely to be imported in 2024 — this assumes imports of about 300,000t in December 2024, calculated from a quota drawdown during the period with some additional material from countries exempt from the safeguard on HRC. Sources suggest there cannot be a wholesale cut in quota volumes that is compatible with WTO rules, but that the repeal of liberalisation and some other fine-tuning measures could add up to a meaningful revision. The proposal to reduce the 'other countries' cap to 7.5pc from the current 15pc would effectively halve potential volumes from sellers within that quota, such as Japan, Vietnam and Egypt. Removing carryover of unused quota and including previously exempt countries into the quota would also have an impact. Imports could potentially be capped at a certain share of overall supply, some said, although it is not clear how this could be administered. The commission has received significant feedback from the buy side of the market, given the substantial reduction sought by Eurofer and its potential impact. Some buyers suggest 2017 or 2018 could be a more accurate point of reference than 2012-14. During this period, imports have risen by almost 32pc from 6.6mn t, while market supply has contracted by about 28pc, led by domestic output dropping by almost a quarter. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan’s Honda, Nissan mull scrapping merger plan

06/02/25

Japan’s Honda, Nissan mull scrapping merger plan

Tokyo, 6 February (Argus) — Japanese car maker Honda and Nissan are considering ending merger talks, a representative of Honda told Argus today. Ending negotiations for proposed merger is among the issues the two firms are discussing, Honda's representative told Argus on 6 February, without providing further details. Honda will make an official announcement regarding the deal, including its course of action, in mid-February, according to statements released by the firm on 5 February. Nissan similarly commented that the firms are "in the stage of advancing various discussions", according to a statement the company separately released on 5 February. This includes "the contents of the report", the statement said, referring to the local news story about a possible withdrawal from the basic merger agreement with Honda. Nissan reiterated that the report is not based on any official announcement from the company. This comes only several weeks after the firms launched formal merger negotiations in late December 2024. This included setting up a joint holding company under which the current brands would operate as subsidiaries. The merger plan was partly aimed at jointly developing electric vehicles (EVs) along with studying possible areas of co-operation in developing automotive software platforms, core components relating to EVs and complementary products. Tough negotiation was anticipated from the beginning partly because of Nissan's financial struggles. Honda had suggested the merger plan could be scrapped depending on Nissan's turnaround, reiterating that the proposed merger is not aimed at alleviating Nissan's financial situation. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US met coal market mixed on China tariffs

05/02/25

US met coal market mixed on China tariffs

London, 5 February (Argus) — US coking coal market participants are still mulling their position since President Donald Trump reignited the country's trade standoff with China and Beijing retaliated on Saturday with substantial tariffs . Market sources said the retaliation will affect some coals more than others, but disagree on the severity of the risk. Many US producers ramped up exports to China in 2020 and 2021 following restrictions on Australian imports. But trade flows have slowed in the past two years largely because of lower-priced Russian and Mongolian met coal driving down Chinese price expectations and wider weakness in the seaborne coking coal prices making US sales to China less attractive. The Chinese tariffs announced yesterday apply to US coal and other energy products such as crude and LNG . Starting on 10 February, a 15pc levy will be added to the pre-existing 3pc tax on US coking coal imports for a total 18pc. The industry is cautious to draw conclusions as China returns from holiday and a diplomatic solution to the dispute is still deemed possible in light of the start date. But seller sentiment has generally been negative on the threat of further downward price pressures in a struggling market. "We are still hopeful that a trade war can be averted, or at least not last too long. Trump does a lot of talking as part of his negotiation style, but eventually, it is good for both countries to find a solution," one US producer said. Expectations are for some US exporters to turn to India as an alternative, but again they would face competition from Russian producers. Still, some in the market question how real an impact the measures could have, in particular citing the strong presence of Core Natural Resources' low-cost Bailey coal in the shipment volumes to China. Market estimates suggest that around 2mn-3mn t of Bailey coal was shipped to China last year, accounting for about 30-40pc of US exports to China. Consol, part of the newly merged Core, reported an average cash cost of $35.85/st for coal produced at its Pennsylvania mining complex, where Bailey originates, in the quarter ending 30 September last year. "I don't think it will be the consequence that everyone fears because the higher-quality US coals are already too expensive [in China]," one European trader said. "The Chinese are not looking to buy too much material." A common reason sellers give for not dealing with China is that many Chinese buyers contractually expect US sellers to take the risk of tariff hikes. The expectation is likely to deter even more producers now that risk is soon to be reality. "I can't imagine anyone in the US is going to be accepting that contract now," an Alabama-based supplier said. Not all downhill But there may still be some upward support ahead for US coking coal prices. US production has slowed over the past half year, first with a fire shutting the Allegheny Metallurgical Coal's Longview mine in West Virginia and more recently the fire at Core's Leer South mine resulting in a force majeure . Heavy snow fall in December and mine operators cutting additional shifts in a weak price environment has also curtailed output. In Europe, ongoing production issues at the coking coal mines operated by JSW in Poland may also add to a supply squeeze in the Atlantic. While Chinese tariffs may push down prices of US coal, stronger Chinese demand for Australian coal could potentially lend support to fob prices in Asia-Pacific too. How exactly US supply will be diverted from China in the event of a trade war and how this will affect prices is very much an open question. When China first imposed tariffs during its trade war with the US in July 2018, Argus ' high-volatie A fob Hampton Roads assessment rose by $22/t to its height in November. By the time the dispute was wrapping up in 2020, prices had sunk to near $60/t below pre-tariff levels. By Austin Barnes and Siew Hua Seah US coking coal exports since 2019 by partner '000t Partner 2019 2020 2021 2022 2023 2024 India 4,260 4,035 3,235 7,657 8,400 9,604 China 1,064 1,485 10,337 2,432 4,846 8,123 Brazil 6,707 6,182 5,100 5,353 6,271 6,297 Netherlands 4,628 3,116 3,041 4,960 4,068 4,609 Japan 6,011 3,291 2,950 3,617 4,594 3,858 Turkey 1,442 2,469 743 1,361 1,387 2,270 Germany 405 33 1,006 1,424 1,315 1,193 France 1,085 773 612 1,185 999 1,041 South Korea 2,473 2,090 824 1,161 1,032 1,013 Spain 418 333 493 653 616 664 Tariffs pulled back in March 2020 — Global Trade Tracker US high-volatile coal prices fob Hampton Roads $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Q&A: Africa's role in the EV revolution

05/02/25

Q&A: Africa's role in the EV revolution

London, 5 February (Argus) — The African continent plays a vital role as a supplier of raw materials essential for electric vehicles (EVs), but what about the downstream? Argus spoke with Dave Coffey, chief executive of the African Association of Automotive Manufacturing(AAAM), at the sidelines of the Indaba Mining Conference in Cape Town, South Africa about Africa's EV ambitions. Which African countries are ready for EV adoption? We see demand for motorcycles and public transport today, and east Africa is leading that market. The passenger car will take much longer because of affordability issues. Today, we are struggling to increase the sale of internal combustion engines (ICE) and transitioning to electric vehicles will not happen quickly. Instead, you are likely to see an increase in three-wheelers or even four-wheeled micro-mobility options, while passenger cars will lag. Also, countries will transition at different speeds depending on their natural resources. Some countries have gas, CNG, and they're pushing to convert vehicles to piped natural gas (PNG). Others are pushing for green hydrogen. You're going to see different journeys on the transition to electric mobility. And if you just look at India and China — I often use India as a benchmark for Africa because of its similar population — they are exploring all different types of powertrains, and Africa will be likely to follow suit, moving at various speeds. Which countries are better positioned in the EV supply chain? South Africa clearly has the greatest demand on the continent today. If you look forward, say, 10 years, Egypt will have strong demand. Egypt will come through and can produce 500,000 vehicles in the next decade for its own consumption. Algeria is also taking off. Its industry was closed for a number of years owing to corruption issues. Algeria could get to 400,000 vehicles. Morocco will get to 220,000 vehicles for its own use, not for exports. Tunisia will probably be at 80,000 cars. In sub-Saharan Africa, the Ivory Coast may see demand for 80,000 to 90,000 vehicles. We are investing significant effort into driving demand in sub-Saharan Africa because of the vast opportunities present there. However, it is essential to provide affordable mobility solutions to reduce the reliance on used vehicle imports. What are the main challenges apart from affordability? It's the political will to implement the industrial policy, because how do you switch over and cut off used vehicles? You can't industrialise and hope people will buy when they can't afford to buy. The big issue is access to affordable finance. It's a big issue that we're working on in Africa. Imagine if you have a new vehicle that becomes a used vehicle and attracts vehicle finance. It'll compete with the used cars coming in. Financing is a critical issue, both from a consumer perspective and an investment perspective. You're getting component manufacturers wanting to invest. It's not a big ticket out of $10mn. It might be $2mn, and they're not able to access capital. Finance all around is a big development drive in Africa. Are there any logistical problems delaying EV adoption? My view on logistics is that, for example, people say we can't ship between one country. We've already seen, and I've got examples, that when the volume picks up, it just gets sold. It does. Because then you've got shipping lines that will put on the shipping routes. Yes, Africa does face logistics challenges, particularly the lack of rail infrastructure. However, consider this: currently, intra-Africa trade is only at 17pc. Imagine if that figure increased to 50pc. We would need a significant number of commercial vehicles to support that growth. Commercial cars have a huge future for Africa as a result of the intra-Africa trade we're trying to drive. Creating demand drives the value chain and the entire ecosystem. We need to generate demand. By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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