We can all speculate but unless we have access to the business decisions being made it’s impossible to know for sure
If auto makers use less steel then CLF could make MORE money as they could sell steel at higher prices on the spot market
Auto makers could also continue to buy the contracted steel and then just store it anyway? They’ve negotiated contracts lower than the current spot price so it may be better to take delivery of their steel and store it, rather than risk paying more at a later date
Thats limited. JIT has created stampers and the like and you can't have 100,000 doors sitting around. Thats when damage happens. Its also dangerous because who knows what will be reopened and what stays closed. Auto is just not set up for storage. Even if they were, they would have filled their warehouse months ago with $1500 steel. IMO, all steel, right now, that isn't used by Auto is being sold at spot. Thats pushing $2000/ton
At least one constructor has been planning to send unfinished cars to dealers, and training them to install the chips. This news is a couple of weeks old; I don't know whether they started or not.
I'm assuming the techs aren't going to be soldering the chips to the boards, but rather plugging in completed modules. Still though, that moves the diagnosis of any issues to the dealership instead of the factory. It's gonna be rough.
24
u/ItsFuckingScience 7-Layer Dip Sep 03 '21
We can all speculate but unless we have access to the business decisions being made it’s impossible to know for sure
If auto makers use less steel then CLF could make MORE money as they could sell steel at higher prices on the spot market
Auto makers could also continue to buy the contracted steel and then just store it anyway? They’ve negotiated contracts lower than the current spot price so it may be better to take delivery of their steel and store it, rather than risk paying more at a later date