Car prices rise as commodities rocket on high demand

Car prices rise as commodities rocket on high demand

2021-05-09 11:01:00 PM

Car prices rise as commodities rocket on high demand

Copper, steel and aluminium are at or near record highs amid lagging supply

Eddie Spence and Elisabeth Behrmannpicture: 123RF/WELCOMIAManchester/Munich— Cars are back in vogue courtesy of the pandemic. They’re also getting more expensive, thanks partly to surging commodity prices.Many of the essential ingredients for carmakers — such as copper, steel and aluminium — are hitting or approaching record highs this year as the lagging supply cannot keep up with stimulus-driven demand. The Bloomberg commodity spot index jumped to its highest since 2011, with metals up 21% so far this year.

LIVESTREAM | Alleged serial killer Nomia Ndlovu back in court Candidate list row | Helen Zille believes ANC was tipped off VIDEO | Zuma wants Downer out

Should the current rally morph into a supercycle, rising car prices could forebode inflation across the board. Analysts at JPMorgan Chase & Co estimate the price of a car’s raw materials have climbed 83% in the year to March. As those pieces typically make up about 10% of the cost of building a vehicle, the price tag for a $40,000 car would have to increase 8.3% to offset the rally, analysts for the bank said.

“We’re definitely feeling the commodity headwind,” Jim Farley, CEO of Ford, said last week. “We’re seeing inflation in a variety of parts of our industry, kind of in ways we haven’t seen for many years.”Carmakers usually struggle to pass on higher costs, but demand is booming as major economies reopen and many consumers continue avoiding public transportation. The global semiconductor shortage also is inhibiting production, keeping inventory tight and driving up vehicle prices. headtopics.com

In the US, car supply is so limited that rental companies are resorting to buying used vehicles at auction rather than new ones.The main contributor to higher commodity costs hitting the industry is the steel needed for chassis, engines and wheels. The metal’s recent rally has smashed records as China — by far the biggest producer — took measures to curb output.

The boom in copper prices adds to the costs of electric vehicles just as the industry implements an energy transformation to meet tighter emissions standards. EVs use nearly 3½ times more copper than fuel guzzlers because of the larger amount of wiring inside, according to consultancy Wood Mackenzie.

The increases may hurt carmakers such as Tesla and Volkswagen that are trying to make EVs more price-competitive with traditional cars. They also may encourage carmakers to explore alternative chemistries for their EV batteries. The majority of cells use some combination of lithium, cobalt and nickel, which have jumped a minimum of 47% each in the past 12 months.

Ford and BMW were among those investing $130m this month in battery start-up Solid Power, which is working on cells that would remove the need for those metals, leading to a tenfold decline in power pack costs.“They are looking to spread that risk,” said Caspar Rawles, head of price and data assessments at Benchmark Mineral Intelligence. “There is no hedging for lithium or cobalt.” headtopics.com

Osaka drops out of top five in WTA rankings Melbourne to buy trains from French firm amid diplomatic spat Maintenance payments: We have no food, says mom as she anxiously awaits payment | News24

BMW expects headwinds from rising commodity prices of as much as €1m for the year, CFO Nicolas Peter said during an earnings briefing on Friday. The luxury-car maker singled out rhodium, steel and palladium as particular worries in the coming months.Longer term, BMW is working to be less exposed to price squeezes in raw materials. From 2025, the carmaker plans to produce vehicles on a new architecture that will allow recycling of materials such as steel, aluminium and plastics to make new cars.

“We’re seeking partnerships” to refine the necessary technologies, BMW CEO Oliver Zipse said.Jeep maker Stellantis, formed from the merger of Fiat Chrysler and PSA Group, said it needed to recover some of its higher costs, and the marketplace is supportive, so far.

“It’s hard to imagine a better environment with which to pass through the impact of supply shock and price inflation to consumers who are effectively lining up to take delivery of their new car off the car carrier,” analysts at Morgan Stanley said in a note. “It’s a seller’s market in autos.”

Read more: Business Day »

Mother reunited with baby after kidnapping

A 7-month-old baby has since been safely returned to his mother after a hijacking in Cape Town on Monday.

The best choice I've made this year was investing in cryptocurrency and forex trading and earning from home. With the help of KevinKatch2 I've been earning ZAR60,353.00k weekly I've never regretted this decision fellow RSA, 🙏🏻 For all those who are new to this working from home Bitcoin trading options Here's a little tip: Get a trusted Bitcoin expert and stick to her MALYAROVALARA_ Invest and play at similar times each day. Because : In times of chaos, your investment is your anchor to success⚖️

Woman found dead in car partially submerged in Harties damA woman, believed to be about 39 years old, was found dead in her car which had plummeted into the Hartbeespoort Dam in the North West, the National Sea Rescue Institute said on Sunday. The best choice I've made this year was investing in cryptocurrency and forex trading and earning from home. With the help of KevinKatch2 I've been earning ZAR60,353.00k weekly I've never regretted this decision fellow RSA, 🙏🏻

Woman found dead in car partially submerged in Harties damA woman, believed to be about 39 years old, was found dead in her car which had plummeted into the Hartbeespoort Dam in the North West, the National Sea Rescue Institute said on Sunday. Cryptocurrency for all Bitcoin beginner's !!! are you a Bitcoin Holder, Buyer, Seller or about starting up a trade? Start trading without sending your bitcoin or asset to anyone....but invest it yourself contact and ask sir californiaBTC1 how ?

Devi | YapYap Car Rentals & Steve Harvey | 06 May 2021Blacklisted? Under debt review? Need a car? No problem, YapYap Car Rentals has the answer for you! Just R2 000 will get you in! Excited? Yes? Watch out! Albert Venter, is the man behind YapYap. I never thought of meeting a legit bitcoin trader after been scammed many times at my age but the heavens sent GRACRUSS who guided me and help me make a living through bitcoin with my LUNO app , I recommend you to meet her now and also be a beneficiary of good work Words can neither qualify nor quantify how helpful your guidance and advice has been. I am forever grateful for your support.Thank you Christbitco I just received my profit in my wallet thanks you very much Put the episodes back on YouTube again man, please

Woman found dead in car partially submerged in Harties damA woman, believed to be about 39 years old, was found dead in her car which had plummeted into the Hartbeespoort Dam in the North West, the National Sea Rescue Institute said on Sunday. I don't really know where to start but I have to say it I know it's funny 🤭 to you but he's real believe it or not I know what I'm making through the hands of this man Christbitco he's a life changer my future manager

Cash-in-transit guard bust after 'loading millions into car boot'The man allegedly loaded the money bag into his private vehicle, left the premises without being searched and never returned to work. I am sure he is white, these guys they do as they wish in this country. They are above the constitution of the country. Stupidest move of the century people should watch money heist than believing Juju Can't blame him for trying😁😁😁

Cash-in-transit guard bust after 'loading millions into car boot'A Fidelity security guard who allegedly loaded millions of rand into the boot of his car and never returned to work was expected to appear in court for theft on Monday. Hope he burried it far away He is coming from zimbabwe claim to be zulu thats fidelity lot of zim are in control He was on his way to Zim.