We begin the week’s news with a slide in raw steel production. Mills last week operated at an average capability utilization rate (ACUR) of 77.7 percent, down from the previous week. In the corresponding week last year mills operated at an ACUR of 76.3 percent. Thus far this year mills have operated at an ACUR of 77.1 percent, down from the same period last year when mills operated at an ACUR of 77.8 percent.
Light vehicle sales and production in North America are expected to remain strong through the rest of this year, but the recovery of heavy duty truck build rates from a sharp decline in the second half of 2012 is moving slowly, Tier 1 auto suppliers said.
In North America, our guidance now assumes a 5-percent increase in year over year light vehicle production. That’s up over 1 point from our prior estimate.”
Delphi Automotive LLP chief financial officer
American Axle & Manufacturing Inc is bullish based on its support of General Motor’s Co.’s next generation full size truck and sport utility vehicles. President & CEO David C. Dauch said, adding his company is also helping Chrysler with the launch of the new heavy duty series Ram pickups. Adding “Market timing for these critical GM and Chrysler launches has been outstanding, the full-size pickup market is red-hot.”
TRW Holdings Corp. chairman, president and CEO John C. Plant said the forecast, up 5 percent from 2012, is spurred by “strong consumer demand and new product introductions.”
Dana Holding Corp lowered its heavy duty truck production guidance down slightly. “There is still a degree of uncertainty in the Class 8 market.” President and CEO Roger J. Wood said during the company’s earnings conference call.
I read a white paper issued by the Chicago Fed on the economic impacts of changes in energy production. I found it interesting and thought I would share the following with you:
Recent technological advances in the ability to extract natural gas and other fuels from shale rock are already having significant effects on energy markets. For example, coal plants scheduled to retire in the Midwest and South are being refitted as natural gas plants. The long haul trucking industry is beginning to adapt its fleets and general business models to consumption of natural gas based fuel as opposed to diesel. And much of the chemical manufacturing industry is redirecting investment onshore, in anticipation of sustained low prices for these fuels and feedstock’s. Despite these changes, some argue that the potential growth in mining of energy from shale rock will be dampened by the developmental and environmental risks associated with fracturing shale rock.
Ben Schlesinger, Benjamin Schlesinger and Associates, noted that people have yet to grasp how much and in what ways access to shale gas will positively affect the US economy because most studies are outdated. US gas production has increased tenfold since 2005, reaching over 40% of US gas production, and has added the equivalent of 4.6 million barrels of oil a day since 2001. This new source of gas is fortuitous, since conventional onshore US gas production has been slowly declining for over a decade.
… concurrently, the technology involved in drilling and fracturing has been improving rapidly (e.g. with the advent of multiwell drilling and dry fracking), thus lowering costs and increasing yields. Environmental cleanup methods and recycling of associated wastewater have also advanced as the industry has begun to focus more on gaining public support.”
In conclusion, the two-day conference “raised excitement about the prospects for future growth and development, while also raising important questions for further research. The “newly found” fossil fuels in North America seem to hold the potential for profound and widespread benefits in terms of energy supplies and lower costs.”
The August 2013 Empire State Manufacturing Survey
Released on 8/15, it indicated that conditions for New York manufacturers improved modestly for a third consecutive month. Manufacturers predicted overall sales or revenues would be 5 percent higher in 2013 than in 2012; employment levels and capital expenditures were expected to be little changed from last year.
Industrial production in the US was unchanged in July after having gained 0.2 percent in June. In July, manufacturing production declined 0.1 percent. The output of mines advanced 2.1 percent, its fourth consecutive increase. Capacity utilization for total industry edged down 0.1 percentage points to 77.6 percent in July, a rate 0.3 percentage point below its year earlier level and 2.6 percentage points below its long run (1972-2012) average.
Well, we are two thirds of the way through summer, some go back to school next week. My, how the time flies by….
Have a great weekend and…..
God Bless America