Auto industry braces for further steel industry consolidation

The wind is in the sails for the steel industry, and with further consolidation and a possible shift to value-based pricing, OEMs might have to get used to a new normal. By Xavier Boucherat

The steel industry has seen a global recovery in recent months, and at least one OEM has had things to say about the resulting rise in prices toward pre-crisis levels.

Speaking in the company’s Q4 2017 earnings call, Ford’s Chief Financial Officer Robert Shanks told analysts that strong commodities are proving to be headwinds for the OEM, and that whilst the aluminium recovery was also creating challenges, the real story was steel. Ford’s overall results fell short of analyst expectations, and these commodity headwinds, said Shanks, would continue to make themselves felt through the coming months – a sentiment echoed by Chief Executive Jim Hackett, who has already branded 2018 “a bad year”….

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