China’s auto industry slows in August

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Sales and output volumes were largely up on both an annual and monthly basis. However the growth rate slowed significantly compared with year-earlier levels.

Production volumes reached 1.71 million units in August up 2.2% year-on-year, while sales totalled 1.72 million tonnes, up 4% year-on-year. This compares with respective annual rises of 12% and 10% in August 2013.

Production volumes were down a negligible 0.3% from July’s levels, while sales rose 6% over the same period.

During the first eight months of the year, China produced a total of 15.22 million vehicles and sold 15.02 million vehicles, respective year-on-year increases of 8.6% and 7.7%, CAAM said. Growth is about four percentage points lower than the previous year, however.

The slowdown in the auto sector has put more pressure on the upstream steel market. Baosteel, the country’s largest auto sheet producer, has announced to cut its prices for both cold rolled coil and hot-dip galvanized coil by 100 yuan ($16) per tonne for October delivery, which is typically a peak month for steel consumption.

Other major auto steel producers including Wuhan Iron & Steel and Anshan Iron & Steel are expected to follow Baosteel’s lead, in an effort to increase bookings, market sources predicted.