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The country produced 1.632 million units last month, down 0.4% year-on-year, and down 28.7% month-on-month, according to data released by the China Association of Automotive Manufacturers (CAAM) late on Tuesday March 10.
Sales reached 1.593 million units over the month, a marginal decrease of 0.2% on the year, but a drop of almost one third from January.
During the first two months of the year, China’s vehicle sales amounted to 3.913 million units, while production totalled 3.919 million units, respective year-on-year rises of 4.3% and 6.2%.
The sharp monthly drop is likely due to the fewer working days in February, a Shanghai-based auto industry analyst said. “We are cautious about the outlook for the whole year, as a slowdown in economic growth and rising pollution problems are likely to weigh on the auto market,” he said.
The sluggishness in the auto industry has already affected its upstream steel market. Domestic prices for cold rolled coil and hot-dip galvanized coil – which are major steel products used by the auto sector – have been falling over the past few months, and have both hit record lows, according to latest assessments by Steel First.
In light of the slack demand from the auto industry, China’s largest auto sheet producer Baosteel has cut its CRC and HDG prices by 100 yuan ($16) per tonne and 200 yuan ($32) per tonne respectively for April delivery.
China’s auto market lost ground in February, with decreases in both production and sales.