Ford is significantly cutting automotive production in July as the ongoing global shortage of semiconductor chips continues to affect automakers. a spokeswoman said July 1.
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"While we continue to manufacture new vehicles, we're prioritizing completing our customers' vehicles that were assembled without certain parts due to the industry-wide semiconductor shortage," Ford spokeswoman Kelli Felker said in an email to S&P Global Platts.
The affected plants include:
- Chicago Assembly Plant will be down the weeks of July 5, 12, 19 and 26 and will run two shifts the week of Aug. 2
- Dearborn Truck Plant will run two crews the weeks of July 12, 19 and 26
- Flat Rock Assembly Plant will be down the weeks of July 12 and 19
- Hermosillo Assembly Plant will run one of two shifts the weeks of July 12 and 19
- Kansas City Assembly Plant F-150 line will be down the weeks of July 12 and 19, while the KCAP Transit line will be down the week of July 19
- Kentucky Truck Plant will be down the week of July 12 and run two shifts the weeks of July 19, 26 and Aug. 2
- Louisville Assembly Plant will run on a reduced schedule the week of July 19
- Oakville Assembly Complex will produce Nautilus only the weeks of July 19, 26 and Aug. 2
Separately, Ford's Michigan Assembly Plant will be down the weeks of July 5 and 26 due to an unrelated part shortage.
Global automotive production has been challenged by the shortage of semiconductor chips throughout 2021.
Ford CEO Jim Farley in late April said the company expected to lose about 50% of its planned second quarter production and was assuming it will lose roughly 10% of planned production in the second half of the year as a result of the chip shortage. The shortage is expected to drive a loss of about 1.1 million wholesale units for the year, Ford CFO John Lawler said in the company's Q1 conference call April 28.
Addressing the semiconductor shortage is a priority of the Biden administration and vital to US national and economic security, Commerce Secretary Gina Raimondo said on Twitter June 30.
The Senate approved a $52 billion investment package to boost semiconductor research and manufacturing June 8 with the legislation moving to the House of Representative for final approval.
Steel buyers keep close watch as prices remain elevated
US flat-rolled steel market participants are keeping a close eye on updates about auto shutdowns as hot-dipped galvanized sheet prices have reached fresh all-time highs each week and those shutdowns would at least help mills catch up with their backlogs and stabilize prices.
"I'm feeling like many people in the industry feel everything is poised to continue to ramp up at the same level it has for months, however with a reduction in demand from auto it could depress the market by creating a catchup scenario along with spot being offered," a service center source said.
US hot-dipped galvanized prices have continued to rise sharply as products remained very scarce in the marketplace.
The daily Platts TSI US HDG-HRC index rose to $1,995/st July 1, while the daily Platts TSI US HDG-CRC index was set at $1,994/st. The assessments are up $872/st and $871/st, respectively since the start of 2020.
US steel market participants reported expectations of stronger finished steel prices in July, according to the latest monthly survey of the market by Platts.
In the survey of US producers, distributors, traders and end-customers conducted ahead of July, the index for finished steel price development dipped slightly from June's 75, but remained strongly positive at 72.1, indicating continued expectations for increases in the near term.