Base metals slipped in early European trading, with aluminum futures falling 1.3% to $3,050.50 a metric ton and copper down 0.9% to $13,215.50 a ton. The decline accelerates aluminum's monthly drop of 18% as the reopened Strait of Hormuz eases supply concerns from Persian Gulf producers who supply over 10% of global output. A stronger dollar also pressured dollar-denominated commodities, while traders await Washington's refined copper import signals.

Malaysia's auto sector faces intensifying competition despite expectations of stronger sales in the second half, driven by fuel subsidies and electric vehicle demand. CIMB Securities maintains a neutral rating but favors Bermaz Auto and Hi Mobility, citing a pipeline of new models from national brands. However, the analyst warns that dollar strength and margin pressures could weigh on sector earnings amid challenging financing conditions.

Record-length auto loans are climbing as buyers seek affordability, with 36.5% of new car purchasers taking 73-month or longer loans in Q2, up from 27.3% a decade ago. Loans extended to 84 months or longer hit another peak at 23.9% of buyers, according to Edmunds. This trend lowers monthly payments but traps buyers in negative equity positions, creating long-term financial vulnerability as vehicle prices remain elevated.

The Trump administration's decision not to renew USMCA places the automotive sector at the center of broader trade tensions with Mexico and Canada. While existing deal terms extend into the next decade, the move signals potential renegotiation pressure that could impact agricultural market access and other sectors. The automotive industry's integration across North American supply chains makes it a critical bargaining chip in future negotiations.