Bloomberg reported that carmakers from Ford Motor Co to Audi AG and Jaguar Land Rover Plc are using record amounts of aluminum to replace heavier steel providing relief to producers of the metal confronting excess supplies and depressed prices.
According to Mr Gayle Berry, a London based analyst at Barclays, Aluminum content in vehicles is rising about 5% a year and growth will accelerate in the next decade as drivers seek improved fuel economy and lower emissions. Mr Berry said that “This is one of the reasons why aluminum has the most bullish long term demand outlook of all the base metals.’
Mr Kirill Chuyko an analyst for BC Financial Group in Moscow said that “Automakers like Ford the second largest in the US should help pull aluminum suppliers out of a slump. Some 25% of demand is from the transport industry with cars and light trucks using 2/3 of this or about 10 million tonne a year the International Aluminum Institute estimates.”
Mr Kenneth Hoffman, Princeton based sector head for metals and mining research at Bloomberg Industries said that “The F-150 is the best selling vehicle in North America and would likely trigger all other truck makers to convert to increased aluminum content.”
Mr Charlie Durant, senior consultant at London based metals analysis company CRU said that “Tightening fuel economy regulations continue to drive the growth of the aluminum usage. The transportation sector will be the fastest growing end use segment for aluminum demand due to higher automotive build rates in developing nations and increasing intensities of use in the developed world.”
CRU’s Durant said that “Stepped up use of aluminum in cars will fuel strong growth in demand for the light metal and we forecast that total consumption of primary aluminum will expand by a compound annual growth rate of 5.9% over the coming 5 years.”
Rusal’s Mr Hodgson said in an e mailed response to questions that “We expect new applications for castings to develop but rolled aluminum products for hoods, doors, fenders, deck lids, lift and tail gate and body structures are expected to drive the majority of the growth from 2013 to 2025.”
The aluminum used in each car built in Europe almost tripled between 1990 and 2012 to 140 kilograms from 50 kilograms as manufacturers pursue higher fuel efficiency. Among U.S automakers the figure climbed to 155.6 kilograms in 2012 from 148.3 kilograms in 2009 according to Ducker Worldwide Automotive a global market research company in Troy, Michigan. For each 10% of reduction in vehicle weight car manufacturers achieve a 5% to 7% fuel saving
Aluminum Association said last month that global automakers may increase use of the light metal to 249.5 kilograms per car in 2025 from 148.3 kilograms in 2009. North American applications of aluminum in cars may jump 66% by 2025 to at least 3.7 million tonne. In Europe the aluminum content in cars may rise to as much as 180 kilograms per unit by 2020.
Source - Bloomberg