In steel, when the heat is literal, customers can't just turn to sunscreen. Instead, they look to aluminized sheet steels for use in applications where heat resistance is of paramount importance, such as automotive exhaust systems, some types of cookware, furnace heat exchangers and even some parts of barbecue grills.
Aluminized sheet is a comparatively small niche market in the United States, with only three companies--AK Steel Corp., West Chester, Ohio; ArcelorMittal USA, Chicago; and Wheeling-Nisshin Inc., Follansbee, W.Va.--producing the product for a market that consumes an average of between 700,000 and 780,000 tons annually.
AK Steel and ArcelorMittal manufacture the product, while Wheeling-Nisshin, a joint venture of Wheeling-Pittsburgh Steel Corp., Wheeling, W.Va., and Japan's Nisshin Inc., applies the coating to a carbon steel substrate provided by its parent companies. The coating, comprised of about 91-percent aluminum and 9-percent silicon, is applied via a hot-dip process. Three types of aluminized sheet are made Type I, which is used for automotive exhaust systems and heat exchangers; Type I stainless 409, used for long-life auto exhaust systems; and aluminized Type II, which goes into construction products and such items as corrugated pipe. Type II aluminized sheet is made by continuous hot-dip coating of steel strip in a molten bath of commercially pure aluminum.
While some producers perceive the market as being somewhat soft, others generally characterize conditions as stable.
The varied product uses mean producers must keep close tabs on the automotive and housing markets, Alan McCoy, AK Steel's vice president of community relations and government affairs, said. "The Type I aluminized market really is driven by the replacement exhaust systems for cars and light trucks and by the HVAC (heating, ventilation and air-conditioning) market. It used to be maybe that you and your dad would get in the car every few months and drive out to get a new muffler or tailpipe. You don't see that as much any more."
The auto market has been hit by advances in Type I stainless 409 and 439 steels, which provide longer life and improved corrosion protection. At the same time, the market for HVAC components is slower in the United States these days because of a slowdown in the national housing market. The market's hopes appear to be pinned on a boost in overall housing activity to drive up consumption of aluminized sheet for HVAC applications. Whether those hopes are well founded remains to be seen, but based on statistical indicators things are looking less than robust. For example, new housing starts in the United States fell to a seasonally adjusted annual rate of 1.19 million units in September, down 10.2 percent from the previous month and down 30.8 percent from September 2006, according to data from the U.S. Census Bureau.
The housing market impact is keenly felt, serving as an indicator of what's happening in the construction market. "For us, that's the culvert business and drainage systems and things of that nature," McCoy said. "The housing market impacts that, and then you have impact on that market from competing materials like concrete and others."
On the automotive side, steady demand in terms of vehicle builds would mean increased use of Type I stainless 409 and 439 aluminized products, although that would contribute to stagnation in the area of replacement parts.