What does an Apple iPad have in common with solar power
technology infrastructure? More than you might think. According
to some aluminum producers, both markets are primed for serious
growth and offer an exciting opportunity for the aluminum
Analysts are hesitant to overstate the impact that growth in
consumer electronics and solar power components-even ones that
prominently feature specialty aluminum components-might have on
overall aluminum demand, but in the age of weaker automotive
sales and a lagging construction market, aluminum producers
said any chance at increased market share is a worthwhile
The most visible new end-use application for aluminum comes
in portable sizes. Some of today's most popular consumer
electronics feature visible aluminum components, like Apple's
new iPad sporting a matte aluminum wrap, which passed the
1-million-unit sales mark in the first week of May. As Apple
and other high-end original equipment manufacturers (OEMs)
shift fashion and consumer taste away from plastic and
magnesium and toward aluminum, how much benefit will the
aluminum market really experience?
Perhaps a lot, according to Randall Scheps, who earlier this
year was appointed to Alcoa Inc.'s newly created position of
director of consumer electronics market development.
Aluminum use in consumer electronics is projected to more
than double in the next five years as consumers increasingly
demand electronics that they perceive to be both stylish and
environmentally friendly, Scheps said. Aesthetically, aluminum
is less likely to show fingerprints and signs of wear than
alternative materials, like chrome or polished plastic, and
environmentally aluminum is one of the most recycled materials
in the world.
Accordingly, the company is gearing up to expand its reach
in the market. "We are targeting all of the major OEMs. The
electronics OEMs that use a lot of aluminum today tend to set
the fashion for the industry, which other OEMs only want to
emulate," Scheps said. "We've been watching some fairly major
trends-all of our major OEM customers are seeing increased
demand for new aluminum content."
Scheps estimates that aluminum use in target segments like
laptop computers, smart phones and flat panel televisions will
double to 800 million pounds over the next five years.
"Aluminum laptop cases can be recycled, and aluminum has a
lower lifecycle CO2 footprint than either plastic or
magnesium," he said, noting that while not all consumers think
about recyclability when buying electronics today, an
increasing number will make it a priority in the future.
"Certain leading-edge customers are there, but not all
customers are there yet. The footprint will be a metric that
everyone will care about at some point."
The electronics segment might represent an attractive growth
opportunity in terms of percentage growth, but the volume of
aluminum demanded by manufacturers won't be enough to make up
for the loss of demand in core end-markets like construction
and transportation, analysts said.
"I suppose in theory it could be a very large market.
Individually, though, the percentage by weight of the metal
would be fairly low, and it's probably fairly insignificant in
terms of a 38-million- to 40-million-tonne global market," CRU
Group analyst Jon Barnes said.
Luckily for aluminum producers, consumer electronics aren't
the only potential growth story for the light metal. Solar
panel technology also might see a new wave of aluminum demand,
market sources told AMM.
Traditionally, aluminum has played a small role in
concentrated solar power technology (CSP) in the form of
aluminum trusses, or framework, to support the parabolic glass
troughs used to concentrate the sun's energy. In a departure
from tradition, Pittsburgh-based Alcoa is developing a new take
on existing CSP technology that incorporates aluminum into the
troughs themselves in place of existing glass mirrors-a
modification that the aluminum producer said will lower the
installation costs associated with new solar fields and allow
solar technology manufacturers to scale up more rapidly.
"The concept of using aluminum in solar technology itself is
not a new concept. What's fairly new is the particular way they
designed the panel," said Chuck Kutscher, manager of the U.S.
Energy Department's National Renewable Energy Lab (NREL)
thermal systems group.
While Alcoa isn't among those supplying the soft alloy
extrusions for the supporting truss structures used in existing
solar installations, the company said its new take on parabolic
troughs eliminates the truss design by replacing it with a
cylindrical wingbox that is itself weight-bearing.
"Our hypothesis is that the market really needs to lower the
levelized cost of energy," Scott Kerns, vice president and
general manager of Alcoa's transportation products, said. "Cost
savings around energy are going to be a big deal in the U.S. as
well as the rest of the world. These CSP troughs are huge
production needs, and .?.?. we felt that we could lower the
overall cost by using aerospace and automotive technology in
But with aluminum's role in solar panel technology a new
development, analysts said they don't yet know how much of a
demand impact to expect.
"In terms of demand, we just started tracking the
alternative energy market this year. It started out as kind of
a niche market," Nick Adams, an Aluminum Association
statistician, said. "It has begun to expand, but we're still
waiting for first-quarter 2010 data."
Alcoa's testing has been partially subsidized by a
$2.1-million Energy Department grant, but government funding
alone won't guarantee any meaningful short-term impact on
demand, analysts said. "The government will eventually find
economic motives to continue building solar panels, but near
term there is no real effect. It's just a small section of
total demand in the market," CPM Group research analyst Doug
Investment in green technologies, which tends to be the
characteristic of low-growth, developed economies, also takes
time. "Any time you do a substitution in materials, it's a leap
step that doesn't happen overnight. Even over the next five
years, I don't know how much the global demand will change," he
Alcoa acknowledges that the transition will take time,
especially since testing must confirm that the new troughs meet
or exceed electricity output generated by existing CSP models
before the company can move forward with the next stage of
"Assuming the testing comes back positive and we continue to
work with the DOE, our target is to be positioned to be able to
commercialize the technology in the next two to three years,"
Kerns said. "As we look at demand and what's been announced
around CSP troughs, there are billions of dollars that will be
spent in the CSP marketplace. Without knowing the results of
the testing, however, it's hard for us to say what the
conversion rate is going to be."