Producers, processors and providers of scrap have a dog in
the fight over whether steel or aluminum is the "material of
choice" for lightweighting vehicles, as well as how current
economic conditions might affect future scrap sales.
The steel and aluminum industries continue to debate the
transition to lightweight metals, with the focus drawn toward
fuel efficiency standards for cars, which the U.S.
Environmental Protection Agency (EPA) would like to average as
much as 62 miles per gallon (mpg) by 2025. Movement to
lightweighting will certainly have an impact on the scrap
"The days of looking solely at tailpipe emissions are over,"
Doug Rife, marketing manager at Nucor Corp., Charlotte, N.C.,
told delegates at AMM's Automotive Metals Conference
in Atlanta. "You've got to do lifecycle assessment. You have to
look at the process from cradle to grave."
Even with the lightweighting trend, the scrap industry is
going to have issues to contend with. Combining import growth,
15 percent less content and 2 to 3 percent lower domestic parts
production means that during "this coming decade the volume of
material made in North America to build an automobile will fall
by 20 percent compared with the prior decade," Dennis
DesRosiers, president of DesRosiers Automotive Consultants
Inc., Richmond Hill, Ontario, said at the Metals Service Center
Institute's Economic Forecast Summit in Chicago. "Have you
accepted lower demand and put that in your forecast?"
But he assured delegates that their world won't end. If
scrappage remains at an annual rate of 5 to 5.5 percent of the
280 million vehicles on the road in the United States, that
amounts to 14 million vehicles per year that need to be
replaced, while annual average growth of 0.8 to 0.9 percent in
the driving-age population in North America will generate
demand for another 1 million to 1.5 million vehicles.
As to the lightweighting issue, one of the keys to getting
there lies in mass reduction, which the steel industry has been
working to achieve for years. Larry Kavanagh, president of the
Steel Market Development Institute, a division of the American
Iron and Steel Institute, said that gains in the use of
advanced high-strength steels continue to aid lightweighting
efforts and thus improve fuel efficiency.
Randall Scheps, chairman of the Aluminum Transportation
Group and director of ground transportation at Pittsburgh-based
Alcoa Inc., said the best way to reduce vehicle weight and thus
reduce emissions is with the use of lighter-weight material,
principally aluminum in place of steel where possible.
A study by the University of Aachen in Germany showed that
the use of aluminum saves more weight in vehicles than the use
of high-strength steels-a 40-percent maximum reduction in a
vehicle body-in-white using aluminum vs. an 11-percent weight
reduction using high-strength steels, Scheps said. "We don't
think steel is the answer for saving the most weight."