As a romantic image, its hard to beat the all-steel
car vs. the all-aluminum car, side by side, engines roaring,
poised to race for the future of automobile manufacturing. But
look under the hoods, and youll find both of those
roaring engine blocks are made of cast aluminum. That is the
real story. The rivalry between steel and aluminum in the auto
sector is mostly a myth.
Cast aluminum has effectively taken over from cast ferrous
materials in almost all automotive applications. In the next
few years, it is expected that high-strength steels and rolled
aluminum will replace most mild steels in the rest of the car.
Increasingly, engineers are selecting freely between aluminum
and high-strength steel part by part in the chassis. The
challenge is not to box out the other material, but to work
with fabricators and automakers to enable the supply chain and
assembly process to work smoothly with both metals.
To underscore those trends, Pittsburgh-based Alcoa Inc.
recently broke ground at its Davenport, Iowa, complex on a
$300-million expansion of rolling capacity, as well as the
first commercial operation of its 951 bonding technology. The
company said that most of the new capacity is already secured
into the automotive sector, while the bonding technology will
be licensed to original equipment manufacturers (OEMs) and
their key suppliers.
Novelis Inc. will be the next aluminum maker with a major
expansion. The company makes automotive sheet in Germany and at
a mill in Ontario. The Canadian plant has been upgraded
recently and expanded by 25 percent to 50,000 tonnes per year.
Novelis is raising the ante considerably, with plans for a
$200-million, 200,000-tonne-per-year mill for automotive grades
in Oswego, N.Y. Construction is already under way, and limited
production will begin in 2013, with full production expected to
come online the following year.
The 300-percent increase in capacity at Oswego is indicative
of how Novelis views long-term growth of demand in the regional
vehicle sector, said Brad Soultz, vice president of global
specialty products and general manager for automotive in North
America for Novelis. Current imports of about 40,000 tonnes a
year will be scaled back, but there are no significant plans
for exports from the new mill. Other than occasional balancing,
Novelis plans for each region to meet its own needs.
Recycled material also will figure largely into the mix at
the new mill. Soultz said scrap currently provides about 15
percent of the input across the entire company worldwide, but
that will rise to 50 percent by 2015 and 80 percent by
We are looking at the multiple substrate
solution, Soultz said. It is fairly safe to
characterize the North American market as following Europe in
that respect. First we are seeing closures, such as hoods,
decks and doors, moving to aluminum, then components of the
body-in-white (the assembled chassis or frame without closures,
drivetrain or trim).
Novelis, spun off from Alcan Inc. in 2005 and now privately
held after a few years of being publicly traded, claims 65
percent of the global automotive sheet and body-in-white market
for aluminum, according to its own analysis. The company
operates the worlds largest rolling mill at Norf,
Germany, as a joint venture; the largest continuous caster in
the world at its Saguenay Works in Jonquiere, Quebec; and a
1-billion-pound hot mill at Oswego.
Downstream, Novelis is not seeing much variation in volume
or type for new-technology vehicles. The company is working on
some new applications for battery packs and for heat transfer,
Soultz said, but broadly any driveline benefits from a
lighter vehicle, whether the powertrain is gasoline, diesel or
any of the alternatives coming into
It is well known that steel has lost a few pounds per
vehicle in each design cycle for many years. But steel mills
and industry analysts note that the whole vehicle is lighter
each time as well, and that on a percentage basis steel has
seen only incremental decreases. One analyst said the
foreboding that some mills hold for the auto sector is a gloom
they bring upon themselves, arising from the congenital
obsession with tonnage rather than profitability.
There are at least two big steel companies well known for
their more pragmatic approach to the auto sector. ArcelorMittal
SA has been carrying the flag with its S-in motion initiative
(2011 winner of AMMs Best Process Innovation
award), demonstrating steel applications from bumper to bumper.
Severstal North America Inc. was among the first to get on
board the multi-metal idea for vehicle components, actively
working with automakers and their Tier 1 suppliers not just on
parts but on material handling and supply-chain solutions. In
all cases, the focus is on high-strength steels and beyond,
which early adopters see as a competitive advantage.
Not all steel companies can make the more-advanced
high-strength steel grades and make them well, said
Robert DiCianni, marketing manager for ArcelorMittal USA.
This new market will reduce the number of available
suppliers. There will be less commodity steel used in future
vehicles, which will be a disadvantage for some current
suppliers. The companies that are lagging behind today will try
to catch up over the next several years, and the companies who
are leading today, including ArcelorMittal, will work to
maintain their lead and try to move into even more exotic steel
The brave new world applies to processors as well, DiCianni
said. The companies today who are processing steel, such
as slitting and blanking, will also have to become more
sophisticated, and the Tier 1 suppliers who make parts such as
door beams, bumper beams or seats also will have to become more
advanced. Those who do not make these changes will be left
While steel mills are investing in research and development,
the biggest challenge they see in the auto sector is not in
metallurgy but in the tonnage mentality both for mills and for
fabricators. DiCiannis belief is that steel suppliers
must continue to upgrade their capabilities and for processors
and parts makers to do the same.
That naturally implies investments in new equipment,
which means higher costs through the supply chain, he
said. Auto production is a very complex topic, and it is
not easy to generalize. But we have done studies that show auto
companies can use (advanced) high-strength steels without a
significant cost penalty and, in many cases, there is a cost
benefit. Even though the steel they are buying is more
expensive on a per-ton basis, they use less of it, which
results in the potential for a cost benefit.
It helps that the outlook for retail sales includes rising
prices, but only if the automakers can make a convincing case
for value, not price. For consumers, we are definitely
looking at more expensive vehicles, DiCianni said.
The problem is that consumers are not willing to pay for
things they dont value. They value safety, comfort and
features, and they are willing to pay for those things. The
majority of consumers will not value better fuel economy if the
price of gas is not high. Market supply and demand have managed
to maintain relatively low gas prices in this country and
probably will continue to do so.
In all of this, the market drivers are inherent trends
across all mainstream vehicle types. For all the attention that
alternative-fuel cars are getting, they remain a niche market
from the manufacturing perspective. ArcelorMittal cites JD
Power & Associates Inc., IHS Global Insight Inc. and almost
all automotive forecasters as calling for about a 2-percent
market share for hybrid and electric carsand no more than
3 percentby 2020.
We are at about 2 percent now, DiCianni said,
which basically means no growth on a percentage basis.
The only thing that will make this market grow is significantly
higher gas prices; $4 a gallon is not enough to make this
market grow faster. Fuel-cell vehicles are well over the
horizon. We are not going to see fuel cells before 2020 or
Rather than exotic materials and alternative powertrains,
the challenge is optimizing performance for each component,
then translating that design specification back through the
supply chain. Car companies are selecting the best metal
for each application, said Jim Mortensen, general manager
for automotive sales at Severstal NA. There are a lot of
steep challenges for automakersfuel economy, crush
parameters, safety standardsall on top of their own
considerations for improvements and competitiveness.
Severstal is a major supplier of high-strength steels,
advanced high-strength steels and on into ultra-high-strength
steels. We consider the whole body of the car,
Mortensen said. When we develop new grades and new
rolling capabilities, we are not just looking for higher
strength but also higher ductility. It has to balance to fit
into the designs of the manufacturers.
In another iteration of the value proposition, there has to
be a sound economical argument for the mill. Part of the
reason automakers have not used new materials over the past few
years is that the grades are not commercially available. The
fabricators have to believe a commercial supply will be
available before they specify a metal, but the mills have to
believe that there will be demand before they commit to
production, Mortensen said. We work as closely as
we can with the original equipment manufacturers, but typically
it is very difficult for them to agree to purchase a particular
material far into the future.
That conundrum means that mills have to design their plants
with as much flexibility as possible. That does incur extra
costs, but in effect it is a form of hedging. Since 2007,
Severstal has invested $1.4 billion in its Dearborn, Mich.,
complex. Not all of the output from that facility goes into
automaking, but a large portion does. Mortensen said further
investments in ultra-high-strength steels, both coated and
uncoated, are being evaluated, but he could not disclose any
In contrast to the challenges that steelmakers have in
matching new grades to demand, aluminum mills say that grades
on the market today are the ones that will carry through for
years or decades. The focus is more on applications than on
metallurgy. For the past 30 years, about 80 percent of
the aluminum in cars has been castingssuspension,
cylinder blocks, transmissions, said Doug Richman, vice
president of engineering and technology at Foothill Ranch,
Calif.-based Kaiser Aluminum Corp. and technology chairman of
the Aluminum Associations Aluminum Transportation
In terms of pounds on the vehicle, cast has been the
story, Richman said. But those applications are
reaching saturation. From here on out, that disposition changes
radically. The main growth will be body and closures from now
to 2020. That is the next frontier, and we are aggressively
pursuing it, from closure panels to the whole body-in-white, in
wrought sheet and extruded aluminum.
Richman cited a recent Ducker Worldwide LLC study that found
the 343 pounds of aluminum on an average car today will rise
some 60 percent to 550 pounds by 2025. That said, he believes
the growing market is big enough for both aluminum and steel.
We are looking at a 200-pound-per-car gain, but we also
know that many applications will be multi-metal. That is the
emerging concept, he said. Up to now, the idea has
been the monolithic steel or aluminum car. But there are more
than 100 individual components to a body-in-white, and the OEMs
are making their decisions part by part (for) what metal is
best for each component.
As with any optimization, focusing on performance in any one
areathe finished vehicleimposes suboptimal
conditions on other areas, such as material handling and
assembly. Steel components often are moved by magnetnot
an option for aluminum parts. Steel and aluminum parts can be
spot-welded to other like parts, but not to each other.
Requirements for bond-fastening also differ.
There are a limited number of OEMs who have experience
with these mixed metals, Richman said. The Audi A8
series is known as an aluminum car, but it is actually
multi-metalnot just aluminum, but high-strength steels
and magnesium. There are very significant handling and assembly
issues, but they can be overcome. Like all change, some will
resist and some will be early adopters. In the long run, some
will make it and some will not.
Strategically, even an aluminum guy like Richman is quick to
acknowledge that there will be steel in cars forever. And
there is going to be a lot of steel in the industry for a very
long time. Aluminum is new in many applications. One thing the
Tier 1s and OEMs know, however, is that there is not going to
be any shortage of capacity in aluminum for the auto market.
The design process is a multi-year cycle. We can add capacity
faster than the car makers can move from concept to
As a former executive at General Motors Co., Richman has
worked both sides of the supply chain. For the past 30
years, there has been uninterrupted growth in aluminum, at a
rate of 7 pounds per car per year. And that rate is actually
lower than what Ducker is projecting from now to
For all the gains in aluminum, there is still more
steel in the vehicle than anything else, said Dick
Schultz, managing director at Ducker, and there still
will be, for the rest of my lifetime at least. Currently,
cars are 56 percent steel, according to Ducker, of which 26
percent is mild, 13 percent is high-strength steel, 2 percent
is advanced high-strength steel and 15 percent is all others,
primarily rod and bar.
By 2015, the total will have slipped just two points to 54
percent, but the divisions will be very different: 17 percent
mild, 14 percent high-strength steel, 7 percent advanced
high-strength steel and 16 percent long products. Mild
steel is coming down, mostly to be replaced by aluminum,
Schultz said. Advanced high-strength steel is growing the
most, with some gains in high-strength steel as well.
While the components are being shuffled, Schultz stressed
that steel is fighting the good fight, and some mills are
doing a great job. Steel has actually been very successful in
holding off aluminum for several product cycles.
On the aluminum side, he said, just two producersAlcoa
and Noveliswill have more than quadrupled their auto-body
sheet capacity in North America by the end of 2014. Thats
a testament to the growth in that sector, Schultz said, but
we will definitely see some new players. The OEMs are not
comfortable with just two suppliers.
Other segments of the value chain have opinions, too,
according to Charles Bradford, president of New York-based
Bradford Research Inc. The beauty of steel closures is
that body shops are more capable of repairing them, he
said. There is also the advantage steel parts have in
handling. Magnets have proven to be extremely efficient, and
many assembly plants are set up for that.
That said, Bradford notes there are other applications in
which aluminum has gained some traction. One is in wheels.
There are a lot of pounds in wheels, and aluminum in that
application is a huge winner. Another potential big
opportunity is in the electrical system. That is almost
all still copper, he said. I would really like to
see aluminum wiring. That would require different grades,
because most of the aluminum in automobiles is secondary, which
is not electrically pure, Bradford said. Most sheet is primary,
but with the increasing emphasis on scrap inputs to sheet
mills, that too may be changing.
Highly technical grades also are an area of focus on the
steel side. DiCianni said that the raw materials used in
advanced high-strength steel will see higher levels of demand.
A good example would be something like molybdenum. In the early
part of the last decade, moly was selling for less than $5 a
pound. Over the last several years, its been in the range
of $30 to $35 a pound. All raw materials have increased over
the last decade, but this is a bigger increase on a percentage
basis than what we have seen in general for steelmaking raw
Blake Zuidema, director of automotive product applications
at ArcelorMittal, said that significant gains are still
possible for advanced high-strength steels in both strength and
formability. We are really pressing the curve out higher
and to the right, he said. Through our S-in motion
program, we have gotten to learn what each part of the car
wants to be. Now we are working on new chemistries, new
properties and new microstructures, and in parallel working on
the processes to make those advances commercial. The first
course is always to retrofit existing equipment, but where
there are compelling opportunities, and if manufacturing
requires a different process, then at least we are engineering
those process solutions.
As steel seeks greater strength and ductility,
ferrocolumbium will continue to figure into the mix, especially
for the cage, roof side rails, center pillars and
floor sills. Brazilian firm Cia. Brasileira de Metalurgia e
Mineraçãos Reference Metals Co. supplies
three-quarters of the worlds ferrocolumbium, mostly out
Standard grades run from 350 (megapascals) to 1,100
MPa, said Steven Jansto, market development manager at
CBMM-Reference Metals. We are working in areas up to
1,500 MPa, but most of the tonnage is in the lower
gradesthe 350s, 590s and 690s. Ferrocolumbium is a
growth market, he said, but it is still recovering from the
recession. Shipments are still only 75 to 80 percent of
In the long run, all of the changes in steel and aluminum
supply to the auto sector will have a rich dividend, Schultz
said. North America will have the most fuel-efficient
vehicles in the world. That will benefit some suppliers, and
ultimately will cultivate a stronger export market for vehicles
from this region.