new vehicle fuel-efficiency targets in the United States and
Europe are likely to lead to lower sales volumes for steel
companies, Fitch Ratings Ltd. said.
Higher prices for
lighter, stronger steels should benefit well-funded producers
that have the resources to invest in product development
compared with companies that make less-sophisticated
components, such as heavier structural parts, the ratings
Steelmakers will have
to make lighter products without compromising strength or
safety in the face of competition from aluminum, magnesium or
ArcelorMittal SA has
indicated that components made from its third-generation
advanced high-strength steels will be up to 27 percent lighter
than those made using current grades while retaining similar
A weight reduction of
this magnitude implies a similar fall in steel volumes consumed
by the auto industry, Fitch said. "We expect companies such as
ArcelorMittal or South Koreas Posco to be relative
beneficiaries of the changes because they have the financial
resources to invest in new product development and have close
global partnerships with auto manufacturers."
A version of this article was first published by AMM sister
publication Steel First.