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Aluminum rolls right along

Keywords: Tags  aluminum, automotive, aerospace, beverage, Alcoa, Ford, General Motors, Anheuser-Busch Constellium

Like so many forms of progress, the rapid increase in aluminum technologies presents a good news/bad news scenario—it creates opportunities for more market share on the one hand, but risks upsetting supply-and-demand laws on the other.

For instance, the aluminum industry and aluminum extruders should see big benefits as cars and trucks use more of the light metal because of stricter fuel economy standards, according to Kevin Moore, president of Clarkston, Mich.-based All Raw Materials Consulting. But advances in mass-produced aluminum vehicles won’t come without significant risks, including potential overcapacity, an extremely tight scrap market, fierce competition from steel and fickle consumers.

The average amount of aluminum per vehicle should jump to between 550 and 650 pounds by 2025 from 364 pounds last year, Moore said. Aluminum sheet will see the lion’s share of that growth, but extrusions will benefit, too, he said, noting that North American vehicles are expected to each sport an average of 49 pounds of aluminum extrusions by 2025, up 81.5 percent from about 27 pounds last year. “That is a huge growth.”

“We really started to make (lightweighting) our market strategy, or public strategy, in the past couple of years,” Valley City, Ohio-based Shiloh Industries Inc. president and chief executive officer Ramzi Y. Hermiz said, noting that the company recently announced plans to spend nearly $8 million to expand two Indiana aluminum die-casting plants in an effort to support increased demand for advanced lightweighting technologies. The company also is working with Ford Motor Co. and General Motors Co. to develop future aluminum strategies. “We think it’s the right strategy. If you look at people like Jaguar, Land Rover and Range Rover—they’ve been all-aluminum for years,” he said.

Moreover, within aluminum applications, automakers have begun to seek ways to make existing components even lighter, Hermiz said. “We’re doing work with one OEM on a part that is already aluminum; it’s a casting ... but because of our unique technologies we are making an existing aluminum part even lighter.”

Hermiz said that Shiloh’s ThinTech process and squeeze casting process allows the company to do “some things a little bit different” in an effort to “look at parts and figure out how to make them even lighter.”

Dearborn, Mich.-based Ford’s F-150 pickup will sport an aluminum body in 2015, boosting the use of aluminum in that model to 1.3 billion pounds, while Detroit-based GM reportedly plans to increase the use of aluminum sheet in its pickup trucks by late 2018.

But it remains to be seen whether consumers will share the aluminum industry’s enthusiasm for aluminum pickup trucks, said Moore, a former executive at GM. “There has to be a perception ... that it’s as good as or better than steel.” 

Less immediate but also problematic is potential automotive aluminum overcapacity, Moore said, harking back to his experience at GM. Automakers “would announce a new program, and people would just fall over themselves. You’d get excess capacity, and then we’d be happy because we’d have lots of choices and we could drive the price down,” he said.

And aluminum, while lighter than steel, remains more expensive, with original equipment manufacturer (OEM) concerns about pricing exacerbated by negative publicity surrounding the London Metal Exchange contract and Midwest premiums, Moore said. “As an OEM, they are both pretty darn frustrating when it gets down to transparency,” he said.

One thing Moore isn’t worried about is the manufacturability of aluminum. The steel industry may “talk a lot” about the issue, but automakers are already used to handling aluminum, and new bonding technologies should further alleviate such concerns, he said.

Constrained capacity shouldn’t be a concern either, Moore said. “Major aluminum producers are chomping at the bit for this ‘holy grail’ opportunity and will ensure the capacity is there if needed,” he said, although he noted that there may be short-term constraints, especially in heat treating. And in addition to projects that have already been built or announced, there are rumors that Middle East aluminum producers are considering making automotive aluminum sheet and shipping it worldwide, while Japanese suppliers are said to be mulling sending auto aluminum sheet to Mexico, Moore said.

Still, such concerns haven’t prevented progress on a number of fronts, including automotive, aerospace, beverage cans and even basic production issues. 

The introduction of Ford’s aluminum-intensive pickup truck will be a “game changer” for both the automotive and aluminum industries, according to Novelis Inc., the world’s largest recycler of aluminum and a major producer of rolled products, including automotive sheet for the Ford F-150.

Novelis president and chief executive officer Philip Martens said his company is in talks with other automakers regarding the supply of aluminum for various applications, but declined to provide further details. The company is shifting its activities toward the auto sector in order to tap into this increased demand. “We’re going to do that globally,” he added.

Martens described the company’s shift toward production for the automotive industry as “very significant” and “more or less permanent,” adding that it had a minimum 15-year lifespan.

Another company, Constellium NV, has launched new aluminum high-strength crash-management system (CMS) technology designed to provide enhanced structural protection in collisions. The technology will enable the production of an aluminum CMS 15-percent lighter and 10-percent stronger than current aluminum systems, the Amsterdam-based company said.

A CMS is the structural module consisting of the bumper and related attachments that connect to the longitudinal beams of a vehicle. In recent years, automakers have aimed to use systems made from high-strength aluminum alloy rather than steel largely due to a global push toward lighter, more-fuel-efficient vehicles.

“As a leading supplier of automotive crash-management systems with both engineering and manufacturing capabilities in Europe, China and the United States, Constellium is continuously developing innovative technologies and products to further increase the use of aluminum extrusions in the automotive market,” Paul Warton, president of Constellium’s automotive structures and industry business unit, said in a statement.

By 2018, the company expects aluminum to capture about 20 percent of the CMS market in the United States and 30 percent in Europe. Combined aluminum CMS production in North America, Europe and China is expected to reach more than 28 million units by 2018, Constellium said.

GM has signed supply contracts with Alcoa Inc. and Novelis Inc. ahead of plans to increase the use of aluminum sheet in its next-generation pickup trucks by late 2018, according to the Wall Street Journal.

The move marks a major shift in the use of aluminum sheet in domestic automotive manufacturing and further bolsters the notion that lightweighting has become the single-most-important factor for automakers looking to meet federal fuel-efficiency standards.

A spokeswoman for Pittsburgh-based Alcoa declined to comment on any potential partnership with GM. “We don’t comment on who our customers are,” she said. However, “we’re clearly entering the era of the aluminum vehicle. Consumers are demanding fuel efficiency without compromising safety, and aluminum is the material of choice.”

The spokeswoman pointed to Alcoa’s multi-tiered expansion of its automotive sheet production capabilities, including a $300-million investment at the company’s Davenport, Iowa, facility, a $275-million investment at its plant in Alcoa, Tenn., and a $380-million investment at a production facility in Saudi Arabia.

Although automotive has been getting a lot of attention lately, it is not by any means the only sector to benefit from new aluminum technologies. In aerospace applications, aluminum producers continue to make advances, especially with low-density alloys.

Aircraft manufacturers continue to study the use of a number of advanced conventional aluminum alloys, as well as such low-density alloys as aluminum-lithium and aluminum-magnesium-scandium. New-generation low-density alloys offer specific properties in combination with cost-efficient manufacturing methods that make them highly desirable.

Going from the largest aluminum application to one of the smallest, a reclosable aluminum bottle has been unveiled by Alcoa and beverage maker Anheuser-Busch InBev SA.

The “Cool Twist” 16-ounce aluminum bottle designed exclusively for the Bud Light line is based on Alcoa’s patented bottle technology, uses Alcoa’s aluminum bottle sheet and carries the Alcoa logo on the package, the Pittsburgh-based aluminum producer said.

“Using our innovation, technology and full product support, Alcoa consistently partners with customers to help them bring differentiated products to the market,” Andrey Donets, president of Alcoa Global Packaging, said in a statement.

“We partnered with Alcoa to leverage their insights and skill to develop a package that combined both form and function, and we achieved that with the ‘Cool Twist’ bottle,” Pat McGauley, vice president of innovations at Anheuser-Busch, said in a statement. “Not only does the ‘Cool Twist’ bottle have a sleek, innovative design, but it feels colder.”

And Novelis Inc. announced at the Craft Brewers Conference in Denver in April that Red Hare Brewing Co. will launch the world’s first commercial use of Evercan, an independently certified, high-recycled-content aluminum sheet for beverage cans. The sheet has been certified by SCS Global Services, a leader in third-party environmental, sustainability and food quality certification, auditing, testing and standards development.

When combined with a can end made of a different alloy during the can-making process, the new Novelis Evercan will enable beverage companies to market drinks in standard 12-ounce aluminum cans certified to contain at least 70-percent recycled content. Novelis says it will continue to develop a high-recycled-content can that will enable a 100-percent recyclable can with up to 100-percent recycled content.

And the drive for new, more-efficient technology extends back into the early portions of the aluminum manufacturing process as well. Montreal-based Orbite Aluminae Inc. is working to build a high-purity alumina facility in Cap-Chat, Quebec, that will use aluminous clay, or “red mud,” as a feedstock. The company said it is working to convert a pilot high-purity alumina facility into a larger plant, although the expansion project has suffered delays.

Orbite Aluminae and Paris-based waste handler Veolia Environmental Services are looking to turn billions of tonnes of red mud rapidly filling up storage ponds into a commodity that could bolster companies’ profits. The two firms signed a collaborative agreement last year for the treatment and recycling of alumina production waste.

“Our unmatched presence in the waste value chain serves a long-term vision that drives us to build sustainable partnerships such as the one drawn up with Orbite,” Veolia senior executive vice president Pascal Decary said in announcing the partnership. “They are the key to best mining practices and guaranteeing supply that Veolia Environmental Services can bring to meet rising industry demand, which is a major environmental challenge.”

Orbite estimates that there are 3 billion tonnes of red mud—a caustic byproduct of traditional aluminum production—currently on the planet. That number could jump to 4 billion tonnes between 2015 and 2018, company president and chief executive officer Richard Boudreault said.

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