PITTSBURGH U.S. Steel Corp. is pushing hard to replace mild steels with new high-strength steels as it fights to fend off competing materials in the automotive sector, the companys top executive said.
"We see these challenges from other materials as real, but believe that we have, and are still creating, steel solutions," U.S. Steel president and chief executive officer Mario Longhi said during an April 30 earnings conference call.
Longhi didnt name specific competing materials, but aluminum companies are gearing up for what they expect to be a big jump in demand for aluminum sheet as automakersaiming to boost fuel economyincreasingly substitute the light metal for steel (amm.com, April 9). Dearborn, Mich.-based Ford Motor Co., for example, plans to make an aluminum-bodied F-150 starting with the 2015 model year (amm.com, Jan. 13).
Among the Pittsburgh-based steelmakers weapons in the battle against alternative materials is the continuous annealing line at its Pro-Tec Coating Co. joint venture, Longhi said. The Leipsic, Ohio, facility in the past 12 months has begun making steel grades "that were conceptual in nature less than two years ago," Longhi said, noting that the coils used were produced at U.S. Steel facilities.
Third-generation high-strength steels, such as those being produced at Pro-Tec, offer automotive customers solutions to meet more-stringent fuel economy standards with steel, he said, noting that "this really attacks weight reduction in the near term, getting the plain carbon steels out and replacing them with more modern, safer, lighter steels."
While new steels are lighter, they remain more familiar to automotive users than other materials and continue to be formable, joinable and paintable, Longhi said, noting that they also are less expensive than other materials, especially when vehicle repair costs are taken into account.
While U.S. Steel is expanding the breadth of high-strength steels offered to the market, Longhi suggested that the effort might not have been the priority that it should have been in the past.
"It has been probably a lack of the proper amount of resources, and I think we are addressing that quite intently," he said, noting that the company is also creating a team to specifically target new technologies to bring to the market.
Longhi also brushed aside analysts concerns that U.S. Steel might be behind competing steelmakers. "I dont think we are second to anybody at this point in the development of these (next-generation) steels," he said after analysts asked whether U.S. Steel might be concerned about offerings from AM/NS Calvert, the Calvert, Ala.-based joint venture between Luxembourg-based ArcelorMittal SA and Japans Nippon Steel & Sumitomo Metal Corp.
U.S. Steels coated shipments to the automotive industry had been hurt by the companys production problems and not by inroads made by aluminum, Longhi said during the conference call.