“After 125 years, Alcoa looks beyond aluminum” – ETAuto.com, 29 June 2014

Alcoa was established in the US in 1888, and since then has become the third largest producer of aluminum in the world. The company has become a primary manufacturer for aerospace and automotive parts, recently striking a deal with jet engine parts manufacturer Firth Rixson to create parts that use nickel, titanium, and aluminum-lithium alloys, rather than primary aluminum. Alcoa’s diversification is the company’s attempt at dodging the current primary aluminum market, which is struggling with weak demand and overcapacity.

via Wall Street Journal

via Wall Street Journal

The company is slowly rebranding itself as a manufacturer of various lightweight metals. This past May, Alcoa opened a $100 million facility in Indiana that will manufacture nickel-based alloy engine parts. Alcoa is slated to invest $25 million in a Virginia-based facility that will also mostly generate nickel-based alloy jet engine blades. Alcoa’s expansion has helped their stock grow over 80 percent since last year.

Aluminum will never leave Alcoa, and its use is only becoming more important in the US. Obama’s 2010 mandate to double new-car average fuel economies by 2025 has forced large US car manufacturers, like GM and Ford, to opt for aluminum rather than steel. In the past, aluminum has been used in manufacturing wheels, engines, and hoods of cars, but now the US car industry is moving to all-aluminum bodied cars.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

July 2, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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“Alcoa, Novelis face new competition as aluminum gains in auto segment” – Automotive News, 19 June 2014

While it seems that Alcoa and Novelis have become the two major players in the automotive industry’s steel overhaul, other aluminum companies—Constellium NV, Aleris Corp., and Wise Metals Group—are also surfacing to become a part of the car industry’s shift to aluminum. Dutch-based aluminum manufacturer Constellium is breaking ground on a body sheet plant in the US, and Aleris and Wise Metals are thinking of doing the same. Constellium currently supplies to Volkswagen, while Aleris works with Audi and Mercedes.

Though there certainly will be competition among the aluminum companies, there seems to be more than enough work to go around. Fabricating aluminum car parts will likely grow into a $10 billion industry in the next ten years, with demand likely to grow 40 percent in that same time frame. While Novelis and Alcoa have already begun on production with US car companies, it will be a few years before competing aluminum companies begin production.

via Wall Street Journal

via Wall Street Journal

Car manufacturers have finally realized the benefits of all-aluminum bodied cars. Though an expensive investment, the lighter metal improves fuel efficiency, allows for cars to stop and start faster, and allows trucks to carry heavier objects. The major push came from Obama, when he mandated that new cars must double their fuel economies by 2025.

Alcoa has been ahead of the game for awhile. Fifteen years ago, the company invented A951, an invisible coating that creates stronger and sturdier bonds between aluminum parts. Alcoa patented the product, but was then asked by Ford to share the licensing with other aluminum companies. Car companies are working with different aluminum companies to supply parts, so as not to create a monopoly supplier. Alcoa gladly complied.

Related:
Aluminum Cars Take Heat from ArcelorMittal’s CEO
GM Secures Aluminum for Trucks
Will All-Aluminum Cars Drive Metals Industry?

Developed and Written by Dr. Subodh Das and Tara Mahadevan

July 2, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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“Will All-Aluminum Cars Drive Metals Industry?” – Wall Street Journal, 13 January 2014

Obama’s 2010 mandate that obligates car manufacturers to double new-car average fuel economy by 2025 has pushed the car industry to produce more fuel efficient cars at a faster rate. Ford’s next F-150 — the US’s largest selling vehicle — is currently being redesigned and rebuilt with an all-aluminum body, a huge helping hand to both Obama’s fuel efficiency mandate and the aluminum industry.

Two big players in the Ford’s aluminum round-up are Alcoa and Novelis, the nation’s top aluminum sheet producers. In 2013, both companies spent $1 billion in opening new aluminum sheet factories, tailored to the auto industry. Raw aluminum prices have dropped by more than a third since 2011 — Alcoa and Novelis are hoping their new investments increase their profit margins.

The aluminum industry is making a huge bet. While aluminum is lighter, and better for fuel efficiency and the economy, it might not be better for pocketbooks — aluminum costs almost three times more than steel, the traditional metal used to manufacture cars. Moreover, using aluminum to produce vehicles requires new machinery; machinery used to manufacture cars from steel isn’t compatible with aluminum.

Only Audi and Jaguar — cars that a majority of the public can’t afford — have created all-aluminum vehicles. Ford’s new endeavor will likely trim 700 pounds from the currently-5,000-pound truck; this reduction will allow for a 7% growth in the truck’s fuel economy.

The aluminum market is now only valued at almost $300 per year. If more car companies choose to manufacture all-aluminum cars, then the market can skyrocket to $7.5 billion by 2025, a huge blessing for the aluminum industry, which is undergoing oversupply and low raw aluminum price issues.

The car industry is urging every aluminum company to invest, asking different manufacturers to produce different parts so there isn’t one that could dominate pricing. There is more than enough business for everyone: one contract for a mass-produced part can be valued at more than $50 million.

The question is, will there be enough raw aluminum materials and fabrication capacities to successfully undertake this venture, even though time has come to further enhance recycling and production of recycle-friendly automotive aluminum alloys in commerce? See a publication on this subject by Dr. Das – “The Development of Recycle-Friendly Automotive Aluminum Alloys“.

See also:
A Clean Car Boom
GM Planning Strict Diet for New Pickup Trucks

Developed and Written by Dr. Subodh Das and Tara Mahadevan

January 13, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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