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U.S. Carmakers’ Aluminum Usage Seen by Novelis Outpacing Europe

U.S. carmakers’ consumption of aluminum may surpass European counterparts in the next 12 months as new models using the metal come to market, according to Novelis Inc.

Ford Motor Co. is among manufacturers rolling out new cars that substitute aluminum for heavier steel. Use of the lightweight metal in vehicles is rising about 5 percent a year, according to Barclays Plc. Making car bodies consumes about 350,000 metric tons of aluminum sheet a year, of which Atlanta-based Novelis produces 250,000 tons, according to Erwin Mayr, president of Novelis Europe.

U.S. vehicles are incorporating more aluminum because of Corporate Average Fuel Economy standards that limit fuel usage and consumer demand for cars that are more economic and cause less pollution, Mayr said in an interview. European manufacturers including Volkswagen AG’s Audi unit and Daimler AG were leaders in the past five years, he said.

“Now the trend is being completely taken over by the big carmakers in North America,” Mayr said in Geneva on Sept. 18. “Americans tend to drive big cars, so they need to make them lighter. You need a lot of aluminum.”

Ford’s F-150 truck, containing more than 1,000 pounds of the metal, may raise the average content in vehicles to 650 pounds, according to Bloomberg Industries estimates. Aluminum usage per car will average 160 kilograms (352 pounds) by 2020, against 140 kilograms last year, according to slides in a presentation last week by Werner Stelzer, a former executive at Canadian producer Alcan who is an auto and aluminum consultant.

Aluminum Frame

Chevrolet’s 2014 Corvette Stingray has a frame made entirely of aluminum, according to the website of the unit of Detroit-based General Motors Co.

The U.S. government is requiring carmakers to achieve a fleetwide fuel-economy average for light-duty vehicles of 35.5 miles a gallon of gasoline by the 2016 model year and 54.5 miles a gallon by 2025. Average prices for regular gasoline gained 5.1 percent in the U.S. this year, according to American Automobile Association data on Bloomberg.

Global vehicle sales will rise 2.7 percent to a record 83.2 million units this year and another 4.7 percent to 87.1 million in 2014, according to LMC Automotive, a research company based in Oxford, England. Car and light-truck sales in the U.S. advanced 17 percent in August to the highest since May 2007, according to Autodata Corp.

Novelis still expects global carmakers’ aluminum demand to gain at a combined annual rate of 25 percent over the next five to eight years, Mayr said. Transportation accounts for about 42 percent of the metal’s use in mature economies, according to Moscow-based United Co. Rusal, the world’s largest producer.

Hindalco Subsidiary

Novelis, which buys about 3 million tons of aluminum annually, counts Ford, Audi and the Jaguar Land Rover division of Tata Motors Ltd. as customers, according to its website. The U.S. company is a unit of Hindalco Industries Ltd. (HNDL), India’s largest producer of the metal.

Aluminum for delivery in three months fell 13 percent this year to $1,802 a ton on the London Metal Exchange. Prices are headed for a second annual retreat in three amid prospects for a surplus of the metal in 2013 estimated at 600,000 tons by researcher Wood Mackenzie Ltd.

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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