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Thursday, November 22, 2007

Some sectors seek growth beyond casting alloys - Automotive

With aluminum capturing more and more of the North American automotive market every year on a unit-content basis, it is hard to imagine the existence of many unsatisfied people in the aluminum industry. Such people do exist, however--quite a few of them, in fact--because the principal growth segment of their business in the auto sector continues to involve castings, and they'd like to see the same kind of growth for stamping, extruding and forging alloys.

Those three classes of alloys gain a little in the auto market almost every year, but not nearly as much as casting alloys do, and more applications than the aluminum industry would like for the three are term-limited. That is, some are temporary applications representing spot remedies for overweight conditions in a line of vehicles, and tend to last only until the auto engineers can figure out a way to get the original, heavier material back into use. That's usually because the original material is less expensive.

Often, the aluminum component stays as it is until the vehicle is redesigned, which means it may have a life of five, six or seven years. Understandably, the aluminum industry wants the redesigned vehicles to employ its material in the same stamping, extrusion or forging, and in some new applications, as well.

It looks as though the typical North American-built family vehicle in 2002 will have almost 5 percent more aluminum in finished parts applications than it did in 2001, and that would represent a gain of 12 or 13 pounds per vehicle. The majority of the new uses will involve castings, however, including engine blocks, heads, suspension system control arms, and other parts that are medium or large in size and produced in substantial volumes. Most employ casting alloys A380, A319 or A356.

Because of the recessed condition of the market for new cars and light-duty trucks, the aluminum industry as a whole is not getting a lot of enjoyment out of its business with the auto sector this year. However, the suppliers of specification alloys for die casting, lost foam, low pressure and gravity semipermanent mold casting are enjoying it more than others. Some smelters are doing better than others in their highly competitive industry, but just about all of them are pleased by the fact that applications for the three alloys mentioned above, especially, are increasing.

Engine blocks, heads, wheels, control arms, axle housings, crossmembers and the like are big enough to provide the auto engineers with significant weight-savings when aluminum is specified in place of iron or steel, and when those components are made in aluminum, they are usually made as castings. Now and then, big auto parts are forged or extruded--also with significant weight-saving benefits--but usually the forming technique chosen is casting.

Engines continue to represent the single biggest growth application for aluminum, and that will continue to be the case for awhile, the auto engineers say Millions of engines are still being built with iron blocks--and some have iron heads, also--every year, and when these components are converted to aluminum, they are going to stay converted for a long time--i.e., for 10 or 20 years. These conversions are not spot remedies, but tend to last as long as the engines last, even through modifications and design alterations.

Between 5 million and 6 million more all-aluminum engines per year are expected to be in production in North America by 2006 than were being built at the end of last year. Those additional aluminum-block/aluminum-head engines will provide an estimated 700 million pounds or so, net, of new aluminum applications annually. When those engines are in circulation, there still will be some engines with iron blocks and/or heads being built by the automakers in the United States, Canada and Mexico.

It is an entirely different story, however, for aluminum sheet, extrusion and forging alloys, such as hoods, deck lids, fenders, liftgates, bumper beams, structural components, radiator parts and knuckles. New applications for these materials by 2006 are expected to amount to only a fraction of those for casting alloys. The near-term picture, therefore, is not a lot different-- or brighter--than it has been in the past 12 years or so.

Many aluminum industry executives want badly to see things change, and there are a few scenarios for the longer term that might satisfy their wishes. One of these has to do with creative component designs, with the aluminum companies doing the design work and promoting the applications to the automakers. It costs money to do this, and the aluminum producers historically have not been as willing as the steel and plastic industries to spend their money on such projects. However, two of the world's biggest firms, Alcoa Inc., Pittsburgh, and Alcan Aluminium Ltd., are expected to do more and more creative development/selling work of this kind, and probably will be followed by others.

It will take a few years for this to pay off in noteworthy ways. Alcoa went to considerable lengths in the summer (AMM, Aug. 13) to explain how this approach could pay off for the automakers, themselves, who are constantly seeking ways to differentiate their products from those of their competitors.