Alcoa and Novelis steel for next test in aluminum auto race

Thu Jun 19, 2014 1:04am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Allison Martell and Josephine Mason

(Reuters) - Aluminum giants Alcoa Inc and Novelis Inc spent decades wooing Detroit's automakers to toss out their heavy steel vehicle bodies and overhaul their factories in order to mass produce vehicles made out of lighter aluminum.

This year, with Ford Motor Co's launch of its new aluminum-intensive F-150 truck, they are finally reaping the benefits of that long campaign, a once-a-generation shift in demand for an industry struggling with weak metal demand.

Their triumphant moment is being marred, however. A handful of up-and-coming rivals are riding their coattails into an industry that could be worth $10 billion in a decade.

Since Ford unveiled the truck's new design, Constellium NV has announced plans to build a U.S. body sheet plant while Aleris Corp and Wise Metals Group are considering a foray into the burgeoning U.S. sheet market.

To ensure there is a market for their metal, companies are coordinating with automakers, although in most cases their identities have not yet been disclosed.

"Novelis and Alcoa are clearly long-term strong players. We believe there is room for (more) players," Steven Demetriou, chief executive officer and chairman of Aleris said in an interview.

"We're one of the top players in Europe in automotive rolled products. We're looking to duplicate that in the United States."

Novelis and Alcoa say they are not worried about competition, given how much automotive sheet is needed. It will be several years before rivals start production, and demand may grow by 40 percent over the next decade.   Continued...

 
The Great Smoky Mountains are shown in the background in this view of the Alcoa Aluminum plant in Alcoa, Tennessee April 8, 2014.  REUTERS/Wade Payne