December 15, 2015 / 6:34 PM / 3 years ago

Ford adds aluminum-intensive truck brand, Novelis a supplier

NEW YORK (Reuters) - Ford Motor Co (F.N) plans to launch a second line of aluminum-intensive trucks and Novelis Inc [NVLX.UL] will supply the high-strength aluminum, Novelis said on Tuesday.

The logo and hood ornament of a 1915 Ford Model T is seen after it arrived from Detroit at the Palace of Fine Arts in San Francisco, California August 19, 2015. REUTERS/Robert Galbraith -

Novelis said it expects to begin shipping product from its Oswego, New York, plant for the F-Series Super Duty truck line in spring 2016. Ford’s first aluminum-body truck, the 2015 F-150, was launched in December 2014.

The trucks will go on sale late next year, a Ford spokesman said, adding that Alcoa Inc (AA.N), which supplies the F-150 along with Novelis, will also be a supplier for the Super Duty trucks.

Automakers have been looking for lighter aluminum alloys to replace high-strength steel, which is far heavier. Lighter aluminum alloys would enable them to build vehicles that burn less fuel but meet safety standards.

Growing aluminum demand from car manufacturers is one of the few bright spots in a severely oversupplied market. The Super Duty series is the first major vehicle to announce it is becoming aluminum-intensive since the F-150 announcement last year.

The move may restore positive sentiment on automotive demand for aluminum after an absence of new plans for aluminum-intensive vehicles following the F-150’s shift.

Novelis plans to use “what we learned from the massive success of the game-changing 2015 Ford F-150” in working on the F-Series, Novelis North America President Marco Palmieri said in a statement.

The move comes a month after Novelis raised concerns about U.S. automotive aluminum demand, with Chief Executive Steve Fisher saying the industry was going through a “digestion period” following Ford’s F-150 announcement.

He said plants were shifting capacity to automotive purposes, and away from other applications, at a slower rate than anticipated.

Novelis, owned by Indian conglomerate Aditya Birla Group, is in the process of constructing its third automotive sheet finishing line at Oswego to supply the F-Series, which will be the second-highest volume aluminum automobile after the F-150.

The use of aluminum in the F-Series will reduce the trucks’ weight by 350 pounds (159 kg), compared with a 700 pound (318 kg)-reduction for the F-150.

The news comes as exports from top-producer China have pressured London Metal Exchange (LME) prices CMAL3 to 6-1/2 year lows, prompting curtailments at U.S. primary aluminum smelters.

The U.S. Midwest premium paid on top of LME prices for physical delivery AL-PREM has also tumbled by two-thirds this year, though it has increased slightly and stabilized around 8.75 cents a lb on news of the smelter closures.

Editing by Matthew Lewis

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