Boston, MA 09/25/2014 (wallstreetpr) – The steel plant of ArcelorMittal SA (ADR) (NYSE:MT) located in rural area of Alabama is keenly looking forward to the response of Big Steel for aluminium; given the riding interest by carmakers. This year, the aluminium sector took pace with the announcement of Ford Motor Company (NYSE:F)’s mostly-aluminium new F-150 model. Despite being costlier, aluminium is the preferred choice for Ford for its F-150 model because it is lighter and thus, also complies with the fuel efficiency standards.
Auto industry and Aluminium Association
Recently, a unit of Hindalco Industries of India, Novelis, along with Alcoa Inc (NYSE:AA) proclaimed that their investments summed up to over a billion dollar in Tennessee, New York and at other overseas locations. And, according to the Ducker Worldwide report published recently, it is expected that by 2025, approximately 18% of the vehicles will be flaunting all-aluminium body. In 2014, this was below 1%.
Meanwhile, the steelmakers are trying to give back a tough fight by way of expenses of huge amounts, just to not face a defeat at the hands of aluminium. Earlier, in 1970s, steelmakers had to face similar consequences after having lost to aluminium for the beer cans.
Steel v/s. Aluminium
At ArcelorMittal, the engineers opine that around half of the overall production is meant for the car industry solely. This accounts for 4.5 million tons annually. The rest of the amount is destined for construction and gas drilling.
The Director of ArcelorMittal SA (ADR) (NYSE:MT)’s automotive product applications unit, Blake Zuidema says that the steel is not a preferred choice among the hi-tech industry now. But, he also indicates the increasing mastery of this industry into chemical alloys, surface shape and temperature manipulation, as the answer to aluminium.
Special procedures, which allow ArcelorMittal SA (ADR) (NYSE:MT) to prepare specialized steel, will enable the industry to bounce back in the auto industry. ArcelorMittal says that technologies like special cooling or re-heating and thereafter coating the steel in aluminium silicon will enable the automakers to bring down the weight of pick-up trucks. This will reduce the weight by 384 pounds, which is exactly what remains the counter to Ford’s aluminium F-150 truck.
