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April 2014
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Aluminum vs. Steel:
Coming to Grips with the New Automotive Materials

The pace of change in automotive materials promises to challenge processors as they prepare to tackle aluminum and the new grades of advanced high-strength steel.

By Myra Pinkham, Contributing Editor

Motivated by a doubling in government fuel efficiency requirements in the next decade, automotive manufacturers are converting parts to such lighter weight materials as advanced high-strength steels and aluminum at a rapid pace. This begs the question of what auto-related toll processors need to do to get ready for this influx of new materials.

Domestic automakers are facing a monumental task to raise the average fuel efficiency of their vehicles to 54.5 miles per gallon by 2025 from about 29 mpg today. To meet that new government standard calls for a 4-5 percent improvement each year, says Ronald Krupitzer, vice president of automotive applications for the American Iron and Steel Institute’s Steel Market Development Institute in Washington.

While 2025 seems like a long ways off, the steel industry feels a great sense of urgency to get new high-strength steel products to market. Factoring in the time it takes to develop and commercialize each new grade, and the time it takes carmakers to design and develop each new vehicle, the deadline is around 2018, says Krupitzer. "The government has a midyear review in 2018 and that could change the target. But if it stays the same, we are in a rush to develop better steel grades. They have to be ready to use by 2018 if they are going to influence the vehicles made in 2025. That is the pressure we are under."
 
SMDI, a coalition of leading steelmakers, contends that automakers can cut vehicle weight by 25 percent and meet their fuel efficiency goals just by using existing and new "third generation” advanced high-strength steels now in development, in combination with new engine and transmission technologies. "The lowest cost for weight reduction really comes from extensive use of advanced high-strength steels. We think that makes the best business case. The question is whether the car companies will panic and use aluminum when they don’t have to and pay more money than they should for this weight reduction," Krupitzer says.

"Increases in fuel efficiency can be achieved by better engines and transmissions, but that will only get automakers halfway to meeting the new standard. They need to lighten the weight of their vehicles," says Lloyd O'Carroll, senior analyst for Cleveland-based Northcoast Research. How they will choose to do that remains uncertain, but suppliers of aluminum, advanced high-strength steels and, to a lesser degree composites and magnesium, are all vying for a bigger bite of the materials pie. Though aluminum is inherently lighter, its costs three to five times more than steel. Thus the industry's challenge is not just to make vehicles lighter, but to make them lighter at the lowest cost.

"Automakers will be using the best materials for the best applications to take every gram out of their vehicles that they can," says Randall Scheps, marketing director for Alcoa Inc.'s automotive sheet group.
To lighten future vehicles without compromising safety, designers of cars and light trucks will use a mixture of materials, most of them replacing parts originally made of conventional mild steel, says Jay Baron, president of the Center for Automotive Research in Ann Arbor, Mich.

It was with this goal in mind two years ago that CAR formed the Coalition of Automotive Lightweight Materials, an independent coalition that strives to be objective about which alternatives offer the most promise. Meanwhile, other trade groups remain quite vocal in promoting the lightweighting potential of their specific products.

Steel is a unique engineering material with a wide range of properties that can be tailored to meet the needs of individual body structure components, says Blake Zuidema, director of automotive product applications for ArcelorMittal Global Research and Development. "It can provide extremely high strength for intrusion protection in passenger car components, high absorption of crash energies in front and rear sections of the automobile, and high formability to make the complex shapes required by stylists for outer body panels," he says. Steel has the added advantage of being compatible with the auto industry's existing manufacturing infrastructure. "Unlike other competing materials, automakers do not need to make massive investments in manufacturing and assembly plants to implement the lightweighting advantages of today’s advanced steel grades," he adds.

Advanced high-strength steels are now present in nearly every vehicle on the road. Several models use them more extensively, however, including the Cadillac ATS, the Dodge Dart, the Ford Focus, the Ford Fiesta, and the Chrysler Ram and GM Silverado pickup trucks. Other new products to be introduced in 2016 and beyond will take the use of AHSS even further.

In fact, Craig Parsons, president of automotive at NanoSteel Co. Inc., Providence, R.I., says his company has material now in production trials that fits into that "sweet spot" of third generation AHSS--strong yet still formable. The trials will last anywhere from three to 12 months.

Not everyone sees advanced high-strength steel as the answer, however. Some experts say AHSS will help, but it won't take automakers as far as they need to go. "Based on our current understanding, we believe we're approaching the practical limits of the application of high-strength steels," says Frank Paluch, senior vice president of Honda Research & Development Americas.

Not true, argues Krupitzer at SMDI. While steel will eventually reach its lightweighting limit, it still has much more to offer. At current tensile strengths of 590-780 megapascals, AHSS is only half way to its potential of 1,200 megapascals or more.

But, as aluminum makers are quick to point out, the highest-strength steels are still on the drawing board. "If Ford would have been able to save the weight it is saving with its 2015 F-150 pickup truck (about 700 pounds) using steel, they would have done so," says Alcoa's Scheps. Instead, the auto maker gained a lot of notoriety by making the F-150 one of the first with exterior aluminum body panels. "The F-150 is just the tip of the iceberg," Scheps adds. "Our conversations with other automakers indicate they also have plans to convert some of the steel they use to aluminum. I expect there will some announcements shortly related to other high volume, mass market vehicles."

For one, General Motors reportedly has signed contracts with aluminum producers to supply material for its next generation of pickup trucks due out in late 2018.

Prior to the F-150, much of the shift to aluminum was in smaller luxury cars with high price tags that could more easily absorb the additional cost. The same economics holds true for large vehicles such as pickup trucks and sport utility vehicles, says Christopher Plummer, managing director of Metal Strategies Inc., West Chester, Pa.

Timothy Hayes, principal of Lawrence Capital Management, says the conversion of other pickup trucks and SUVs to aluminum could result in a jump in aluminum demand similar to what happened in the mid-1960s when packaging switched from steel to aluminum cans.

The "holy grail" for the nonferrous industry would be a high-volume passenger car that uses structural aluminum in its body-in-white, says Mike Southwood, senior North American aluminum consultant for the CRU Group.

O'Carroll estimates that domestic aluminum shipments to the automotive market increased 22.1 percent last year and will grow by another 16.5 percent in 2014. Aluminum could see double-digit growth among automotive customers for the next decade.

On the flipside, North American automotive steel coil demand is expected to decline by about 2.4 million tons between 2012 and 2025, estimates Metal Strategies. That includes a 2.0 million ton increase in AHSS, but a 4.4 million ton decline in other mild and high-strength low-alloy steels.

David Detzel, director of outside sales for Voss Taylor, Taylor, Mich., expects materials to change at a much quicker rate than ever before for the 2016-18 models, especially their use of dual phase, transformation induced plasticity (TRIP) and martensitic AHSS grades. The pace of new-material introductions will challenge processors.

"The processing community is nowhere near ready at this point. We are just starting to get the information we need from automakers and the mills to help us get our arms around whether we need new equipment, how we need to renovate current equipment and what the cost will be," says Angelo Capo, general manager for toll processing at Olympic Steel Inc., Bedford Heights, Ohio.

Calling this "a new ballgame," Capo says companies need to educate themselves not just about handling the new grades of steel, but also how to process aluminum. "There is no question these new materials are coming. In fact, in many cases they are already here."

Right now, there are many unknowns. "One big question that hasn’t been answered is how much AHSS will be needed if the aluminum industry takes as much market share as they plan," says Eduardo Gonzalez, chief executive officer of Ferragon Corp., Cleveland. "If the steel industry continues to invest because they think parts will remain steel and aluminum producers do the same thinking they can take steel market share, it could be a risky situation."

While toll processors tend to be "steel-centric," Scheps says, they are an important link in the supply chain for aluminum, as well. In fact, the importance of toll processors will only increase as they take on more aluminum products. "This is not only for such processing as slitting, blanking and leveling, but for increased aluminum pretreatment requirements, as well."

Proactive toll processors are already making the necessary investments to meet the new auto materials demand, Gonzalez says. “We aren’t fooling around. We want to be sure we have the necessary equipment in place no matter which way things go.” Last year, Ferragon started up a new company, Autolum Processing Co. in Wayne, Mich., specifically to address the aluminum processing to come.

According to industry estimates, North America demand for automotive aluminum sheet will increase tenfold to about 1 million metric tons by 2025. That represents a big opportunity for toll processors.

"They are very excited about this historic shift to aluminum in automotive," Scheps says. "They are saying to me, 'what can I do to get into the aluminum business?'"

Fundamentally, processing aluminum is the same as processing steel. Because it is lighter and nonmagnetic, aluminum requires some different handling and setup. Processors also need to take care to segregate the different materials so that no iron filings contaminate the aluminum. "They need to practice basic manufacturing discipline. They need to keep their machines clean, especially when doing a changeover. We would like to see lines dedicated to aluminum, but it isn't absolutely necessary," Scheps says.

"Every material has its own mechanical properties. Once you understand those properties, it is easy to move from one product to the next," adds Tom Boney, vice president and general manager of automotive, North America, for Atlanta-based Novelis Inc.

Processors also face new challenges when it comes to leveling and slitting the new advanced high-strength steel grades, says David Pettigrew, general manager for All Metals Service & Warehousing, Cartersville, Ga. Depending on the gauge of the steel, the slitting line may need more horsepower. Knife clearances require more precision.

There are also certain safety issues, says John Grossheim, national accounts processing manager with Heidtman Steel Products' Fulton County Processing operation in Delta, Ohio. "The yield strength and tensile strength of the new grades are way off the charts. You need to be patient to be sure you are doing it right and pay attention to the different ways the material reacts. There will be a learning curve."

"It will be an interesting battle between aluminum and AHSS," Pettigrew concludes. "I'm not sure which one the automakers will eventually go with. I think it is the consumer who will make that decision."


Public-Private Institutes to Kickstart Innovation

Recognizing the importance of developing and commercializing advanced lightweight materials and manufacturing technologies, the Obama administration announced the formation of the American Lightweight Materials Manufacturing Innovation Institute in February. It is one of 45 planned public-private manufacturing innovation hubs that the U.S. government intends to set up as part of its National Network for Manufacturing Initiative.

The primary focus of ALMMII will be metals, says Ron Chewning, director of government projects and business development for NanoSteel Co. A separate organization to develop composite materials is also planned.

In addition to developing new lightweight materials and manufacturing techniques for the automotive industry, the institute's work will benefit the aerospace, heavy truck, rail, energy and medical fields, Chewning says.

"The automotive industry needs to make cars lighter and safer and is under a lot of duress to do so," says Jay Baron, president of the Center for Automotive Research, a founding member of the institute. "Research centers like ALMMII will help it overcome the barriers."
 
By working together, supporters of the institute can make advancements faster than an individual company could do on its own, Chewning adds. "There will also be opportunities for cross-pollination with the various other institutes in the president’s manufacturing initiative."

ALMMII founding members number 34 manufacturing companies, including NanoSteel, Steel Warehouse Co., Alcoa Inc., Boeing Inc., General Electric, Lockheed Martin, Luvata, Materion Corp., RTI International Metals and TIMET, as well nine universities and laboratories and 17 other organizations.

The institute will receive an initial $70 million in federal funding distributed over five years, matched by at least $78 million from the consortium partners. After that five-year period it will need to be financially self-sustaining.


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Thursday, July 24, 2014