Metals News
Norsk Expects Strong Aluminium Sales to Automakers
industry news
Jul 1,2010

LONDON, July 1 -- Sales of aluminium to the auto sector should rise faster than the rate at which cars are produced, as auto makers increasingly look to the light metal to improve fuel efficiency, Norsk Hydro said on Tuesday.

About 30 percent of global aluminium consumption -- estimated at around 37 million tonnes this year -- is accounted for by the transport sector and many are asking how demand for the light metal will pan out in the auto industry.

"We see the amount of aluminium in each car going up steadily. 2006 figures are indicating on average 120 kg aluminium in each car," Halvor Molland, a vice president at the Norwegian aluminium producer told Reuters.

"International forecasts expect a strong rise in global car production and sales in the long term. With increased aluminium penetration, aluminium sales to automotive should rise more strongly than global car production."

Norsk Hydro supplies the car industry with a variety of products. About one-sixth of its aluminium product sales go to the auto and transport sector.

Aluminium is slowly starting to substitute some of the steel used to make cars, trucks, lorries, buses and trains.

"The metal is an important part of the automotive industry's effort to reduce the weight of vehicles to improve fuel efficiency and reduce emissions ... In volume our biggest contributions are probably for wheels," Molland said.

"A number of safety solutions for cars, trucks and mass transportation involve aluminium, because of its properties in absorbing energy as well as its formability."

Hydro's sales of alloyed metal products at 2.4 million tonnes, were 20 percent below the levels seen in 2008.

After global auto sales tumbled 13 percent in 2009, automakers and their suppliers benefited from government support and signs that sales were stabilising in the United States.

The boom continues in the world's largest vehicle market China, where total vehicle sales including cars, buses and trucks, rose 28.4 percent to 1.44 million units in May from the same period a year ago.

"We are ... growing our markets in Asia in the supply of primary foundry alloys, especially for wheels," Molland said.

But questions remain about the United States and Europe, at a time when the industry is readying expensive new technology to improve fuel economy.

Benchmark aluminium on the London Metal Exchange rose to record high of $3,380 a tonne in July 2008 and tumbled to below $1,300 a tonne in the first quarter of 2009 as fears about a 1930s style depression escalated.

It was trading at around $1,960 a tonne on Tuesday.


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