STEEL VS AL: Novelis announces further hike in auto sheet prices

Downstream aluminium producer Novelis has raised the price of its North American automotive and specialty sheet products – the latest business to do so in response to rising aluminium demand among carmakers.

Downstream aluminium producer Novelis has raised the price of its North American automotive and specialty sheet products – the latest business to do so in response to rising aluminium demand among carmakers.

The company added six cents per lb, or $132 per tonne, to its 6xxx and 5xxx series automotive alloys, while making smaller increases to its 1xxx, 3xxx and 5xxx series specialty alloys.

“The automotive [sheet] price increase is in addition to the previously announced pricing adjustment made on January 1, 2014, of $0.11 per lb for 6000-series, 5182-series and 5000-series coated automotive alloys,” Novelis said.

Such price increases come as aluminium demand among carmakers is at historical highs, led by Ford’s decision to make its 2015 model F-150 pick-up truck with an aluminium body.

Aleris raised its automotive sheet prices in 2013, shortly after Novelis itself raised auto sheet prices in its European business in July of that year.

The switch towards aluminium for certain carmakers is not a cheap or easy one, and involves the retooling and revamping of a number of facilities along the vehicle production chain.

“To support the rapidly growing automotive market demand, Novelis remains committed as the industry leader in announced capacity investments in North America, Europe and Asia,” Marco Palmieri, president of Novelis North America, said in a statement.

“In North America, we’ve commissioned two new auto finishing lines in Oswego, New York that are in full production and are completing construction of a third auto finishing line increasing our regional capacity by up to 360,000 tpy,” he added. “That’s seven times our current production capacity and an important milestone to remain the industry leader, as North American automotive market demand is expected to increase 20-fold in the next ten years.”

But higher prices could cause some carmakers in the future to rethink their position on aluminium. During Metal Bulletin’s steel vs Al debate, it became clear that cost is one of the main disadvantages of aluminium over steel.

The USA’s Massachusetts Institute of Technology (MIT) broke down the costs of steel use compared with aluminium during the debate.

In raw materials costs, aluminium is about three times more expensive than steel, while in terms of conversion costs it is about twice as expensive, MIT said.

And in assembly costs, aluminium was 20-30% more expensive than steel.

Jethro Wookey
jwookey@metalbulletin.com
Twitter: @jethrowookey_mb


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