13 January 2014 22:18 [Source: ICIS news]
HOUSTON (ICIS)--As Ford Motor on Monday unveiled its new F-150 pickup truck, sporting a lightweight body of military-grade aluminium alloy, alumina market watchers reacted with optimism.
Alumina production is one of the key downstream consumers of caustic soda, which is a co-product of chlorine in the chlor-alkali process.
“I think that’s a sign of things to come for the industry,” said a marketing manager for a large aluminium producer. “Automotive is a key growth sector for the industry right now - and for the foreseeable future.”
The aluminium content of autos has been growing at about 5% a year for the past decade or more, according to a report by Barclays in 2013.
Accelerating that pace has been Land Rover, Mercedes Benz and Jaguar, which have adopted aluminium alloy bodies to recent models, reducing vehicle weight by an average of 350 lb (160kg), according to aluminium industry estimates.
But Ford’s move brings a 700-lb savings to America’s best-selling vehicle and is likely to foreshadow broader acceptance of aluminium bodies among consumers and the auto industry overall.
“Aluminium, pound-for-pound, is tougher than steel,” said Alan Mulally, Ford’s CEO and a veteran of Boeing, an aerospace company that pioneered the use of the metal in aircraft.
“I think customers are going to value the toughness,” Mulally added.
Wider acceptance of aluminium would be good news for the industry and caustic soda producers.
The US aluminium industry has for two years suffered a glut of overcapacity. Much of it is blamed on the large addition of new production facilities in China.
Alcoa, Rusal and Rio Tinto have all taken initiatives to cut costs and some have taken capacity out of a market that has seen sales decline 29% in the past five years.
Those cuts have drifted down to suppress demand for such chemicals as caustic soda.
So the aluminium industry is looking for new markets and new applications, and autos may be the most promising.
In December, aluminium producer Novelis announced that it will invest $205m to expand to meet rising automotive demand.
That optimism is getting a boost from federally mandated fuel mileage standards.
The F-150, Mulally noted, should get a 25% increase in fuel mileage, though the company did not reveal the exact increase of fuel efficiency on Monday.
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