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Steel Is Back in Style With Car Makers

15 Oct 2017 11:00 am
By Bob Tita 

Auto makers are rediscovering steel.

Varieties of lighter, stronger steel are being used in Fiat Chrysler Automobiles N.V.'s Pacifica van, Honda Motor Co.'s Ridgeline pickup truck and General Motors Co.'s Chevrolet Malibu sedan. Audi AG, which switched to an all-aluminum body for its A8 sedan more than 20 years ago, is using steel again on the latest model.

"It's the strongest and most rigid A8 we've built,' said Audi spokesman Mark Clothier.

Steel has always been cheaper and stronger than aluminum. But conventional steel is heavy. Many car makers seeking to comply with tougher fuel economy requirements have shifted in recent years to aluminum and other light materials like carbon fiber.

Now, steel makers have figured out how to make steel lighter without compromising its strength or versatility. "Everything is moving to thinner and lighter," said Mark Bula, chief commercial officer at Big River Steel. a mill that opened in Arkansas last year. "The steel industry is moving that way as well."

On next year's Audi A8, steel will make up 40% of the metal in the passenger-compartment frame, up from 8% eight years ago.

By 2025, the amount of lightweight, high-strength steel in a car or light truck in North America is projected to rise to an average 483 pounds, 76% above the 2015 average, according to industry consultancy Ducker Worldwide.

ArcelorMittal N.V. expects auto makers' global demand for press-hardened steel sheet, which is strong and malleable for complex stamped parts, to grow 36% by 2020 to 3.7 million metric tons.

The company, the world's largest steel maker, began producing a new generation of super-strong steel at its mill in Calvert, Ala., this year. And it plans to open a plant in Detroit late this year -- the third of its kind in the U.S. -- to weld and heat-treat multiple pieces of lightweight steel of varying strength grades and thicknesses into a single sheet.

Sheets from these plants are stamped into large components, such as door frames, that feature some sections with extra-strong steel and others with steel that has less strength but is easier to bend. The 2017 Chrysler Pacifica's two front-door frames are each made of five pieces of steel with three different thicknesses. The door frames shaved 22 pounds off the vehicle, Fiat Chrysler said.

Aluminum remains in wide use with auto manufacturers looking to reduce a vehicle's weight. Even as lighter steel gains popularity, aluminum is expected to continue replacing heavier-steel varieties.

Aluminum content in cars and light trucks in North America is expected to reach an average of 520 pounds in 2025, a 31% increase from 2015, according to Ducker Worldwide. More than two-thirds of closure components, such as hoods and trunk lids, on light vehicles are expected to be aluminum by 2020, double from 2016.

"High-strength steel has some inherent properties that are tough to
escape from. It's three times heavier" than aluminum, said   Svein Richard Brandtzaeg, chief executive of Norwegian aluminum producer Norsk Hydro ASA. 

Aluminum's penetration into the auto industry is experiencing some growing pains. Auto makers in Japan are scrambling to check the safety of their aluminum components after one of Japan's biggest aluminum suppliers, Kobe Steel Ltd., this week disclosed that quality-control paperwork for auto customers had been doctored.

Still, steel remains cheaper than aluminum. To maintain that edge, analysts say steel companies have refrained from maximizing profits on the new high-strength steel grades as they work to draw customers back from aluminum.

North Carolina-based Nucor Corp., whose electric furnaces were once derided as insufficient for making automotive-grade steel, now sells nearly a fifth of its annual production volume to auto makers.

"Our industry has gotten a wakeup call the last couple of years because of aluminum," said Nucor's Chief Executive John Ferriola. "In the battle against aluminum, steel is going to come out very well."

--Chester Dawson contributed to this article.
 

(END) Dow Jones Newswires

October 15, 2017 07:00 ET (11:00 GMT)

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