Demand for automotive aluminum is set to more than double by 2025, driven by surging growth in Asia, a senior executive at Novelis Inc, the world’s largest maker of rolled aluminum products, said on Thursday.

Automakers are turning to aluminum to replace high-strength steel, as well as combine with materials such as carbon fiber and plastics to produce lighter body panels for use in electric vehicles that meet stricter environmental standards.

“Typically what we see is an increase of aluminum percentage of the (automotive) body, which is why we’re projecting to grow from 1.5 million tonnes of aluminum demand this year to 3.5 million tonnes a year in 2025,” said Pierre Labat, vice president of global automotive at Novelis.

“We will continue to add new products in the years to come which make the value proposition of aluminum very compelling for strength and light weight,” he told Reuters.

Of the estimated 1.5 million tonnes of global automotive body sheet demand in 2018, Asia accounted for only about 10 percent, or about 150,000 tonnes, Labat said.

However, Asia is expected to be the fastest growing region in coming years and match European demand by 2025.

“China and the rest of Asia will almost grow from 10 percent to one third of global demand,” he said.

Amid heightening Sino-U.S. trade tensions, Novelis said in May it would double its automotive body sheet capacity in China in a bid to meet the country’s growing electric vehicle demand.

Labat said he does not expect “a lot of impact” from the intensifying trade row, adding that it was too early to say how it would affect aluminum demand.

“What we see, which is positive, is customers like Tesla that we serve in North America coming to China and opening new facilities in China. So this is going to increase aluminum demand in China,” he said.

The Atlanta-based company, owned by India’s Aditya Birla Group, supplies aluminum to automakers including Jaguar Land Rover [TAMOJL.UL] and Ford Motor Co and also to drinks makers such as Coca-Cola.

While aluminum is lighter than steel, it is also more expensive, and steel has been fighting back with some car makers.

Labat said aluminum was increasingly used in automotive bodies such as doors, but would not replace steel completely.

“I think we are convinced that the world at least in the next 10 years will be multi-material architecture with aluminum tripling its size,” he said.

 

Source: reuters.com

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