Global aluminium body sheet demand to reach 4 Mt by 2030

EDINBURGH/SINGAPORE/HOUSTON, 25 JUNE 2014 – Wood Mackenzie's latest analysis looks at how automotive manufacturers are adopting more radical approaches to automotive design by using lighter weight materials to meet fuel economy requirements. Wood Mackenzie believes that ‘lightweighting’ will remain an important component in improving fuel economy and as a result expects to see further changes to the use of steel, zinc, aluminium, magnesium and plastics by the car manufacturing industry.  The increasing use of lightweight materials to improve fuel efficiency in road transport is projected to deliver a 10% decline in road fuel demand across Europe and North America by 2030.

Ms. Renate Cakule, Steel Markets research analyst for Wood Mackenzie  explains:  "Vehicles have been gaining weight almost continuously for several decades but now with tightening fuel economy standards and stricter emissions regulations, vehicles have started to become lighter. In a drive to meet the new efficiency targets we believe that lightweighting will continue and as a result we expect to see further changes to material use. We believe that conventional steels will be gradually phased out through increased use of advanced / ultra high strengths steels and new generation steels and a further penetration of aluminium, magnesium and plastics. Although steel will still remain dominant, lightweighting will imply lower steel consumption per vehicle. The largest impact will be in the United States, where passenger vehicles have most weight to lose and long term automotive production is not expected to increase. Here, we forecast automotive steel demand to be 2-3 million metric tonnes lower by the middle of the next decade compared to today's consumption. The global impact will be much smaller as growing automotive production in emerging markets will offset lower steel consumption implied by lightweighting. "

As well as changes to the use of steel, higher aluminium usage across luxury and heavy passenger vehicles will occur but there will be limited gains for these materials in the mass produced family car segment where car price plays an important element in the final purchasing decision. Aluminium although lighter is more expensive than steel. Historically Europe has led the way with use of aluminium sheet in cars, however, the tighter US emissions regulations has encouraged the US car industry to embrace aluminium body sheet as a weight reducing material. Uday Patel, Manager, Aluminium Markets for Wood Mackenzie, explains: "When Ford rolls out its aluminium bodied F-150 model in 2015/16, it will represent one of the most significant changes in material usage in the automotive sector for a decade as it is over 300kg lighter than its predecessor. We estimate that currently an average North American passenger car will have 22.7kg of aluminium body sheet compared to 20.4kg for the average European car however we project that by 2020 the usage of aluminium body sheet per vehicle will reach 66.2kg in North America and 36.1kg in Europe. For the other significant vehicle production hubs, China and Japan, we expect a less spectacular increase in aluminium sheet use despite growing vehicle production.  Overall, we expect global aluminium body sheet demand to reach 4 Metric tonnes by 2030, with the North American market capturing almost 60% of global demand, followed by Europe with 29%, China with 10% and Japan with 1%."

The pressure to reduce vehicle weight has been an issue for zinc which has seen its use in car manufacturing decline from 20kg in the late 1970's to today's levels of 9kg or less. Wood Mackenzie believes that the launch of the aluminium bodied F-150 clearly represents an even greater risk to zinc demand from the automotive sector. Andrew Thomas, Senior Analyst for Zinc markets at Wood Mackenzie explains: "If the new F-150 manages to achieve sales levels similar to its predecessors it could eliminate as much as 10-12kilos tonne per annum (Kt/a) of zinc demand. If the technology is adopted in Ford's other heavy duty trucks and SUVs the International Zinc Association estimates that demand destruction could increase to 18kt/a. However the losses to consumption caused by lightweighting are likely to be more than offset by the increased market penetration of galvanized sheet into the automotive markets of the developing world. According to the International Zinc Association (IZA), only 20% of Chinese passenger vehicles feature galvanized steels while in India the figure is even less It is in these markets that the affordability, availability and the repairability of galvanized sheet will prove a key strength and driving force behind increased market penetration, potentially increasing zinc demand from these two markets alone by as much as 750kt/a" 

The use of plastics in automotive production has increased steadily due to their mechanical properties and costs. As many plastic components can weigh as much as 50% less than similar components made from other materials, Wood Mackenzie believes that plastics will be integral to automotive light weighting. Ashish Chitalia, Research Analyst with Wood Mackenzie's Chemical team explains: "As the technology to incorporate plastics with other materials advances, we expect to see the increased use of plastics in under-the-bonnet applications such as fuel tanks and pipes, engine parts and others. Furthermore, the use of plastics composites in structural and more demanding applications will also increase.  In Europe, where automakers use more plastics than those in Japan and the United States, we expect plastic consumption per car to increase from the current 12-14% of car weight to 16-18% by 2020." 

Richard Warner, Fuel Demand Analyst at Wood Mackenzie, adds: "The increasing use of lightweight materials to improve fuel efficiency in road transport has major implications for energy demand.  A 10% saving in weight on a modern small to mid-size car equates to an improvement in fuel efficiency of between 2% and 4%, dependent on whether the vehicle is driven in an urban or non-urban setting, tyre gauge, maintenance and other factors. Hence, for example, a 30% vehicle weight reduction achieved through increased aluminium usage could equate to 12% greater vehicle fuel efficiency."

It is clear that gains from weight reduction, as well as other sources of improvements in fuel efficiency, will save increasing amounts of fuel in the coming years. Wood Mackenzie projects that road fuel demand will decline by almost 10% in both Europe and North America by 2030. This will also have an impact on fuel consumption in emerging markets as many of the cars manufactured for developed countries are exported as second hand cars to developing countries. The improved fuel efficiency of these cars will in turn help to limit road fuel demand growth in emerging markets.

By 2030 Wood Mackenzie forecasts that road fuel demand will have grown by almost 9 million barrels per day to some 48 million barrels. As such, the improvement in fuel efficiency that vehicle weight reduction offers is an important consideration for ordinary road users, car manufacturers and policy makers, especially in a world of consistently high oil prices.

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