Trends in the Global Aluminum Fabrication Industry
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Global Perspectives Overview Trends in the Global Aluminum Fabrication Industry Subodh Das and Weimin Yin The aluminum fabrication industry ing, building, and construction. Trans- the global aerospace industry, with a 39% has become more vital to the global portation continues to be the largest share in 2005 shipments. As the North economy as international aluminum market, accounting for 30% of the total American market matures, Asia will consumption has grown steadily in the aluminum output. As the transportation become the driving force behind growth past decades. Using innovation, value, industry faces growing demand for high in the industry, led by the rapid growth and sustainability, the aluminum industry fuel efficiency and low gas emissions, in civil aviation in China and India. is strengthening its position not only in aluminum will become an increasingly AUTOmOTIve INDUsTRIes traditional packaging and construction important factor, offering attractive applications but also in the automotive properties and light weight for aerospace Aluminum has made great strides and aerospace markets to become more and automotive applications. in taking a portion of the automotive competitive and to face challenges from spotlight from steel, especially consid- AeROsPACe APPlICATIONs other industries and higher industrial ering its relatively recent entrance into standards. The aluminum fabrication Aluminum comprises ~80% of the not only the automotive industry but industry has experienced a significant unladen weight of an aircraft; the stan- also the metal industry.4,7–9 According geographical shift caused by rapid dard Boeing 747 jumbo jet contains to the Aluminum Association, the use growth in emerging markets in countries of automotive aluminum quadrupled such as Brazil, Russia, India, and China. between 1991 and 2005. Annual global Market growth and distribution will vary In the past 30 years, vehicle production is expected to increase with different patterns of geography and the weight of the by 11 million to reach 67.8 million in social development; the aluminum indus- 2009; with a 3% annual growth rate, try must be part of the transformation and passenger car doubled aluminum consumption could be even keep pace with market developments to greater in this industry. A recent global benefit. as horsepower and study by Ducker Research Company INTRODUCTION performance increased, on aluminum content in light vehicles showed that the aluminum content has The aluminum industry makes a and aluminum has maintained consistent, uninterrupted, substantial contribution to the global annual growth for the last 30 years and economy and to individual national been used increasingly is expected to continue to climb at a rate economies in more than 30 countries. by the industry to of approximately 3.6–4.5 kg/vehicle, or Forty-five million tonnes of annually about 3%, for the near future.7 These fabricated production, including ~14 mil- keep vehicle weight percentages will fluctuate before stabi- lion tonnes from recycled aluminum,1–4 lizing if the use of aluminum grows as make aluminum the most recycled mate- under control. predicted. rial and the second most used metal in The rise in energy costs and the need the world. (See the sidebar for more on ~75,000 kg of aluminum. Because alumi- for emissions reduction worldwide make sustainability in the aluminum industry.) num is corrosion resistant, the metal does aluminum more attractive for automotive The aluminum industry directly employs not need painting, which can save several use. In the past 30 years, the weight of more than one million people worldwide hundred kilograms of weight if airlines the passenger car doubled as horsepower and indirectly generates four times as choose not to paint their planes. and performance increased, and alumi- many jobs in downstream and service Currently there are approximately num has been used increasingly by the industries. The U.S. aluminum market 5,300 commercial passenger aircraft industry to keep vehicle weight under is the largest, consuming about 10 mil- and many thousands of light aircraft and control. lion tonnes in products and imports in helicopters worldwide, and the demand The oil crisis in the 1970s made people 2005.4 for commercial aircraft is expected to aware of the need for fuel-efficient cars, The top markets for the aluminum increase by ~60% in the next decade. and recent energy price hikes demand industry include transportation, packag- North America is the leading player in speedy action for weight reduction. This 2007 February • JOM 83 further drives the increased use of alu- can-built car or light truck is aluminum CHANGING PATTeRN OF minum, which already has been applied foil, largely for heat exchangers such as THe GlOBAl mARKeT in a variety of parts, including the engine, the radiator. According to the report, the body, hood, and front end. The Ducker remaining aluminum applications The global geography of the aluminum report stated that 61.9% of passenger car include wheels (15.7%, mostly castings), fabrication industry has experienced and light truck aluminum content is exterior trim and interiors (4.6%), chas- major reconstructive and geographic castings for the components, such as sis and suspensions (2.6%), closure changes driven by energy, environment, engine blocks, cylinder heads, and panels (1.2%, mostly hoods), body and market. In contrast to the matured manifolds. Another 12.9% of the alumi- structures (0.7%), and bumper systems market in North America, aluminum con- num content of a typical North Ameri- (0.4%). sumption is growing approximately 11% annually in China and 6% in Russia.1,4 Compared to western countries, the sUsTAINABIlITY OF THe AlUmINUm FABRICATION INDUsTRY per-capita aluminum consumption in It is estimated that while annual production of primary aluminum from bauxite is 32 developing countries is still very low. million tonnes, there are still 400 million tonnes of the metal in use that will eventually be However, considering that half of the available for recycling. Today, the secondary aluminum stream is becoming an even more world population is concentrated in only important component of aluminum production and is attractive because of its economic four countries (Brazil, Russia, India, and environmental benefits, which can significantly improve the sustainability of the aluminum fabrication industry. and China), a few kilograms increase Aluminum has been referred to as an “energy bank” in that once the energy has been per capita in these countries will result invested in it through the smelting process it can be effectively drawn upon again through in tremendous growth for the entire recycling. It requires 45 kWh to produce 1 kg of primary aluminum, whereas the same industry. amount of secondary aluminum produced from recycled metal requires only 2.8 kWh. Following the current trend, global Recycling aluminum saves 95% of the energy to produce virgin aluminum, whereas primary aluminum production is pro- recycling steel saves between 40% and 75% of the energy required to produce virgin jected to reach around 60 million tonnes steel from its ore. This is mostly a function of the higher melting temperature of steel as by 2020,1,4,10 which is double the current compared to aluminum. production. The Asia market will con- Primary aluminum production consumes 2% of the worldwide electricity supply, tribute to 63% of the increase, as shown and one-third of the total energy consumption in primary aluminum production comes in Figure 1. The growing aluminum con- from coal-generated electricity. Air pollution from primary smelting includes hundreds of thousands of tonnes of carbon dioxide and nitrogen oxide, which can be controlled sumption in emerging markets extends by environmentally friendly practices such as recycling. According to the Bureau of to almost all sectors of the aluminum International Recycling, the energy saved by recycling lead, steel, copper, and aluminum industry, including transportation, con- is 65%, 74%, 85%, and 95%, respectively, as compared to primary production. Energy struction, and packaging; however, the saved translates into reduced environmental emissions, which means recycling aluminum emerging market is focused on infra- scrap emits only 5% of the carbon dioxide produced in making new primary metal. structure building, transportation, and Recycling aluminum alloys provides major economic benefits. In the United States, simpler commodities (Figure 2), which shipments of aluminum in the form of both wrought and cast products have increased is different from the patterns in western from 8 million tonnes in 1992 to 10 million tonnes in 2002, while primary aluminum countries.4 production has been shrinking. Although imports have increased, secondary aluminum In aluminum packaging, 100 billion has become an increasingly important component of metal supply. Secondary aluminum aluminum beverage cans are consumed benefits the aluminum fabrication industry by using low-cost, recycled aluminum instead of expensive primary aluminum. To survive in this competitive market of high energy each year in North America, but the and raw material costs and relatively low finished goods prices, producers must minimize market has been flat since peaking in conversion costs while maximizing the recoverable metal units. 1999. In the same period, the world In the case of the aluminum beverage can, the significant economic advantages of aluminum packaging market grew rap- aluminum recycling have also been demonstrated5,6 in a joint study by Secat, the Center idly, mostly from emerging markets in for Aluminum Technology, and the Sloan Industry Center for a Sustainable Aluminum Asia and Eastern Europe. With continu- Industry, which showed that for each 1% increase in the amount of aluminum cans ing massive international investment, recycled, the savings to the U.S. economy is $16 million per year. This value could China has the world’s fastest growing approach $800 million if all available cans were recycled. economy (the gross domestic product Despite the benefits of recycling aluminum cans, the industry is facing a new challenge increased by more than 11% in the first as recycling rates decline. Whereas aluminum recycling in sectors such as transportation half of 2006), and its aluminum beverage and construction is about 95% in North America, only 52% of recovered beverage cans were recycled in 2005 as compared with 67% in 1992. By comparison, the global can market is reflecting this with growth recycling rate averages 63%. of close to double digits. In the next year, One of the major tasks in building a sustainable aluminum fabrication industry is to China’s two-piece beverage can market develop recycling-friendly alloys. So far, the identification of new alloys that will more will far exceed 10 billion cans.11 The readily use recycled aluminum has received little attention and, in fact, is considered market share of aluminum packaging is impractical by some because of the generally negative effects of impurity elements. only 8% in China as compared to ~20% However, the potential economic and environmental benefits are sufficiently great that it of total aluminum production in the is indeed useful to consider this approach. Western world.4,10 Considering the poten- tial greater market share in developing 84 JOM • February 2007 countries, the growth of the aluminum Chinalco (Aluminum Corporation of num can for the rest of this decade, as packaging market could be tremen- China) also is ranked among the leading plastics are beginning to take an increas- dous. global aluminum companies, with a ing share of the carbonated soft drinks The aluminum supply chain is also market share of more than $12 billion. and water market. experiencing major change within the The company expects to quadruple its In the past decade, the aluminum existing market as well as in the emerg- total assets, revenues, and realized prof- industry has worked hard to keep its ing market. The increase in energy costs its of 2000 in another 10 years. share of the packaging market.12 To and raw materials prices require more reduce the cost of the two-piece alumi- CURReNT CHAlleNGes efficiency in operation and management. num can (3104 can body and 5182 can AND FUTURe As a result, the aluminum industry in the end), the metal gauge for the most OPPORTUNITIes Western countries has been consolidated popular 12-oz aluminum can body was and reorganized in the past years; the Although the aluminum fabrication reduced from 18 thousandths of an inch market share is split between more industry is currently successful in key to just 10 thousandths of an inch. In competitive but fewer suppliers as some markets such as transportation, packag- addition, the can design was modified players went out of business. One ing, and construction, a number of chal- to strengthen the can body and minimize example is the aluminum rolled sheet lenges are emerging from the increasing the size of the more-expensive 5182 can for the beverage can industry. Despite end. New coatings and graphic designs the vast available market, the supply of Innovative products were developed and applied widely in rolled can sheets is provided only by the industry; however, the efforts are not Alcoa, Novelis, ARCO, and Wise Alu- are needed to meet sufficient to increase the market share. minum in North America. New players a variety of market Diverse groups on technology, research, in the aluminum fabrication industry needs besides and development must be created to have emerged as a result of mergers and devise new strategies to provide innova- acquisitions, such as Aleris Interna- traditional tive and enhanced cost-effective solu- tional. aluminum packaging. tions. Following the example of the automo- Innovative products are needed to meet tive manufacturers, the aluminum fab- energy and raw material costs and stron- a variety of market needs besides tradi- rication industry has set up new facilities ger competition from other industries tional aluminum packaging. Aluminum in the emerging markets.10 For instance, such as steel and plastics. Innovation is packaging does more than provide basic Novelis has two rolling mill plants in the key to staying competitive and grow- packaging; it also offers functionality Korea to provide can sheets to the Asian ing in the face of these challenges and and security to the customers. Great market. Also, Alcoa acquired a Russian opportunities. progress has been achieved, such as the facility to access the fast-growing Rus- shaped bottle and the specialty can, Packaging Market sian and Commonwealth of Independent which provide a new appearance and States markets and invested in a plate The aluminum packaging industry more convenience. A departure from facility for the aerospace industry. Alcoa experienced steady growth in the 1980s conventional direct-chill casting to con- plans to double its production in Russia but shipments became flat in the 1990s. tinuous casting should enable the supply in the next 5 years. Worldwide, 200 billion aluminum bever- of rolled sheet at a significantly lower The business and profits in the emerg- age cans are consumed each year, half cost that can be converted without com- ing market are becoming more important by North America. An industry shift promising manufacturing efficiencies or for growth. For every dollar Alcoa gen- shows discouraging signs for the alumi- affecting ultimate container perfor- erated in 2005, ~$0.40 came from the overseas market. International corpora- Others Latin America Others Latin America tions are not only building new manu- 3.5% 8.2% 2.8% 9.9% facturing facilities and acquiring local Asia Western Asia 42.0% Europe manufacturers in the emerging market, Western 52.1% Europe 17.8% but also redistributing their existing 21.5% facilities worldwide. For example, Hydro moved its production of cylinder heads, engine blocks, and bumper beams from Europe to China. On the other hand, the suppliers in Brazil, Russia, India, and China are North North growing at unparalleled speed because America America of effective cost, soaring demand, and 23.1% 19.1% strong government support. The Russian 2005 2020 aluminum giant Rusal became one of (Total Production: 32 Million Tonnes) (Projected Production: 60 Million Tonnes) the largest aluminum suppliers in the Figure 1. The world consumption of primary aluminum, in millions of tonnes.1,4,10 world after merging with two partners. 2007 February • JOM 85 Containers arms, and front and rear knuckles. Containers Other & Packaging Other Shipment Shipment Approximately 445 kg of the 1,298-kg 13.0% & Packaging 8.0% 20.0% 16.0% Prowler consists of aluminum, including Consumer Transportation 14.0% the body, frame, and suspension parts, Durables 6.0% using virtually every known alloy and Consumer Electrical Durables form of aluminum. Researchers have 6.0% 10.0% experimented with a technique known Machinery as electromagnetic forming (EMF) to & Equipment reduce or even eliminate the wrinkling 7.0% Electrical 13.0% and springback associated with conven- Building & Building & tional forming processes, as well as to Construction Transportation Construction 14.0% Machinery increase the formability of aluminum 34.0% & Equipment 30.0% 9.0% sheet. Initial results based on trials with North America (2005) China (2003) two aluminum parts indicate that EMF Figure 2. The current market share by application sectors.4,10 greatly improves aluminum forming. If EMF is to be employed on a large scale in the automotive industry, extremely mance. Radical changes in can design, which means engineering a body robust coils must be developed. such as flat-bottomed containers, could structure to meet crash safety and stiff- An aluminum body technology crafted lead to less metal in the dome of the can, ness requirements demands a different around the Audi Space Frame (ASF) has saving a predicted 6% in metal cost. The approach. Typically, components such been created in the Audi A8. The ASF intrinsic value of aluminum, which as door panels and hoods are formed is a high-strength aluminum structure in generates more revenue for recyclers using conventional mechanical presses which the large integral aluminum-sheet than other materials, will also continue that stamp steel or aluminum sheet into components also perform a load-bearing to provide a competitive advantage. their final shape. Some components are function. The actual frame consists of designed to have sharp creases (e.g., a extruded sections joined by vacuum- Transportation Market style line of a hood) or deep recesses and formed die cast nodes. Acting as a safety Aluminum has one-third the density small radii (e.g., curves like those found cell, the aluminum alloy structural mem- of steel, which means a component can in door inner panels), which sometimes bers of the ASF absorb energy better in be 1.5 times thicker than a steel version create problems for manufacturing relation to their weight than steel. and retain a 50% mass advantage. It can engineers when using aluminum. These For the post-use stage, the amounts of also absorb twice as much energy as problems may include splitting of the carbon dioxide generated by aluminum steel at the same mass. Aluminum has metal, wrinkling as material gathers in and steel are based on the assumption a naturally high resistance to corrosion a corner, and spring back when the part that 90% of the material is recycled. because of an invisible oxide film formed is removed from the die. Once the usage end-of-life of the vehicle with exposure to air. This corrosion Because of these issues, a single alu- is increased, the difference between the resistance may be further improved by minum part might require more stamp- use costs for both materials becomes an electrolytic anodic oxidation treat- ing stages than a comparable steel part significant, making an aluminum struc- ment, known as anodizing, in which a or the part may have to be divided into ture a more economical option. After 10 thicker and more adherent oxide skin is two or more pieces that are then joined years, the aluminum structure has a cost developed. together, adding time and cost to the advantage of about 5% as compared with The vehicle body alone accounts for manufacturing process. A less desirable the steel structure. about 25% of the total mass of a typi- alternative is to make compromises on CONClUsIONs cal vehicle and now offers the greatest either the material choice or the part potential for mass savings because other shape.13 Thus, engineers have been trying Aluminum fabrication is in the midst engine and transmission applications to develop other methods to replace or of rapid growth and a market transforma- have already converted to aluminum. complement the conventional mechani- tion. To sustain the growth, the industry Aluminum is considered the favored cal stamping process to fully realize the must follow the changing pattern of material for this savings because it is potential mass savings of using alumi- the global economy. The growth of the much lighter than steel and widely avail- num components. mature market in the major developed able. The semi-solid forming process com- countries will be different from the Although aluminum is lightweight, bining casting and forming14 rheocasting emerging market in the major developing highly recyclable, and corrosion resis- makes near-net-shaped parts, or parts countries such as Brazil, Russia, India, tant, the cost per kilogram of aluminum that need little if any additional shap- and China. sheet is currently four to five times more ing after they are formed, thus saving The industry in the developed countries than steel for automotive applications. time and expense. The technology has will focus on innovation and technology Aluminum is considered to be more been applied on the Plymouth Prowler because the market volume in these difficult to weld and stamp than steel to produce suspension and wheel com- countries will grow at a relatively steady and behaves differently when stressed, ponents such as control arms, rocker rate. Research and development is vital 86 JOM • February 2007 to keep the market share in traditional Recycled metal already satisfies more 7. “Aluminum Content for Light Non-Commercial applications such as packaging and con- than a quarter of world demand for Vehicles Assembled in North America, Japan and the European Union in 2006” (Detroit, MI: Ducker struction and to expand the market in the aluminum. Because sustainability is Research Company, 2005). areas of aerospace and transportation. A becoming a priority within society, the 8. “2002 North America Light Vehicle Aluminum new model of research and development fully recyclable nature of aluminum will Content Study” (Detroit, MI: Ducker Research Company, 2001). that consolidates the facility resources help the industry to make a greater con- 9. “Report on Aluminum Content in 1999 North and intellectual capacity of several tribution to the future global economy. American Passenger Cars and Light Trucks” (Detroit, organizations appears to meet the needs MI: Ducker Research Company, 1998). ACKNOWleDGmeNTs 10. “The Aluminum Fabrication Industry: Global of the entire industry to provide robust Challenges and Opportunities,” presented at the TMS and cost-effective solutions. The authors thank Dr. John A.S. Green, Annual Meeting, San Antonio, TX, March 13, 2006. In the near future it appears that J. Gilbert Kaufman, and Dr. H. Wayne 11. Terry Voce, “Growth for Drinks Cans Is Close to Double Digits in China,” The Canmaker, 19 (2006), p. urbanization in the developing countries Hayden for their valuable inputs and 12. will continue creating a large market suggestions. We also acknowledge the 12. Paul Butler, “Current and Future Challenge for for almost every sector of the alumi- help Ms. Tammy Miller provided during Aluminum as a Packaging Materials,” Materials Science Forum, 396-402 (2002), pp. 9–14. num fabrication industry, especially the preparation of this manuscript. 13. Karl-Heinz von Zengen, “Aluminum in Future infrastructure building. Market growth References Cars—A Challenge for Materials Science,” Materials and distribution will vary with different Science Forum, 519-521 (2006), pp. 1201–1208. 1. “Mineral Commodity Summaries, Aluminum” 14. “The Battle of the Metals: New Aluminum patterns of geography and social devel- (Washington, D.C.: U.S. Geological Survey, 2006). Processes,” Automotive Engineering International opment; the aluminum industry must be 2. “Aluminum for Future Generations: Sustainability Online, http://www.sae.org/automag/metals/11.htm part of the transformation and keep pace Update 2005” (Haymarket, London, UK: International (accessed 15 November 2006). Aluminum Institute, 2005). with market developments to benefit. 3. “The Aluminum Industry’s Sustainable Development Subodh K. Das is the president and chief executive The future growth of the industry Report” (Haymarket, London, UK: International officer of Secat, 1505 Bull Lea Road, Lexington will require significant resources, which Aluminum Institute, 2002). KY 40511. He is also director for the Center for 4. “Aluminum Statistical Review for 2005” (Arlington, Aluminum Technology, executive director for the without new technological approaches VA: The Aluminum Association, Inc., 2006). Sloan Industry Center for a Sustainable Aluminum may constrain the supply of raw materi- 5. Subodh K. Das and Margaret Hughes, “Improving Industry, and adjunct professor of mechanical als and create additional environmental Aluminum Can Recycling Rates: A Six Sigma Study in engineering and chemical & materials engineering Kentucky,” JOM, 58 (8) (2006), pp. 27–31. at the University of Kentucky. Weimin Yin is a issues. New approaches that may reshape 6. Subodh K. Das, “Designing Aluminum Alloys for a materials engineer at Secat. S. Das can be reached the industry itself are needed to keep Recycle-Friendly World,” Light Metal Age, June (2006), at (859) 514-4989; fax (859) 514-4988; e-mail the industry healthy and sustainable. pp. 26–33. email@example.com.