Global supplier says automakers are in new aluminum “race” image

According to Constellium NV, a global aluminum fabricator, following Ford’s decision to use aluminum extensively for the construction of the new 2015 F-150, carmakers have entered a “race” to get more of the lightweight metal.

The properties of the metal, which is now used in automobiles as a lightweight counterpart to steel, have been known and valued for years in the auto industry. Yet, the usage of the metal was reserved only to specialty products and for decades the demand stagnated.

Now, the automakers “race” to secure aluminum supply as the metal’s importance grows and could replace steel in many new models. Because of that demand, Constellium NV, a worldwide supplier of aluminum to many industries – including aerospace, transport, defense, building and automotive – has opted to acquire another aluminum-fabricator.

The Europe-based group has agreed to purchase US-based Wise Metals Intermediate Holdings LLC for $455 million, also taking in debt of $945 million. Constellium also said it would invest as much as $750 million by 2022 to increase the subsidiary’s production output.

“I’m convinced you will hear our competitors continue to announce new capacity because it’s a race,” says Constellium Chairman and Chief Executive Officer Pierre Vareille.

In the US, besides Ford, its main rivals General Motors and Chrysler both plan to replace steel with aluminum to save weight and lower fuel consumption as they strive to meet demanding new emission regulations. According to consultant Ducker Worldwide, aluminum usage would increase to 3.2 million metric tons in 2015, up 28% from 2012.