Aluminum Challenging the European Automotive Supply Chain

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Reading a reprint in the Balkan news concerning raw material supply to the European automotive market, one would think rare earths for electric and hybrid cars, or copper for wiring, or even lead for batteries was probably the most crucial medium-term supply chain worry for Europe’s automakers. But in fact the product that is keeping many car manufacturers awake at nights is aluminum.

Yes, we have four and half million tons of primary metal sitting on futures markets exchanges, and yes, we have at least the same again sitting in invisible private inventories, both in the West and China, but an aluminum ingot is of minimal use when making a car body. The rapid growth of aluminum use, particularly high-strength 5000 series aluminum sheets in car bodies has caught the industry on the hop. Jaguar Land Rover (JLR) intends to invest £6-7 billion over the next five years as it rolls out over 40 new products, including the multiple variants in that time period. Speaking on the sideline of the Geneva Motor Show, Ralf Spheth, CEO Jaguar Land Rover, said, “This is the most ambitious product launch plan in the history of Jaguar Land Rover. The company plans to build entry-level Jaguars, including the roadster and the station wagon plus more smaller compact vehicles, with a big focus on using lighter aluminium compounds to deliver low Co2. Unofficial reports reaching MetalMiner suggest JLR has informed their European supply chain they are going to need over 40,000 tons of automotive-grade aluminum sheet per annum within a couple of years, in addition to current demand for LandRovers and the all aluminum XJ models. The top of the range XJ body is 95% aluminum, and weighing just 300 kilograms, it is 40 percent lighter than a steel equivalent, according to a Reuters article.

JLR is not alone. BMW and Audi have been using aluminum in the bodies of their luxury models to improve both performance and economy, but crucially to improve the average fuel consumption across their whole range — a measure car manufacturers are being pushed to improve. Following their lead, Peugeot, Renault, Citroen, VW and Volvo, to mention just a few, are increasingly using aluminum in body panels such as bonnets, boot- or trunk lids and doors.

European aluminum producers are already running at capacity and have major clients on allocation, and the only way they will be able to achieve such an increase in supply is with a major refurbishment of casting, rolling and finishing lines at existing low alloy facilities or the installation of a major new rolling plant, something that has not happened in Europe in the last 20 years. To get a sense of the problem, the European car market currently uses 130,000 tons of aluminum sheet, for the most part in body parts, such as bonnets, doors and panels. That figure could double or even triple in the next five years as whole body shells are increasingly made from the metal, said Jaguar Land Rover’s Chief Technical Specialist Mark White.

Never mind aerospace — automotive aluminum looks like the place to be!

–Stuart Burns

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