At the time when the use of aluminium was restricted to marquee models in the stable of Audi, Jaguar Land Rover and Mercedes Benz, steelmakers were smug in the belief that the white metal would find fringe application in cars. They had no forebodings of it facing serious competition in its long-held exclusive domain of the world automobile industry. It is, however, not that leading steel companies like ArcelorMittal, Nippon Steel and Posco were not engaged in developing flat steel, used in making car body, thinner and lighter but stronger. All that was, however, done under pressure of car companies, which are required by law in the US, European Union and Japan in varying degrees of severity to improve fuel efficiency of vehicles and cut their carbon footprint on an annual basis.

Besides bringing about improvements in car engine efficiency, the other mantra for making vehicles increasingly environment friendly is to reduce their weight. This is where steel started getting challenged by a lot more expensive but light in weight aluminium in automobile application. As it is to be, in the progressively intensifying scrap over positives of the two metals, the steel brigade is led by Lakshmi Mittal, chairman of the world’s by far the largest steel producer ArcelorMittal. Seen as the bellwether of the world aluminium industry, Alcoa of the US is ever on alert to counter steel’s claim to superiority on grounds of safety, endless recycling possibility and superior life cycle approach (carbon emitted from the point of metal making to its uses and finally to its recycling) compared to other metals.

Transportation is inviting increasingly greater attention of the authorities in developed and emerging countries because the sector is found to be a major source of environmental degradation. For example, in the US transportation, principally cars, is found to be the second largest source of carbon emissions behind power plants. The situation is no different in EU. Globally transportation accounts for approximately 25% of energy demand and 61.5% of all oil used yearly.

The past one decade has seen an explosion in car use in China principally and also in India and Brazil earning for emerging nations the dubious distinction of becoming the ‘epicentre of global air pollution’. Five years ago, China became the world’s biggest auto market leaving the US behind. Even while economic growth in China has slowed, auto sales there grew 14% in 2013 to over 20 million units. Indian annual car sales have remained around two million units. However, German consulting firm Roland Berger Strategy has forecast that Indian car demand will from here record a compound annual growth of 12% to 5 million units by 2020.

A less known fact is global air pollution, for which CO2 emissions by vehicles are a major contributory factor, along with obesity, has emerged as the fastest cause of death. The US regulations are obliging carmakers to almost double their vehicles’ average fuel economy from 27.5 miles per gallon in 2012 to 54.5mpg by 2025. The European Commission in its turn has put in place a more stringent and comprehensive legal framework to reduce CO2 emissions. Law requires manufacturers to ensure that by 2021 cars use 4.1 litres of petrol or 3.6 litres of diesel to run 100km and their carbon emissions restricted to 95gms a kilometre by 2021.

However, in spite of the EC going all out to control lethal air pollution, it is found to be the cause of 400,000 premature deaths in Europe each year. China, which claims to be trying hard to rid itself of polluting industrial units, loses around 500,000 lives each year to the ‘airpocalypse,’ a new coinage for killer air pollution.

Steel Authority of India chairman Chandra Shekhar Verma says the “nirvana” for the automobile industry coming under increasing glare of governments and environmentalists is to go on taking out weight from vehicles by using metal which is “light but strong.This holds good for new generation steel.” Mittal will not accept aluminium is “invariably lighter than steel.” The problem, according to him, is the aluminium industry will conveniently be referring to sets of “outdated data” to give advantage to the white metal. But aren’t there forms of steel which can compete with aluminium on weight? In a statement more in the nature of disabusing aluminium’s claim as the fast emerging favourite metal for automakers, Mittal says “steel can provide all the weight reduction that auto producers require to satisfy the new fuel efficiency standards, for all types of vehicles. Essentially we need to deliver a 25% reduction in the weight of structural components and closures, in other word the body-in- white (BiW). Steel can already do this, and we can do it in a more cost effective and environment friendly manner than any other material.”

Whatever the assertions, the proof of the cake is in eating. Claims that steel can match aluminium in every way are in evidence at the 5.3 million tonne steel finishing mill at Calvert in Alabama which ArcelorMittal in equal partnership with Nippon Steel & Sumitomo Metal Corporation bought from ThyssenKrupp in February. Equipped with new generation finishing technologies, the Calvert mill is rolling out steel much more thinly than was thought possible earlier while retaining its strength. No matter that automakers are working with special steels “ten times stronger than mild steels” in use a few years ago. The Financial Times has quoted Alcoa saying that aluminium has “physics on its side. We’re one-third the density of steel and we can be equally strong. Steel folks are certainly investing a lot of money and they are certainly a formidable competitor. But at the end of the day they can’t change the destiny of the material they’re working with.” A factor that may tilt the balance in favour aluminium is that for the pickup sector fuel economy rather than payload is becoming prime focus for manufacturers.

Aloca’s is not the lone constituent in aluminium industry in believing that steel’s application in automobile has “reached a point of diminishing return.” The US based consulting firm Ducker Worldwide says 18% of all vehicles will have all- aluminium bodies by 2025 compared with less than 1% now. In no way this is a farfetched forecast. Ford launching all aluminium body F-150 pickup in 2015 and General Motors’ aluminium- bodied versions of Chevrolet Silverado and GMC Sierra to hit the road in 2018 come as warnings that the white metal are to make incursions in kinds of vehicles which steelmakers believed will always remain their sole preserve. Ford claims switchover to aluminium has led to light weighting of F-15 by 318 kg. GM is hopeful of securing more weight saving by welding panels together instead of riveted and bonded aluminium panels in F-15 of Ford. Alcoa and Novelis will stay in forefront as suppliers of body sheet to GM and Ford. In fact both are investing heavily in R&D and manufacturing facilities in anticipation of automobile industry’s growing appetite for aluminium.

Hollywood stars keen to be seen as environmentally conscious must have the $70,000-and-up electric Tesla cars with aluminium-intensive construction. Principally for their low greenhouse gas emission, electric cars are finding increasing favour in developed economies and also in China where city air quality is compromising people’s health. Electric car sales target for China are over five million units by 2020, which would account for about one-seventh of all vehicles to be sold by then. Here is a point of concern for steel. Electric cars are heavy users of aluminium. Therefore, rises in electric car sales will leave an impact on auto steel demand growth.