The National Post is Canada’s second largest national paper.
After several years of turmoil, the North American aluminum industry may have found its saviour in Ford Motor Co.’s new F-150 — arguably the biggest thing to happen to the metal since Coke and Pepsi ditched steel cans in 1967.
“When cans transitioned to aluminum it was the beginning of a new era for the industry,” said Gervais Jacques, chief commercial officer at Rio Tinto Alcan, which sells aluminum to General Motors Co., Honda Motor Co. and Tesla Motors Inc. “This is to the same extent.”
Like many other metals, aluminum prices plunged at the start of the financial crisis in 2008. Several aluminum makers were forced to dramatically curtail production in response to a collapse in global demand and an increase in Chinese production that they had dramatically underestimated.
Rio Tinto Group Plc, the global miner that bought Montreal-based Alcan at the height of the market in 2007, has been forced to take US$25-billion worth of writedowns on that acquisition — more than two-thirds of the US$38-billion it paid for the takeover. But aluminum’s troubles may be over, thanks to the aluminum-bodied F-150 and the potential for many other vehicles like it.
One company that sees a massive opportunity arising from the auto industry’s new taste for aluminum is American Specialty Alloys Inc. Earlier this week, the little-known company announced plans to build a US$1.2-billion aluminum plant in the southeastern U.S. — a huge investment by any standards, made more remarkable by the fact that it will supply only the auto industry.
It’s a big vote of confidence in aluminum’s future as the new F-150, the industry’s first mass-market aluminum-bodied vehicle, starts shipping to dealers.
The ASA plant is expected to produce 600,000 tons of flat-rolled aluminum per year by the time it’s fully operational in 2017 — enough to build more than one million F-150s. This will roughly double the U.S. industry’s capacity of automotive grade aluminum.
“I serviced the automotive industry for around 21 years and had a lot of deep relationships with the auto [manufacturers], so we had some early intimations of the switch into aluminum from steel,” said Roger Boggs, founder and CEO of American Specialty Alloys.
For the rest of this article, click here: http://business.financialpost.com/2014/11/22/the-next-pop-can-how-fords-new-f-150-is-changing-the-aluminum-industry/