China’s automotive aluminium alloy market to grow at 20% over 2014-18

Lightweight materials are the key components for making lightweight vehicles. Currently, majority of lightweight vehicles that are being manufactured contain materials such as high-strength steel, plastic and composites, carbon fibre, magnesium alloy, and of course, aluminium alloy. Among them, although the percentage contributed by aluminium alloy in vehicle making is still low at around 8%, recent tie ups with aluminium behemoths like Alcoa and Hydro with leading automakers suggest that it will soon go up in the near future.

In terms of weight, body, powertrain and chassis system together occupies almost 60% of a vehicle. Body, especially, shares more than 20% of the total weight of the vehicle. So, it remains the main target for reducing weight and a key application area for automotive lightweight materials.

Aluminium and aluminium alloy are currently the materials of choice for the global lightweight automotive industry players. Currently, they find wide application in auto parts like wheels, engines, heat exchangers, turbochargers and gearboxes.

However, there are rather high technical thresholds in the field of aluminium alloy automotive sheet in China. Chinese aluminium alloy processing enterprises are not at par with the global companies in terms of technology expertise, and they mainly target popular economical cars and has limited demand for aluminium alloy cars. Therefore, in the past few years, China's automobile industry has developed rapidly, while China's aluminium alloy automotive sheet industry has evolved slowly with the capacity growing sluggishly.

In 2014, automotive aluminium alloy consumption in China hit 300,000 tons. However, the demand-supply scenario of aluminium alloy automotive sheet in the country still stayed meek. The high-end mainstream market was primarily dominated by international big brands like Novelis, KOBELCO, and Aleris.

In October 2014, Novelis (Changzhou) flagged off operations at its 120,000 tonnes per annum capacity automotive aluminium sheet/strip project, taking China's automotive aluminium alloy sheet capacity to 185,000 tons. In the forthcoming quarters of 2015-2016 financial, KOBELCO, Aleris, Zhongwang Group and other companies will also put their automotive aluminium sheet projects in China involving over 400,000 tons; then China's automotive aluminium sheet capacity will reach 550,000 tons per annum. In the next few years, China's automotive aluminium alloy market size is expected to grow at a rate of about 20% in the wake of the enhanced trend of automotive lightweight.