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Alcoa, one of the largest aluminum producing mills, has reported a larger than predicted first quarter profit. From an article in The New York Times, Alcoa’s profits are up from 9 cents a share in 2012 to 13 cents in 2013. The production mill also expects more growth in 2013, predicting a 7% increase in the demand for aluminum.
Over the last 10 years, Alcoa has changed its business focusing more on production parts for industry rather than mining and refining. How is this benefiting the company? With the high demand today for lighter and more fuel efficient vehicles, more components are being produced in lighter weight aluminum rather than heavier steel parts. As a result, more aluminum is needed to fulfill the requirements of the aerospace and automotive industries. The market for lighter weight materials is increasing.
The Boeing 787 Dreamliner is currently utilizing 20% aluminum in its construction, as well as titanium, for its lightweight properties. In the automotive industry, the 2011 Ford Shelby GT500 utilizes a 5.4-liter, V8, 550 horsepower, aluminum engine, reporting a 102 pound decrease in weight and an additional 10 horsepower over its predecessor. Some drivers expect that a heavier vehicle will withstand more punishment in a crash, however a lighter vehicle will be able to stop more quickly, avoiding the accident altogether. There are good points on both sides of the argument. As more manufacturers start utilizing lighter weight materials, how will this impact your industry?
How will this impact the metals industry? Growth in aluminum products may be on the horizon. Are you seeing trends that aluminum sales are on the rise? The automotive and aerospace manufacturers may have newer vehicles in that utilize more and more lightweight materials like aluminum and titanium in their construction. This may be advantageous for some commuters paying a premium for heavier luggage at check-in for flights, or the transportation industry charging more and more for fuel surcharges.
