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YESTERDAY by: Michael Pooler
ArcelorMittal will launch a new high-strength automotive steel later this year, throwing down the gauntlet to its rivals in the race to make cars lighter.
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The world’s biggest steel producer by tonnage said that its new grade, called Usibor 2000, would be about one-third stronger than those currently available for carmaking.
“It’s lightweight because the material is so strong that you need a lot less of it to achieve the same functionality,” said Greg Ludkovsky, head of research and development at ArcelorMittal.
Tightening regulations on exhaust emissions in the fight against climate change are forcing automakers to improve their fleets’ average fuel efficiency. Alongside improvements in internal combustion engine technology and developments in electric vehicles, one of the main ways is by reducing mass.
While steel remains the material of choice in automotive, there is increasing competition from other substrates, such as aluminium and plastic composites, which can offer weight advantages.
This was illustrated when Ford switched to aluminium for the body of its 2015 F-150 pickup truck, the best-selling vehicle in the US for more than three decades.
ArcelorMittal said that for applications requiring complex shapes, its Usibor 2000 product would bring potential weight saving of up 10 per cent on the previous best steel grade. It is more than three times stronger than leading automotive aluminium alloys, according to the company. Launch is expected by the end of this year in Europe and mid-2017 in the US.
Many steelmakers are attempting to sell a greater proportion of premium grades as a way of resisting downward price pressures on bulk steels amid a global oversupply of the metal.
For ArcelorMittal, this is part of a plan to boost core profits by $3bn by 2020. The company resorted to a $3bn capital raise earlier this year to reduce its debt pile, after it posted a record net loss of $7.9bn following a collapse in steel and iron ore prices.
Carsten Riek, analyst at UBS, said it was unlikely that sales of the new Usibor product would boost overall profits at the group substantially.
One reason was that this kind of steel is a niche product typically only used in frame parts of an automotive body that prevent structural damage in crashes, rather than throughout an entire vehicle.
“It’s an interesting product but there always has to be a large benefit for carmakers,” Mr Riek added.