U.S. Steel bidding war shines light on scramble for electrical steel

Gaining auto business with electrical steel could be crucial for steelmakers since they might lose business to aluminum companies as electrification ramps up.

The fight between aluminum and steel is the automotive industry’s new grudge match.

The amount of aluminum in vehicles is expected to surge, according to a study conducted by consulting firm Ducker Carlisle for the Aluminum Association, which represents U.S. aluminum producers.

EVs are driving much of the growth since aluminum is lighter than steel, making it an attractive alternative for automakers looking to shed weight and boost battery range. The study found that the average battery-electric vehicle in 2022 had aluminum content of 885 parts per vehicle, 85 percent more than other models and up from 643 parts per vehicle in 2020.

The authors of the study expect housings for batteries, e-motors and e-drives to generate continued growth in the decade ahead.

“Our industry is making major bets that the total volume of aluminum is going to go up in the automotive fleet” as electrification accelerates, Aluminum Association CEO Chuck Johnson told Automotive News.

According to the association, aluminum companies have invested about $9 billion in domestic manufacturing since 2013 — driven in large part by a sharp rise in demand from the auto industry. That includes Novelis Inc. in 2022 committing $2.5 billion to build a recycling and rolling plant in Alabama.

It even includes Steel Dynamics Inc.’s plans to spend $1.9 billion to open a flat-rolled aluminum mill in the southeastern U.S. Rising demand from the auto industry in part drove its investment, the company said.

“We haven’t seen a new rolling mill in North America of this type since the early 1980s,” Johnson said.

“Those are going to be the huge mills that will be supporting the manufacturing of products that will be important to the auto industry in the future.”

These commitments are putting pressure on the steel industry to maintain its dominant position in automotive by investing in lighter products, including electrical steel that’s crucial for e-motors.

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