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High-performance alloy markets gather speed

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It is a time of great import for the high-performance light metals alloys market. The breakneck speed of development in this arena raises numerous issues at the easiest of times, but the stakes are higher now. Aluminium alloys are competing with other materials to keep or earn their share in a more sophisticated and increasingly differentiated market where buyers are demanding greater performance from a more specialized product. And at a time when security of supply is crucial to maintaining the image of a preferred supplier to aerospace and other high-value industries, the underlying primary aluminium market has become more uncertain than ever.

Investment decisions are already fraught with risk in this area. Millions of dollars could be spent on research and development, and millions more on bringing a new alloy to market, only for that product to be swiftly rendered obsolete by the latest advance in carbon fibre production or additive manufacturing (3D printing). There is no standardized product at the frontier of high-performance alloys and there are many companies creating new types of stronger, lighter alloys all the time, while their marketing departments scramble to ensure that their particular alloy is the one to be chosen for the body of the next big-brand automobile model or structural part of the next generation of aircraft.

Major rewards

The rewards for coming out on top can be lucrative. The decision by Ford to switch the body of its F-150 pickup truck to aluminium alloy from steel for its 2017 model was a major boon to the 60 million-plus-tonne global primary aluminium market and has shown the impact of such decisions among the major car manufacturers. All of them are looking at ways to make their cars more efficient to meet increasingly stringent environmental regulations, and light-weighting remains the most practical way of dong that. Every time a major auto manufacturer updates one of its models to become more efficient it provides an opportunity to producers of high-performance light metal alloys, as Mercedes-Benz did when it chose Constellium’s Surfalex alloy for the body of its new CLS model launched this year.

In the aerospace sector, many companies are developing new alloys to provide stronger, lighter parts to aircraft manufacturers, and the prospects are good. The International Air Transport Association (IATA) forecast in October last year that the number of annual air passengers will almost double to 7.8 billion by 2036 from about 4 billion in 2017, based on an average compound annual growth rate (CAGR) of 3.6%. More than half of the new passengers will come from China. Routes to, from and within that region will see more than 2 billion more annual passengers by 2036, up from about 1.5 billion last year. That region’s annual average growth rate of 4.6% will only be the third-highest however, behind Africa and the Middle East.

“All indicators lead to growing demand for global connectivity. The world needs to prepare for a doubling of passengers in the next 20 years. It’s fantastic news for innovation and prosperity, which is driven by air links. It is also a huge challenge for governments and industry to ensure we can successfully meet this essential demand,” Alexandre de Juniac, IATA’s CEO, said in a statement.

That will mean a lot of new planes. The world’s commercial aircraft fleet grew by 4% in 2017, to more than 31,000, while the backlog of orders for new aircraft reached more than half of that over nearly ten years. While much of that backlog will probably only sparingly feature new high-performance alloys, such as aluminium-scandium compounds, the future beyond is more open.

For more established aerospace alloys the immediate forecast is rosy. Titanium alloys manufacturers are seeing very good demand levels, having grown rapidly over the last ten years with the increase in air travel. While titanium alloys and carbon- fibre usage is expected to grow further, from their current levels of about 14% and 6% of the average commercial aircraft’s weight, respectively, the use of aluminium alloys is expected to dip slightly from about 48% today.

“Titanium is seeing strong growth that has correlated closely with the growth in carbon fibre,” noted Bill Bihlman, president of US aerospace consultancy Aerolytics. Materials research house Roskill has forecast that magnesium demand will grow at a CAGR of 3.6% to 2020, citing the long-term potential for the development of magnesium metal alloys with denser, more uniform structure, leading to lighter and stronger parts.

But the cost of developing these new alloys and products is formidable, and price will be a crucial factor in which materials the aerospace and other industries decide to adopt. How best then to harness this opportunity? In the fightback against carbon fibre, how do high-performance aluminium, magnesium, titanium and scandium alloy producers create affordable products that nevertheless justify the huge capital costs of development over the lifecycle of their application?

Collaboration and partnership

One answer may lie in collaboration with their industry peers on research and development – a growing trend in high-performance alloys, particularly with a view to supplying the aerospace industry’s expected growth. The ripest area for such development is the manufacture of alloy powders to be used in 3D printing processes, or additive manufacturing. This technology has swiftly advanced from the prototype stage to becoming a viable production method. In September last year the alloys producer Arconic, spun off from Alcoa in 2016, produced its first 3D printed titanium part to be installed on a commercial aircraft, produced at its additive manufacturing plant in Austin, Texas. BMW also recently printed components for a motorbike.

In April this year, a group of companies led by aerospace components manufacturer Aeromet, and including Rolls- Royce, secured funding from the National Aerospace Technology Exploitation Programme to develop advanced aluminium powders for additive manufacturing. Such partnerships are becoming common. UK-based LPW Technology, another powder producer, formed a strategic partnership in November with 3D printer Airbus APWorks, to supply aluminium-magnesium-scandium alloys to the aerospace sector. Metal powders manufacturer Metalysis has launched research and development programmes with international partners at its research centre in Sheffield, UK, since that facility opened in March last year. The programmes will focus on creating high-value aluminium-scandium alloys to offer light-weighting and strength solutions to the aerospace and automotive industries.

In some markets the trend towards partnerships is not confined to the top of the value chain. In the current quarter, Scandium International, owner of the Nyngan scandium project in New South Wales, Australia, has signed letters of intent for the testing of scandium alloys with casting specialists Eck Industries in the USA and Grainger & Worall in the UK. Earlier this year the miner also signed similar agreements with a host of other alloys producers, including Gränges AB in Sweden and OHM & Hainer in Germany. The point is to show the benefits of aluminium-scandium alloys, create the demand, and lower the costs for everyone involved.

Scandium has not generally been mined historically – rather it has been extracted mainly as a by-product in the mining of iron and other metals, mostly in Russia and China. It is very much a high-value, low-volume product, with a market size of less than 50 tonnes per year. The benefits of small quantities of the metal in an aluminium alloy are high, providing among the biggest increases in tensile strength per atomic percent of all alloying metals.

But the supply picture is changing with the development of Scandium International’s Nyngan project, as well as the Syerston mine owned by Clean Teq, and the Owendale project being developed by Platina Resources. These three projects have the potential to supply several times the current world demand for scandium, so proving the worth of aluminium-scandium alloys as an essential material for the future of aerospace and automobile manufacturing is crucial. There is a great deal of enthusiasm over these new types of alloy, but there is still plenty of scope for potential consumers to show more interest in their adoption.

Multiple challenges

Collaboration between companies in the value chain for such a specialised metal can help to keep costs under control, but it is also very useful in maintaining the technological edge. Many of the partnerships mentioned have the specific intent not just of lowering costs, but of finding the right alloys to stand above the competition, both within the alloys market and among competing materials industries.

“There has been a lot of work done on qualifying new alloys, but these companies cannot rest on their laurels,” Bihlman said. “Aluminium-lithium alloys, for example, are now a viable alternative to carbon fibre, for selected applications, but they
are still considered too expensive.”

The challenges are numerous, and not confined in source to the competition. High-performance alloy producers also have to deal with the problems that they inherit from their raw material suppliers, caused by unpredictable base prices and sweeping government trade action.
Security of affordable supply may become among the biggest challenges for alloys producers should the current trend in government trade action continue. The global aluminium market is facing huge uncertainty following the United States’ Section 232 import tariffs on the light metal and sanctions affecting UC Rusal.

“The 232 tariffs in the US may not have had a huge impact, but sanctions would be a different matter,” Chris Bayliss, deputy secretary-general of the International Aluminium Institute, said. 

Aluminium prices reached a six-month high following the imposition of the US sanctions in April. European diecasting aluminium alloy prices rose at the same time, to their highest prices since March last year. A curious impact of the current uncertainty over trade action is that primary aluminium and aluminium alloy prices are moving in unison, which has rarely been the case in recent years. The 232 tariffs could well have further implications though, with Turkey’s economy minister, Nihat Zeybekçi, hinting at measures to counter the tariffs earlier in May, and some now suggesting that China’s export tariff on aluminium could be removed in response.

All of this will threaten the security of affordable supply levels for high-performance aluminium alloys producers at a time when no new primary production is being built in western markets and much of what there is has been earmarked for more high-volume industries.

“For a low-volume, high-value product, where do you come in the queue?” Bayliss said. “The resilience of the supply chain has become limited. This was unforeseen, and customers are becoming wary. We will see the automotive companies asking more questions.”
“The industry is concerned. Those with exemptions could take advantage –potentially some Gulf producers – but it would still be damaging to the market in the long term.”

The CAFE standards governing automobile efficiency in the USA could also come under the scrutiny of the Trump administration. Should they be relaxed, cheaper and heavier steel might rob much of the light metal alloys’ forecast demand in that market.

Conclusively, then, the price and supply of raw materials for high-performance light metal alloys producers, as well as the demand for their products, are all being threatened by an increasingly unpredictable political system. 

But through all the present market murkiness, the future for high-performance light metal alloys is bright. Convincing major producers with few competitors to adopt new and expensive materials is hard, and so is getting them to adopt your particular new and expensive material. But as the number of people using planes and cars around the world continues to rise, so will the pressure to find more environmentally friendly solutions. If producers can develop the right alloys and control costs sufficiently to entice their further adoption, the coming generations of
planes and cars could transform this industry.

Written By Jethro Wookey

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