Japanese Aluminium Companies Ramping Up to Capture Share in US Automotive Aluminium Market

Japanese Aluminium Companies Ramping Up to Capture Share in US Automotive Aluminium Market
Photograph of the west gate of Kobe Works, Kobe Steel (Kobelco) in Nada-ku, Kobe, Hyogo Prefecture, Japan. Source: Wikimedia

Japanese aluminium producers UACJ Corp and Kobe Steel are gearing up to meet an ever-increasing demand for the metal in the United States’ automotive industry, according to a recent article in Reuters. Detroit’s automakers are continuing to increase their use of aluminium in order to meet government environmental standards.

Japan’s biggest rolled-aluminum products maker UACJ’s new plant in Kentucky began test runs last month. The US$150 million plant, which is a joint venture with Constellium, has an expected nameplate capacity of 100 thousand metric tons.

“We are also considering an expansion of the joint venture with Constellium, possibly adding two more finishing lines to triple capacity to meet rising demand,” said Takayoshi Nakano, UACJ Senior Managing Executive Officer.

Nakano went on to say that his company aims to capture one-fifth of the US market in aluminium automotive sheet market.

“Our expectation is the trend in the U.S. and Europe to use aluminum for auto bodies and structural frames will eventually spread to other areas like China and Southeast Asia where we want to take the lead,” he said.

Kobe Steel is getting in on the act as well, announcing in May an investment of US$46.7 million in an aluminium plant in Kentucky for the production of vehicle frames and bumpers. The firm is also planning to open a plant for producing aluminium sheet.

“We are still looking to invest in the U.S. market to make aluminum sheets, although the timing is not known yet,” said Hiroya Kawasaki, Kobe Steel President, early last week.

Japanese steelmakers have close ties with the company’s automotive industry, making it difficult for aluminium producers to make inroads into the industry. As a result, Japanese firms plying their wares to North American automakers is an obvious choice. The Japanese automotive market is not completely closed off to aluminium, though – under pressure to cut weight in vehicles much like their Detroit cousins, Japanese automakers are expected to begin using aluminium for structural frames in 2020 or 2021.