Rusal Situation Helps Strengthen Steel in Automotive Industry

For decades, aluminum has fought an epic battle to remove the dominance of rolled steel from the automotive industry.

Sharp demand for more fuel efficient vehicles has helped lighter metals gain market share - despite their higher cost. But recent gains of aluminum this month have been threatened by a supply shock caused by US sanctions against United Co. Rusal.

“We as an industry have to think about how we are solving this problem when we can squeeze one source so quickly,” said Rob Van Gils, CEO of Hammerer Aluminum Industries Holding Gmbh, which squeezes aluminum for automakers. "The risk is that in cases where there is competition between aluminum and steel, buyers will say we should choose steel because it is more reliable in supply, it is more reliable in price."