Steel Demand by Automobile Sector to Witness Drastic Decline

SEATTLE (Scrap Monster): The quantity of steel used in automobiles is expected to drop sharply over the next two decades, said a latest report published by the Center for Automotive Research (CAR). The drive to lightweight vehicles will see increased replacement of steel with lightweight alternatives including aluminum and plastic.

The report stated that the total use of steel in cars may fall from 65% of total curb weight in 2020 to almost 46% in 2040. The most impacted steel category will be mild steel and high strength steel, whose use is predicted to fall from 40% of total curb weight to as low as 9% over the next two decades. Also, between 2020 and 2025, the steel use is predicted to fall by 5%.

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The recent data published by the American Iron and Steel Institute (AISI) indicates that the U.S. steel mills shipped 16.8 million short tons of steel to the country’s automobile sector towards manufacture of vehicles and vehicle parts during the previous year. Going by CAR forecasts, these shipments could drop to 11.89 million short tons by 2040.

The direct beneficiaries of the fall in steel use will be aluminum and plastics. Incidentally, alumnum’s share will almost double to 26% of total curb weight by 2040. Similarly, plastics’ share will touch 15% by that time.