CHICAGO — A recent study by global market research firm Market and Markets found advanced-high strength steel accounted for $14.27 billion in sales worldwide in 2015, which is expected to grow to $21.17 billion by 2021.
Northwest Indiana steel mills have been cranking out more of the stronger metal so automakers can make lighter cars that release fewer emissions. Market and Markets forecasts an 8.2 percent compound annual growth rate over the next half decade.
The higher-value product has been supplanting traditional steel more and more, said Jody Hall, vice president of the automotive market for the Steel Market Development Institute, which recently sent a delegation to promote steel at the Chicago Auto Show. For example, the body structure of the new 2017 Chrysler Pacifica is made with 72 percent advanced high-strength steel.
Advanced high-strength steel provides superior performance, Hall said.
"It has the highest strength," she said. "So it provides mass reduction for the vehicles. It provides excellent durability and other performance characteristics and it has the highest value to the consumer. It's also the most sustainable."
Advanced high-strength steel and the steel industry generally face competition for automotive market share from aluminum and other alternative metals. The best-selling Ford F-150 recently switched to an aluminum body, and a Ducker Worldwide study found more than 75 percent of new pickup trucks may end up having aluminum bodies in the future.
The trade group Drive Aluminum estimates the use of aluminum sheet in vehicle bodies could skyrocket to 4 billion pounds over the next decade, up from 200 million pounds in 2012.
Steelmakers have been trying to preserve market share since automakers are some of their biggest customers. The American Iron and Steel Institute estimates the automotive market accounts for about 27 percent of overall steel use in the United States. Steelmakers have been developing stronger grades of advanced high-strength steel and touting it as stronger, cheaper and more environmentally friendly.
Advanced high-strength steel is the fastest growing material in automotive production, and it's exceeded industry forecasts by more than 10 percent for three years in a row, Hall said.
"People don't understand that steel is a new technology," Hall said. "We're accelerating innovation. There's a high performance, high value and high sustainability."
Much of the critical research and development that have turned the idea of lighter, stronger steel into reality is done right in Northwest Indiana at ArcelorMittal's Global R&D Center, in East Chicago. It then gets produced in local mills and delivered to automakers and others.
"We're replacing ourselves," Hall said. "We're replacing the old steels from the '50s, '60s, 70s and '80s with the new grades of steel. The automakers buy less of it and get better performance."
Automakers find it easier to design lighter vehicles with advanced high-strength steel, partly because it's five times stronger than the strongest aluminum available today, Hall said. Aluminum is also two to three times more expensive to produce than steel on a per pound basis.
"We've been communicating more over the last few years. People didn't talk about what their vehicles are made of a few years ago," she said. "But people are starting to talk about the environment and performance and safety and all that. People are recognizing that steel is not an old technology, that it's innovative."