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Sector
Basic Materials
Size
Large Cap
Market Cap £9.49bn
Enterprise Value £14.46bn
Revenue £16.53bn
Position in Universe 54th / 3176

LMEWEEK-Auto sector to drive continuing aluminium demand -Novelis

Thu 2nd November, 2017 1:37pm
* Novelis expects strong demand for rolled aluminium in 2018 
    * Says electric cars will increasing aluminium use 
    * For Reuters coverage of LME Week, click on  urn:newsml:reuters.com:*:nL8N1N520D 
 
    By Michael Hogan 
    HAMBURG, Nov 2 (Reuters) - Global demand for rolled 
aluminium products is expected to remain strong in next year 
thanks largely to the automotive sector, leading producer 
Novelis  NVLX.UL  said on Thursday. 
    The trend towards electric cars is also likely to increase 
the aluminium content of vehicles as carmakers seek to maximise 
battery range, said Emilio Braghi, senior vice president and 
Europe president at Novelis, the world's largest maker of rolled 
aluminium products. 
    "We expect our auto shipments to continue to grow as 
customer demand remains strong and current demand outstrips 
supply," Braghi said in an LME Week interview. "In total our 
automotive sheet shipments were up 16 percent in the first 
quarter of our fiscal year 2018." 
    "Sales of new vehicle models containing Novelis aluminium, 
including the Ford F-150 pick-up truck, have been very strong. 
In North America, production of the new 2017 Ford Super Duty 
series of trucks was ramped up successfully." 
    United States-based Novelis delivered 785,000 tonnes of 
rolled products worldwide in its financial first quarter, up 4 
percent year on year, including the 16 percent rise in 
automotive deliveries. 
    In Europe, it has production and recycling operations in 
Germany, Italy, Britain, France and Switzerland.  
    In 2014 Novelis opened a $258 million aluminium recycling 
plant in Germany to produce an annual 400,000 tonnes of 
aluminium from scrap. In 2015 an additional production line was 
opened in Germany, producing up to 240,000 tonnes of aluminium 
sheet a year for the automotive industry. 
    "Our additional capacity in Germany is poised to meet 
increasing demand from Jaguar Land Rover following the rapid 
growth in sales of new aluminium-intensive vehicles, including 
the new F-PACE sports utility vehicle," Braghi said. 
    "In China, increasing local demand for customers like Chery 
JLR and FAW-VW will drive shipment growth over the next several 
quarters out of our facility in Changzhou." 
    Novelis, a unit of India's Hindalco Industries  HALC.NS , 
expects electro-mobility to create more demand. 
    Significant steps are being made in increasing the number of 
electric vehicles, which will require large amounts of aluminium 
to meet production goals, Braghi said. 
    "An important launch is the first electric model of Jaguar 
Land Rover, the I-PACE. Novelis will also supply Chinese 
electric vehicle manufacturer NIO with structural components for 
its aluminium-intensive electric SUV." 
    Elsewhere, growth in demand for can production is strongest 
in developing markets, but aluminium continues to gain market 
share in established regions including Europe. 
    "Despite good demand and the sophistication required to 
produce can sheet, maturing markets are quite competitive," 
Braghi said, identifying excess capacity, imports from Russia 
and Asia, economic weakness and geopolitical instability among 
the key challenges. 
 
 (Reporting by Michael Hogan; Editing by David Goodman) 
 ((michael.j.hogan@thomsonreuters.com; +49 40 419 03 4275; 
Reuters Messaging: 
michael.hogan.thomsonreuters.com@reuters.net)) 
 
Keywords: METALS LMEWEEK/NOVELIS
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