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Mitsubishi Materials to roll out automotive aluminum in the US

Monday, Sep 18, 2017

Japanese company seen investing up to $360m in local production capacity.

Mitsubishi Materials is exploring a partnership in aluminum production?for cars in the U.S., the company announced Friday, as automakers demand lighter materials to make vehicles that meet stricter emission standards.

The Japanese group is expected invest up to 40 billion yen ($360 million) in rolled aluminum production for heat exchangers, a cooling component for engines, in the U.S.

Tokyo-based unit Mitsubishi Aluminum and?Sweden's Granges,the world's top rolled aluminum supplier for heat exchangers, are in the final negotiations on establishing a U.S. joint venture in 2018. The two seek to create an integrated production base handling everything from the base material to the finished product by 2021.

Granges already has plants in the U.S., China and Sweden. Mitsubishi Aluminum will either make a capital investment in Granges' current U.S. factory or the two will jointly build a new facility.

California and other U.S. states are adopting zero-emission vehicle rules requiring automakers to sell a certain proportion of cars that do not emit greenhouse gases. In response, automakers are increasingly using exterior panels made of aluminum instead of heavier steel, the traditional material for vehicle bodies. This trend has stretched the supply of aluminum sheet available for smaller auto components.

Alcoa, Novelis, Japan's UACJ and other major aluminum rollers have announced fresh capital investments in the U.S. Autoparts makers have been calling on Mitsubishi Aluminum to produce sheet for parts like heat exchangers since much of the material is now going toward hoods, roofs and other big structural components.

Automakers have moved to ramp up production in America since President Donald Trump took office, as evidenced recently by Toyota Motorand Mazda Motor joining forces to build a new U.S. factory. The Trump administration's protectionist bent has also made it difficult to import Chinese-made aluminum products to the U.S.

Mitsubishi Materials eventually hopes to acquire licenses to Granges' Chinese and Swedish factories in order to establish a global supply network.

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