ArcelorMittal, ANDRITZ in Auto Technology Tie-up - Analyst Blog

Steel giant ArcelorMittal MT said that its Tailored Blanks unit has joined forces with leading welding systems maker ANDRITZ Soutec to roll out laser welding technology globally. ANDRITZ Soutec specializes in laser and rolled seam resistance welding systems for a host of applications.

The collaboration will roll out a patented laser ablation technology developed by ArcelorMittal. This advanced technology is used to weld Usibor, a steel specially designed for hot stamping. The partnership will expand the availability of laser welding for hot stamping steels. Demand for hot stamping steels is on the rise as automakers look to reduce car weight and make them fuel efficient and safer.

ArcelorMittal's cutting-edge hot stamping products – Usibor and Ductibor – are delivered with an aluminium-silicon coating that protects car parts during heat treatment as well as against corrosion. But without laser ablation, the weld may become fragile and subject to corrosion.

In the laser ablation process, the aluminium-silicon coating is removed from the surface near the weld by vaporization utilizing the latest high energy lasers, and subsequently laser welded. ArcelorMittal's partial ablation process offers a superior weld and protection vis-à-vis other ablation technologies.

Hot stamping steel solutions are ideal to bolster the strength of steel to make thinner and lighter steel parts while sustaining or improving the same crash performance. Laser welded blanks (LWBs) help auto manufactures to make cars lighter and improve safety. LWBs and hot stamping are a perfect combination for lightweighting the most challenging car parts.

The hot stamped LWBs market is growing at a fast clip and, for the automotive industry, it is important to make sure that this technology is available globally. The collaboration between ArcelorMittal and ANDRITZ Soutec will allow an upgrade to the existing welding lines using the ablation technology licensed by ArcelorMittal.

ArcelorMittal is expanding its steel-making capacity and raw materials self-sufficiency through a combination of brownfield growth, new greenfield projects and acquisition opportunities, mainly in emerging markets. The company is also progressing with its mining growth projects and is on track to boost iron ore production capacity in its own mines to 84 million tons by 2015.

However, ArcelorMittal continues to grapple with challenging conditions in Europe. Recovery in the demand environment is expected to be sluggish in the region this year. The company is also exposed to volatility in steel pricing.

ArcelorMittal is a Zacks Rank #3 (Hold) stock.

Other companies in the steel and related industries with favorable Zacks Rank are AK Steel Holding Corporation AKS, United States Steel Corp. X and Worthington Industries, Inc. WOR. While AK Steel holds a Zacks Rank #1 (Strong Buy), both United States Steel and Worthington Industries retain a Zacks Rank #2 (Buy).