Materials Research at Alcoa

Extract

The competitive forces that have dominated the aluminum industry over the last decade are similar to those in many other industries. New international competitors, driven primarily by their ability to compete with long-standing U.S. producers on the basis of cost and quality, have made significant inroads into virtually all aluminum markets.

As more emerging nations, driven by the need to create jobs and hard currency rather than profits, entered the primary metal business and exported their output, ingot prices fell. Eventually, ingot became a commodity traded in the international marketplace, with metal prices no longer related to production costs.

While these structural changes in the worldwide aluminum industry are of great concern (particularly in the United States), by no means do they signal the light metal's demise in the materials marketplace. What they have done, however, is to provide the impetus for the development and pursuit of economic and technical strategies designed to ensure long-term, profitable growth.

By the beginning of the 21st century, most monolithic metals will be firmly entrenched as commodities. This will solidify emerging nations as key producers, based upon their access to raw materials, less costly labor and energy resources, and subsidized capital. The ability of companies like Alcoa to compete in this commodity marketplace will be based upon their ability to reduce manufacturing costs and provide technically-based product differentiation, primarily via quality control, through new and improved processing technologies.