By Amanda Cooper
LONDON, Oct 25 (Reuters) - Aluminium demand from aerospace will expand rapidly over the next 20 years, but the motor industry will keep its place as the key outlet for the metal, analysts said on Friday.
French aluminium producer Pechiney told journalists at a briefing this week that it saw aerospace demand rising by some five percent a year over the next two decades.
Changes in aircraft assembly have raised the average amount of aluminium in a commercial airliner to around one tonne per seat from some 450 kg 10 years ago.
Aluminium makes up around 80 percent of the unladen weight of the average jumbo jet.
But analysts said aerospace demand accounted for only a small fraction of yearly aluminium consumption of 25 million tonnes.
"In terms of volume, aerospace is a relatively small portion of aluminium demand but in terms of value it is disproportionately high," Martin Haller, senior aluminium analyst for UK-based analyst group Brook Hunt, said.
"It is important in terms of margins for producers but it won't determine the overall strength of the aluminium market."
TRANSPORT KEY
Transport, including motor vehicles, makes up more than 30 percent of annual aluminium consumption, but aerospace accounts for just one or two percent of this demand.
Adam Rowley, metals analyst with Macquarie Bank in London, said: "In terms of overall metal demand, in terms of volume, it's not that big. But, obviously, it's seen by the producers involved as a higher-margin, niche business."
"The big-volume industries will remain the auto and construction markets," he added.
Brook Hunt's Haller said: "One of the great hopes of the aluminium industry is the aluminium auto-body car."
Tougher regulations on engine emissions have prompted auto manufactures to try to reduce the weight of vehicles, so cutting back fuel consumption, by using more aluminium rather than steel.
Pechiney has already entered into long-term supply deals with some of Europe's major manufacturers, such as Peugeot Citroen , Renault and Mercedes Benz, a subsidiary of DaimlerChrysler AG .
Pechiney Chief Financial Officer Oivier Mallet said his company expected aluminium demand in the auto industry to rise strongly, with the aluminium content of cars forecast to increase by more than 50 percent in the next three years.
"(Use of) aluminium is progressing instead of steel year after year in European car models. The average weight of aluminium in a car is, as of today, around 80 kilos and it should increase to 125 kilos by 2005," Mallet said.