Tata Steel's plans for marketing a new ultra-high strength steel for the automotive industry gained impetus on Wednesday after a European patent court revoked a rival's patent.

Tata Steel will be able to bring ZnX — a press hardened zinc-coated boron steel sheet — “a non-corrosive, high strength steel product to market after the European Patent Office in Munich's Court of Appeal revoked a patent held by a rival steelmaker last week,” the company said on Wednesday. Development of ZnX is already well under way, enabling the company to kick-start the marketing process, and work with automotive customers on the use of the product.

“Trials of ZnX to date have proved promising and we believe the product represents a significant step forward in our ambition to offer next-generation materials for car body engineering,” said Mr Jaap Piso, Tata Steel's Automotive Sales and Marketing Director. Environmental regulations have piled pressure on the automotive steel industry to find lightweight ultra-high strength products amid growing competition from other products, including aluminium and plastic.

To regain lost ground

The development of the ultra lightweight steel products helps steel producers regain ground lost, in particular to the aluminium industry, says Mr Chris Houlden, principal consultant at metal and mining consultancy CRU. According to Mr John Anton, Director of the steel team at IHS Global Insight, such products could be the spur needed to raise the margins for the automotive steel industry.

“Sheet steel for the automotive industry had been a high margin product but in the last seven or eight years that hasn't been the case and you've seen similar prices as for construction grade steel,” he says.

Tata Steel and an un-named group of steel producers filed the case back in 2006. The company, which will produce the steel at its European operations, will hope to bring in new customers, in addition to those it already serves.

The implication of the patent ruling on Tata Steel, would be visible when one sees “the contribution of high strength steel sales in its revenues, which is very low at the moment”, an official with a Mumbai-based brokerage said. High strength steel (such as the ZnX alloy) can go into multiple applications, a sector analyst, added.

“As we go forward, high strength steel will become very important. To meet safety requirements, the conventional way would be to increase weight by using thicker steel gauges, but high strength steel helps in making components stronger while reducing weight at the same time,” said Mr I.V. Rao, Managing Executive Officer Engineering and Head of Research and Development of Maruti Suzuki.

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