The Titanium Age Lower-cost processes, latent demand

Oct 01, 2010 | 06:53 AM |

The effects of the recession appear to be easing in the titanium industry, raising hopes of recovery. At the same time, new opportunities are presenting themselves that could lead to the availability of lower-cost titanium products in a number of applications previously priced out of titanium. Thus, the recovery may coincide with a somewhat transformed business landscape.

The titanium industry, like many others, was battered by the economic downturn. The faltering of the economy in late 2008 was preceded by a falloff in titanium prices well before, partly due to delays in titanium-intensive programs at Boeing Co. and Airbus SAS.

The onset of the recession merely exacerbated existing conditions in the aerospace sector, which initially declined more dramatically than other sectors and depressed scrap markets to the point that in some places alloy scrap was less expensive than CP scrap. Scrap became a very depressed market in the recession partly because prices were so low, leading some suppliers to choose to hang on to supplies until prices rebounded. This helped to slow down the plunge in scrap prices, a trend that was not duplicated in other markets, like melt products.

Prices overall continued their slide and have remained depressed. For some products, 2009 prices were nearly 80 percent below their 2006 highs. In contrast to 2007 and 2008, when titanium facilities were running at more than 90 percent of capacity, in 2010 those same plants have been running at roughly 65 percent of capacity and in some cases at less than 50 percent. Even in China, where capacity was expanding rapidly a few years ago, plans for new facilities have been scrapped and some existing facilities shut down.....

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