Aerospace buyers jockeying to ensure supply, prices when demand rebounds

Jan 01, 2010 | 09:55 AM |

The titanium market might not be headed for a quick turnaround, but large aerospace buyers are already set up to avoid the shortages and growing lead times that invariably accompany a surge in demand.

At the Aerospace Systems Sector of Los Angeles-based Northrop Grumman Corp., this has meant firming up its supply lines. Don Blue, the company's manager of airborne systems procurement, said that recently negotiated long-term supply agreements enabled the company's El Segundo, Calif., operation to lock in its price and assure "the availability of hardware."

John Miller, raw materials buyer at the Aerospace Systems Sector, said the current downturn left the market "glutted" with popular titanium alloys, which was a "good time" to establish extended supply agreements. The operation has signed five-year agreements with titanium mills before the next up-cycle begins, which Miller thinks might occur toward late 2011 through 2013.

There are currently a number of large aerospace programs on the "back burner" in terms of consumption, he said, pointing to various regional jet aircraft as well as the Lockheed Martin F-35 Joint Strike Fighter (JSF). Although not yet at full output, these programs nevertheless will be moving into early production phases as early as mid-2011, starting to chew up increasing amounts of metal. And there's also the impact of the new Boeing 787 Dreamliner, history's largest per-plane consumer of titanium. The time to team up with long-term supply sources is before all this occurs, he added.....





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