LOS ANGELES The spot
titanium market has failed to realize an anticipated mid-2012
upturn in demand and pricing, and few are willing to predict
when it could start.
Despite near-record airliner
production rates, a number of factors helping to keep a lid on
"We were ramped up earlier this
year to see a lot more business by this time than were
seeing today," one distributor said.
"There doesnt seem to be
much destocking going on," according to another market
Standard aerospace 6 aluminum/4
vanadium ingot has dropped by $1 per pound or more on the spot
market since late 2011 and into this year, and now stands in a
range of $10.50 to $11.50 per pound, market sources said.
Commercially pure Grade 2 plate for non-aerospace industrial
applications has also eased by about $1 per pound.
The failure of prices to
strengthen can be partially attributed to the combined impact
of declining requirements in the military sector and a
continuing overhang of the inventory that supports
Chicago-based Boeing Co.s commercial transport
Additionally, some people are
only now beginning to appreciate the continuing effect of
long-term supply agreements that have come to dominate an
increasing portion of titanium shipments. Pricing under these
contracts not only is typically less volatile than spot, but
also is based on raw material and economic indices that this
year have either barely moved or have softened.
Moreover, industrial activity is
also seen as quiet despite a hoped-for continuation of the
partial rebound in infrastructure business, particularly
desalination, that occurred in 2011.
"Inquiries are strong, but we
havent seen a lot of orders," one supplier to the
industrial sector said.
"For titanium people, the
industrial market just hasnt panned out the way they
expected," another market observer said.
Few are predicting a significant
pricing upturn. In May, Dawne S. Hickton, vice chair, president
and chief executive officer of Pittsburgh-based RTI
International Metals Inc., said that if pricing were to change
through the year, it would probably "moderate down