ATLANTA Japanese titanium
sponge producers, caught between high feedstock prices and
titanium markets that have fallen below expectations this year,
are shifting toward lower-grade feedstock in an attempt to
reduce their costs, according to the president of Osaka
Titanium Technologies Co. Ltd.
Shozo Nishizawa, who also is
president of the Japan Titanium Association, told the
International Titanium Association conference in Atlanta that
Japans sponge industry has shifted from using only
high-grade titanium dioxide (TiO2) in 2010 to approximately
50-percent mid- to low-grade TiO2 to produce sponge in
"Until 2010, Japanese producers
were using high-quality feedstock," Nishizawa said, referring
to titanium dioxide with a purity of 94 to 96 percent. "But
since 2012 we have been making great efforts to adapt
facilities for low- and middle-quality feedstock," resulting in
TiO2 with 90- to 92-percent purity.
Starting in 2011, certain
high-grade feedstock prices have skyrocketed for Japanese
producers, the single-largest source of outside sponge for U.S.
titanium mills, accounting for a little over half of total
sponge imports in the second quarter of this year, according to
the U.S. Geological Survey.
At least one Australian producer
of high-grade rutile and synthetic rutile raised its prices by
70 to 90 percent in the second half of 2011 and the first half
of 2012, although most observers dont believe any
subsequent increase, if it occurs, will match those hikes.
Henry Seiner, vice president of
planning and materials for Titanium Metals Corp. in Toronto,
Ohio, noted at the conference that different grades of
feedstock have "appreciated at different rates" over the past
three years. High-purity feedstock is up four to five times
while "less-pure" grades such as slag are up three times, he
Along with Toho Titanium Ltd.,
Osaka Titanium is one of Japans two major sponge
producers. The countrys sponge capacity has jumped to
nearly 70,000 tons this year from just over 40,000 tons in
2009, according to Nishizawa.
However, he said shipments by
the countrys producers of titanium mill products, which
were up 40 percent in 2011 due primarily to heavy demand from
desalination projects, have been down "sharply" this year from