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Industrial titanium use to remain flat: Dussart

Keywords: Tags  titanium, Valtimet, Gilles Dussart, Vallourec Group, Allegheny Technologies, industrial market, Frank Haflich

LOS ANGELES — Next year could see industrial titanium demand rebound temporarily, but it nevertheless remains flat through 2016, according to an executive of a major tubing producer.

With the exception of a desalination-related upturn next year, the industrial market will likely remain flat and under its capacity to ship product until 2017, Gilles Dussart, chief operating officer of the Valtimet Inc. subsidiary of Boulogne-Billancourt, France-based Vallourec Group, said in a subdued five-year forecast that some industry executives called overly pessimistic.

"I believe that the coming years are not going to be a good time (in terms of) capacity adjustment," he told attendees of the International Titanium Association’s recent meeting in Atlanta.

Global demand for industrial titanium will fall to about 22,000 tonnes this year (about 55 million pounds) from more than 30,000 tonnes in 2011, Dussart said. That will be due in large part to a decline in the desalination sector.

While Dussart forecast that demand will recover in 2013 to a total of nearly 30,000 tonnes, driven mainly by an upturn in desalination, he sees the industrial market as a whole stuck at approximately 25,000 tonnes from 2014 to 2016 and not reaching 30,000 tonnes again until 2017.

Although he didn’t attribute his outlook to specific projects, his forecast nevertheless underlines the crucial role that large desalination facilities play in the industrial market as a whole, observers later pointed out.

The Ras Az Zawr project in Saudi Arabia was seen as a major component of global demand in 2011, benefiting, among others, Pittsburgh-based Allegheny Technologies Inc (ATI). ATI’s Uniti LLC joint venture in Moon Township, Pa., last year supplied 5.5 million to 6 million pounds of commercially pure titanium strip for fabrication into pipe for the plant.

But this year, there has been no desalination plant comparable in size taking delivery of titanium tubes. In 2013, however, another Saudi project, phase three of the Yanbu Power and Desalination Plant, will likely push up demand, according to observers.

Still, Dussart’s view is seen as too downbeat by some other industry sources, some of whom maintain that it’s highly unusual for the market to remain subdued for so long a stretch.

"History has shown that we’ve never seen the market flat for so many years in a row," one industry observer said of the forecast. "Sure, desal(inization) has been a bubble, but there are other markets."

Dussart also expects "no real nuclear (power) renaissance" in the near term in the wake of last year’s disaster in Fukushima, Japan.

The nuclear power market is expected to require 40,000 tonnes of titanium tubing over the next 20 years. He noted that a number of nations are "taking time to review the safety of their designs," although he stressed that nuclear power will continue to play a major role in global titanium demand going forward.

In the process sector, Dussart, whose company also produces stainless steel tubing, sees "great potential for titanium," noting that liquid natural gas plants can consume as much as 180 tonnes of tubing per project, while plants that produce purified terephthalic acid—considered one of the building blocks of developing economies—can require up to 150 tonnes.

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