LOS ANGELES Raw material prices arent expected to be a problem for titanium producers next year.
Dawne S. Hickton, vice chairwoman, president and chief executive officer of RTI International Metals Inc., said that the Pittsburgh-based producer completed its annual titanium sponge negotiations for 2013 at the International Titanium Association (ITA) annual conference last month.
"Based upon the outcome of these meetings, we expect our overall raw material costs for next year to be relatively flat to this years costs," Hickton told investors during a quarterly conference call.
RTIs blended cost of sponge rose 8.5 to 9.5 percent in 2012 as the Japanese producers who are its primary source of supply faced huge hikes in rutile feedstock costs in the second half of 2011 and the first half of this year.
RTI didnt break out the increase it paid on the portion of its total 2012 sponge the price of which was negotiated for this year compared with sponge already in inventory or that of already determined prices. However, industry sources have estimated that Japanese sponge producerswho are by far the largest source of outside sponge purchased by U.S. titanium meltersraised their prices by 25 to 30 percent in 2012.
Hickton declined to disclose whether RTI paid any increase on the portion of sponge for which 2013 prices were recently negotiated. She did point out that RTIs raw material mix includes not only sponge but also scrap, which has been coming down in price this year.
"Right now, its a little premature to for us to determine where all of our mix is going to come from" in 2013, Hickton said.
Others who met with Japanese sponge producers at the ITA conference suggested there will be "no increase or decrease" in sponge prices next year.
Theres speculation that some sponge prices for 2013 might not be finalized until after this coming week, when discussions in Hong Kong that also would involve sponge suppliers outside Japan could result in lower prices, especially for non-aerospace, industrial titanium producers.