LOS ANGELES The titanium
spot market is looking to next year for pricing improvement as
ingot prices show signs of slight softness as 2012 winds
Prices for 6 aluminum/4 vanadium standard aerospace ingot
have settled in a general range of $10 to $11 per pound, down
about $1 to $2 per pound from levels seen in the first half of
Some market sources noted that
its not unusual for spot ingot prices to dip in December,
when certain producers seek to boost their end-of-year cash
flow. "Ive seen no uptick in volume. People are
continuing to fight for market share," one industry source
"Ingot always seems to be more
available at the end of the year," one buyer said, pointing out
that low scrap prices and continuing inventory reduction at
Chicago-based Boeing Co. are helping to keep a lid on any
Delivery lead times are
estimated as short as six to eight weeks, and even about four
weeks when material is already on the floor.
Most titanium shipped in the
United States is now part of long-term supply deals with large
aerospace buyers, which are priced on various economic and
commodity indices that normally dont reflect the
near-term fluctuations more common in the spot market, some
market sources noted.
"We dont see the market as
soft. We see it as solid," a producer of downstream mill
"I think its significant
that ingot pricing hasnt deteriorated as much as during
past downturns, and hasnt declined nearly as much as
scrap prices," another market source said.
Nevertheless, at the start of
2012 several distributors had expected both demand and pricing
to rise significantly in the second half of the year, and some
expressed disappointment that they had spent too much of their
time in the final months of the year fretting about carrying
too much inventory.
However, with commercial
aircraft backlogs remaining strong and the titanium-heavy
Boeing 787 Dreamliner recently reaching a build rate of five
per monthwith a target of 10 per month by the end of
2013some market participants think it isnt
unrealistic to expect a pickup in the first half of 2013.
"A month ago, some suppliers
were willing to give fixed pricing to June (of 2013), and now
theyre only giving it to March. So maybe now they have
the idea that demand and prices are going up," a buyer of
melted products said.
"Were seeing a little more
reluctance at mill level for selling to us at firm, fixed
pricing," a distribution executive agreed.