LOS ANGELES The
continuing impact of forging press outages in 2012, as well as
an ongoing inventory selloff at aerospace giant Boeing Co., has
prompted analysts to temper their titanium outlook over the
next five years.
"We are incrementally less
bullish on the outlook for aircraft demand of titanium in
13 and through 17, despite a higher aircraft
delivery forecast," analysts Lloyd T. OCarroll and John
F. Ockerman of Davenport & Co. LLC said in a note to
The two analysts expect titanium
demand in commercial aircraft to grow to 109.6 million pounds
this year and reach 123.3 million pounds in 2014 and 157.5
million pounds in 2017.
While Richmond, Va.-based
Davenport has slightly raised its 2013 estimate for commercial
aircraft deliveries to 1,450up from their projection of
1,435 made earlier this yeartwo near-term issues "have
dampened our outlook" for titanium, the analysts said.
The first of these is the
lingering effect of 2012 press outages at the industrys
largest producer of titanium forgings, Precision Castparts
Corp. (PCC), along with unrelated destocking in the engine
supply chain. The second issue is Chicago-based Boeings
destocking of its airframe titanium inventory, which they
expect to continue into 2014.
In October, Portland, Ore.-based
PCC said maintenance issues at three key forging presses at its
Wyman-Gordon unit along with a fire at the main ring-rolling
press at its Carlton Forge Works created "significant
headwinds" for the parent company (
amm.com, Oct. 25).
OCarroll and Ockerman said
these outages caused a delay of "several months worth of
production" last year, and that extended backlogs at the end of
2012 will affect shipments this year. PCC said last year that
while it didnt lose business due to the press problems,
it was "accelerating our forging throughput to compensate for
Moreover, OCarroll and Ockerman said "ongoing delays"
in manufacturing for both Boeings 787 and Airbus
SAS A350 airlinerswhich they predict will account
for all of the increase in titanium usage from 2012 to
2017remain a "key risk."