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Titanium surcharges log another significant fall

Keywords: Tags  titanium surcharge, ATI Allvac, Allegheny Technologies, titanium, Frank Haflich

LOS ANGELES — A benchmark titanium raw material surcharge has taken a second significant fall this year.

The ATI Allvac unit of Pittsburgh-based Allegheny Technologies Inc. has reduced its second-quarter surcharge on standard 6-aluminum/4-vanadium bar and flat products to $5.04 per pound, down 10.6 percent from $5.64 in the first quarter and 32 percent below $7.41 in the second quarter of last year. Monroe, N.C.-based Allvac also cut its billet surcharge by 10.7 percent to $4.59 per pound from $5.14 in the first quarter.

Second-quarter surcharges on titanium 6/4 Eli (extra-low interstitial) bar, flats and billet are the same as on standard products.

The latest surcharge decline follows a 15.4-percent reduction in the first quarter (, Jan. 2), the largest drop in nearly two years.

While Allvac doesn’t disclose the specific elements of its surcharge or their portions, they are assumed to include scrap, sponge, master alloys and energy, with scrap one of the largest components. Some market sources, who assume the latest surcharge decline reflects a weak first-quarter scrap market, said scrap prices have stabilized lately at low levels, and others insist that there’s no concrete indication yet that scrap is poised to move up.

Meanwhile, lead times on such commodity products as 6/4 bar remain short. "Everyone is telling us that deliveries should start pushing out later in the second quarter, but I just haven’t seen it yet," one distributor source said.

Surcharges for other widely used alloys also were cut. Titanium 6-aluminum/2-tin/4-zirconium/2-molybdenum, popular for aircraft engines, is down 9.3 percent in the second quarter to $6.03 per pound for bars and flats and 9.4 percent to $5.49 per pound for billet; and titanium 3-aluminum/2.5-vanadium, widely used for tubing, fell by 9.2 percent to $5.16 per pound for bars and flats and to $4.70 per pound for billet.

The surcharge on commercially pure Grade 2 titanium, used primarily for nonaerospace industrial applications, was trimmed by just 2.1 percent to $4.67 per pound for bars and flats and to $4.25 per pound for billet.

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