LOS ANGELES U.S. titanium
shipments unexpectedly fell 13 percent last year, and industry
observers said a turnaround may not begin until the second half
of 2013 at the earliest.
Mill product shipments totaled
39,600 tonnes (87.3 million pounds), down from a record 45,500
tonnes (100.3 million pounds) in 2011, according to U.S.
Geological Survey (USGS) data.
"This was below my
expectations," one industry analyst said. Like many others, the
analyst had expected 2012 shipments to at least match, if not
exceed, the previous years figure.
Some observers said that a sharp
fall in nonaerospace industrial demand may have played a role
in last years falloff, although that market typically
accounts for a much smaller portion of U.S. demand than it does
in other parts of the world. Commercial and military aerospace,
which normally plays a dominant role in the U.S. market,
accounted for approximately 68 percent of domestic mill product
and castings shipments last year, according to the USGS.
Moreover, Chicago-based Boeing
Co., which is generally assumed to represent the largest single
consumer of U.S. titanium, "reset" its outside requirements
downward last year. Some distributors who expected a pickup as
the year progressed had laid in inventory and instead ended up
with far more material in stock at the end of 2012 than they
Some analysts dont expect
annual shipments to improve significantly until 2014, although
they conceded that the second half of this year likely will be
an improvement over the first six months.
Production data, which often
gives a clue about shipments in succeeding quarters,
wasnt particularly strong in the fourth quarter. Ingot
production slipped 3.9 percent from the third quarter to 17,100
tonnes (37.7 million pounds), while mill product output fell
17.3 percent to 8,850 tonnes (19.5 million pounds).
John Mothersole, senior
principal analyst of Lexington, Mass.-based IHS Global Insight
Inc.s pricing and purchasing service, acknowledged that
last years results were "a disappointment" and the first
quarter of 2013 had been "weak," but he said this year looks
likely to pick up somewhat in the second half. Shipments likely
will reach 89.3 million pounds in 2013 and rise above the
100-million-pound mark next year, according to IHS.
IHS predicts that 2013 titanium
ingot prices will decline 1 to 2 percent from 2012, with
stability following first-quarter softness. It expects mill
product prices to reach equilibrium this summer and experience
a "slight lift" by the end of the year following the 10-percent
drop they experienced in the first quarter. IHS expects
titanium ingot prices to rise 6 to 7 percent and mill product
prices to rise 8 to 10 percent in 2014.
Titanium scrap receipts totaled
48,800 tonnes (107.6 million pounds) last year, up 21 percent
from 2011, according to the USGS.